Common Audit Issues
Purchasing Card Audits
Purchasing Card audits are performed randomly, with higher volume cardholders more likely to be selected due to both transaction and dollar volume. As part of the audit, we review the source documents (original receipts) for selected transactions, the related logs, and reports from the on-line Paymentnet system. Our primary objective is to render an assessment of compliance with University guidelines as well as those dictated in the Purchasing Card Policies and Procedures. We also review the control system in place for card use, approvals, and adequacy of the source documentation for the selected transactions.
To help you assess your own controls and compliance, the following are recurring issues that have resulted in audit recommendations to improve accountability and compliance.
- On-line transactions are not approved.
- The original receipts are not reviewed when transactions are approved. This can result in approval of questionable or unallowable purchases.
- Approving transactions that do not have the business purpose readily evident.
- The approver is also a cardholder and approving his/her own transactions. Thus, even one purchase on the card would place the approver in a conflict of interest since he/she would be passing judgment on his/her own card activity.
- The approver does not question the propriety of transactions.
- On-line transactions are not reviewed. This is a key control that will immediately alert the cardholder to any unauthorized card transactions.
- The original receipts are not retained. If this is a recurring problem and undocumented purchases cannot be clearly explained, card privileges may be revoked. The cardholder can be held financially liable for purchases without properly documented receipts.
- The business purpose is not documented when the receipt or the order confirmation does not provide an adequate explanation. (Also, not performing screen prints of items ordered on-line or printing the confirmation notice.)
- The detailed receipt showing each item purchased is not retained.
- Using the card to pay for food at business meetings. The purchasing card can not be used for meals at restaurants. In order to purchase food for a business meeting, the meeting must be held in the department, there must be a complete agenda, list of the participants, and an explanation of why food was being provided.