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The audit of Purchasing Card Controls was included on the City Council-approved fiscal year 2021/22 Audit Plan. The audit objective was to review access and supervisory controls over and use of the City’s purchasing cards, including the transition to the new system. We reviewed purchasing card transactions between June 2020 and March 2022, which included the transition period.
The audit found that purchasing card (P-card) documentation requirements need to be enforced and monitoring practices can be strengthened.
A significant number of cardholders had not submitted supporting documentation for purchases during the past 2 years. From transactions in the new P-card system through March 2022, we identified 309 monthly statement logs that were not in the Document Management system as of the end of May. Given the high fraud risk associated with missing expense documentation, these monthly logs were requested from each cardholder and supervisor.
- Of 309 logs, 56 were still not submitted.
- Of the 253 reviewed, 20% had not been signed by the supervisor to affirm that they had reviewed the expense report and supporting receipts and invoices.
- Another 52% were signed in June/July, when they were submitted for this audit.
- Overall, about 23% of these transactions did not have invoices or receipts.
Even though some cardholders had multiple logs that were late or missing, with four cardholders missing 12 or 13 logs each, non-compliance procedures had not been escalated to suspend or cancel their P-cards. Improvements to the program administrator’s monthly tracking procedures were also recommended, including automating certain processes, such as verifying monthly charges.
Additionally, closeout procedures need to be clarified, such as notifying the program administrator when a cardholder transfers to another city department and collecting all P-card documentation when a cardholder leaves or transfers.
Management plans to implement changes by December 31, 2022
