COMMON AUDIT ISSUES
Purchase Card Audits (3/01 Update)
We are nearing completion of our division based audits of the implementation of the purchase card system. By spring we will have done limited testing everywhere the cards have been implemented. The next phase of our audits will shift to random and targeted testing that involves both site visits and desk audits.
Our primary objective in these audits continues to be the assessment of compliance with guidelines in the cardholder agreements. To help you assess your own operation we want to point out three recurring issues that have resulted in our recommending departmental changes to improve accountability.
Independent reconciliation of purchases to the PVS statements or SFS
Several site managers included in our audits were also "delegated users" of the cards for which they had responsibility to review the appropriateness of transactions and reconciliation to the ledgers. Even one purchase from a card puts the site manager in a conflict of interest since they would be passing judgement on their own card activity. Site managers should find someone else in the department to serve as a delegated card user.
Designated user agreement
We continue to find cardholders who do not require completion of this form for occasional users. This serves as an authorization for the user to purchase at a store, and a record that they have read and understand the rules of card use. Without this form on file, the cardholder could be held responsible for a purchase by someone whom they had provided the card or card number. In today's electronic marketplace, once you give someone your card number they can continue to use it until the card is cancelled. If you don't have a copy of the form on file it would be very difficult to take action against an employee who violated card use rules. A cardholder should always obtain a signed "Designated User Agreement" from anyone who is authorized to make purchases with their card, regardless of how often they use it.
Transferring charges to other funds
As departmental employees find how useful the card is for purchasing, cardholders are being asked to make purchases for others. Unfortunately, they are not maintaining proper documentation of the request. This is especially important when charges are transferred to extramural support. Federal rules require that only a PI or their delegate may authorize the expenditure of their funds. From a business point of view getting authorization is a good practice that should apply to any transfer of funds. A cardholder should always obtain something in writing from anyone for whom they are making a purchase. This can be a preprinted request form, an E-mail, or a simple written note. What's important is that it contain the funding to be charged, description of what is wanted, date and identification of the individual authorizing the purchase.
Business Services News - March 2001