Kent Gardens Elementary School Procurement Card Audit
5 Pages
English
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Kent Gardens Elementary School Procurement Card Audit

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Learn all about the services we offer
5 Pages
English

Description

Kent Gardens Elementary School Procurement (Credit) Card Audit July 2008 “promoting an efficient & effective school division” Executive Summary Our review of Kent Gardens Elementary School procurement (credit) cards revealed that internal controls appeared adequate. In general, expenditures appeared reasonable, properly approved, and supported by appropriate documentation. In addition, the procurement (credit) cards appeared to be in compliance with Regulation 5350.2 Finance Office Procurement (credit) Card Management for Appropriate Funds (effective 06-16-03). Areas where controls could be strengthened are: • Alternate procurement methods should be used or a limit increase requested when a purchase exceeds card limitations • Supplemental student materials should be properly approved • Procurement (credit) card transactions should be documented on a procurement card log with all required information • Purchase orders should be sequentially numbered Background The purpose of the Fairfax County Public Schools’ (FCPS) procurement (credit) card program is to provide an efficient, reliable method of procurement to acquire needed goods and services in a timely and efficient manner. While the use of a procurement card can simplify and expedite procurement, its use requires strict adherence to internal control procedures and a commitment to accompanying accounting procedures. In most cases, card use reduces staff procurement efforts ...

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Kent Gardens Elementary School
Procurement (Credit) Card Audit
July 2008
“promoting an efficient & effective school division”
Kent Gardens Elementary School
Procurement (Credit) Card Audit
1
Executive Summary
Our review of Kent Gardens Elementary School procurement (credit) cards revealed that
internal controls appeared adequate.
In general, expenditures appeared reasonable,
properly approved, and supported by appropriate documentation.
In addition, the
procurement (credit) cards appeared to be in compliance with Regulation 5350.2 Finance
Office Procurement (credit) Card Management for Appropriate Funds (effective 06-16-03).
Areas where controls could be strengthened are:
Alternate procurement methods should be used or a limit increase requested when a
purchase exceeds card limitations
Supplemental student materials should be properly approved
Procurement (credit) card transactions should be documented on a procurement card
log with all required information
Purchase orders should be sequentially numbered
Background
The purpose of the Fairfax County Public Schools’ (FCPS) procurement (credit) card
program is to provide an efficient, reliable method of procurement to acquire needed goods
and services in a timely and efficient manner.
While the use of a procurement card can
simplify and expedite procurement, its use requires strict adherence to internal control
procedures and a commitment to accompanying accounting procedures.
In most cases,
card use reduces staff procurement efforts and shortens delivery time; however, it
increases the need for financial tracking and control efforts.
The Office of Finance, Accounts Payable Section, is responsible for administering the
procurement card program.
These responsibilities include approval of card application,
assisting departments with dispute resolution, monitoring monthly reconciliations, and
reviewing and remitting payment for the consolidated bill.
Procedures governing the use of
procurement cards are provided by the card service vendor in conjunction with FCPS
Regulation 5350.2.
Scope and Objectives
This audit was performed as part of the fiscal year 2008 Annual Audit Plan. The audit
covered the period from April 1, 2007 through March 31, 2008 and was conducted in
accordance with generally accepted governmental auditing standards. Our audit objectives
were to determine that:
Procurement cards were being used in accordance with regulation 5350.2
Adequate control procedures have been implemented and are being followed
Kent Gardens Elementary School
Procurement (Credit) Card Audit
2
Monthly reconciliations are being performed and submitted in accordance with
regulations
For the period under review, Kent Gardens Elementary School managed 7 credit cards that
were used for 113 appropriated fund expenditures.
A total of 90 transactions were
reviewed during the period.
The sample included 87 randomly selected and 3 judgmentally
selected transactions which represented 83% of the total card expenditures.
Methodology
Audit methodology included a review and analysis of internal control procedures over card
expenditures and related documentation.
Our audit approach included an examination of
expenditures, records maintained in the department, monthly reconciliations, interviews
with appropriate employees, and a review of applicable regulations and procedures.
We
evaluated the processes for compliance with FCPS Regulation 5350.2
.
Information was
extracted from PathwayNet for sampling and verification to source documentation during
the audit; however, our audit did not include an independent review of system controls.
Our transaction testing did not rely on system controls; therefore, this was not a scope
limitation.
The FCPS Office of Internal Audit is free from organizational impairments to independence
in our reporting as defined by generally accepted government auditing standards.
We are
organizationally part of the Office of the Superintendent and report directly to the Audit
Committee.
Organizationally, we are outside the staff or line management function of the
units that we audit.
We report the results of our audits to the management of the
department under review, the appropriate leadership team member, the Superintendent,
and the Audit Committee, and reports are available to the public.
Findings, Recommendations, and Management Response
1.
Supplemental materials not properly approved
Kent Gardens Elementary School is a French immersion school and thus needed
supplemental classroom materials in French.
While the core texts had been approved,
the supplemental materials had not.
The Sprint materials (instructional and activity
pages used for reinforcement and enrichment) and the Mon Glossaire Mathematique
materials (a resource book equivalent to a math dictionary) had not been previously
approved for classroom use.
In accordance with regulation 3005.5, Instruction
Materials and Equipment–Program and Supplemental Instructional Print Materials
Identification, Evaluation, and Approval of these materials should have been reviewed
by a committee and subsequently approved by the principal prior to purchase.
Recommendation:
Kent Gardens Elementary should utilize appropriate procurement
methods in accordance with FCPS regulations to include the proper approval of
supplemental student materials.
Kent Gardens Elementary School
Procurement (Credit) Card Audit
3
Management Response:
Kent Gardens took immediate action on supplemental
materials as we were in the ordering process for next year.
Committees were
formed and materials evaluated and sent to the Assistant Superintendent for
Instructional Services and the Foreign Language Department.
We received
notification back that the books had been approved.
Note:
The Office of Internal Audit has verified the subsequent approval of
supplemental materials.
Further follow up is not required for this item.
2. Transactions were split to avoid preset card limits
Two transactions were split into equal payments to fall below the preset single
transaction limits for the procurement cards being used.
On May 29, 2007, a purchase
totaling $1,104.50 was split into two equal payments of $552.25 and a second purchase
totaling $1,440.10 was split into two payments of $720.05 on August 24, 2007.
Procurement cards shall be used in accordance with established regulation.
Single
purchase limits are established when a FCPS procurement card account is created
using the form located in Regulation 5350.2, Appendix A.
Recommendation:
Kent Gardens Elementary School
should use proper purchasing
methods in accordance with FCPS regulations.
When card limits are insufficient to
allow for proper procurement of goods /services, a limit increase should be considered.
Management Response:
Our procurement card limit was not sufficient; purchases
were split into classes for ordering purposes.
To comply with appropriate
procurement methods an increase in our foreign language procurement card limits
were requested and granted.
Note:
The Office of Internal Audit has verified that card limits have been modified
and the appropriate process was followed.
No further follow-up is needed for this
issue
3. Procurement card log not consistently maintained
A procurement card log was not being consistently maintained.
Of the 90 transactions
reviewed, 24 were not properly logged.
In addition, for those transactions that were
listed on the log, dates and/or card user information was not consistently provided.
Recommendation:
Kent Gardens Elementary School should record all transactions;
both debit and credit, on the credit card log, as they occur, to accurately reflect card
transactions.
In accordance with Regulation 5350.2, the log should indicate the date
card was issued, vendor, item(s) purchased, amount, card user, signature of user, date
card returned and the date posted.
Kent Gardens Elementary School
Procurement (Credit) Card Audit
4
Management Response:
An additional column has been added to the procurement
card log for items purchased and the posted column will be utilized on the log as well
as continuing our process of posting the FMR transaction date on the purchase
order.
The new log will be implemented beginning with all fiscal year 2009
transactions.
4. Purchase orders not properly numbered
While purchase orders were being utilized for all transactions, they were not properly
numbered.
In addition, multiple vendors were listed an individual purchase order.
In
accordance with Guidelines for Purchase Orders issued by Financial Services purchase
orders are to be sequentially numbered.
Recommendation:
Kent Gardens Elementary School should sequentially number
all purchase orders, regardless of the type, and an individual purchase order should
be prepared for each vendor.
Management Response:
The purchase order log has been updated to include a
column for credit card charges. All future procurement card purchases will have
purchase numbers assigned.
This process will be implemented beginning with all
fiscal year 2009 transactions.