MCLA did not properly administer its procurement card program.

MCLA did not ensure that procurement card accounts were reconciled, supported, or approved in accordance with its policies and procedures. In addition, cardholders did not submit procurement card logs to their supervisors as required by policy.

Table of Contents

A. Procurement card logs were not filed.

MCLA cardholders did not submit procurement card logs. Specifically, for 13 of 47 procurement card accounts reviewed, logs were not submitted to supervisors. Without procurement card logs, transactions cannot be properly reconciled.

Authoritative Guidance

MCLA’s “Procurement Card Policies and Procedures” state,

The original sales documents, (packing slip, invoice, cash register tape and credit card slips, etc.) for all items listed on the statement must be filed with a copy of the Procurement Card Log and monthly statement. This data is critical to enable proper account reconciliation and audit review. The careful matching of complete support documents to the log and then to the statement is vital to the success of this program.

Reason for Issue

The MCLA procurement card program administrator accepts credit card transaction summaries instead of the procurement card log.

B. Procurement card accounts were not reconciled.

Of the 47 procurement card accounts tested, 6 were not reconciled to the procurement card log or card activity statement. Without proper account reconciliation, MCLA cannot ensure that all purchases have been received and that no additional charges have been made against accounts.

Authoritative Guidance

MCLA’s “Procurement Card Policies and Procedures” state,

Transactions may be viewed daily using the online SmartData system. The Cardholder shall check each transaction listed against the department’s Procurement Card Log, receipts and any shipping documents to verify the transactions listed on SmartData.

Reason for Issue

Cardholders and supervisors did not ensure that all required supporting documentation was submitted so accounts could be properly reconciled.

C. Procurement card accounts were not supported

Cardholders did not maintain required supporting documentation to support transactions for 6 of the 47 procurement card accounts we reviewed. Accounts cannot be properly reconciled without proper supporting documentation.

Authoritative Guidance

MCLA’s “Procurement Card Policies and Procedures” state,

With the authority to make purchases using the [procurement card] comes the responsibility to maintain adequate documentation on the source of the transaction.

The following are examples of supporting documentation:

  • Itemized packing slips
  • Itemized sales receipts
  • Itemized copies of vendor order forms or applications
  • Itemized cash register receipts

All records must be retained by the department and kept available for audit purposes for the current and six previous fiscal years.

Reason for Issue

Cardholders and supervisors did not ensure that all required documentation was accounted for and maintained.

D. Procurement card statements were not approved.

Eight of 47 procurement card statements were not approved by supervisors. Without supervisory approval of monthly statements, the college does not have assurance that charges comply with MCLA policies.

Authoritative Guidance

MCLA’s “Procurement Card Policies and Procedures” state,

Administrative review of cardholder accounts follows the College reporting structure. For example, the cardholder’s manager or department head reviews all transactions on a monthly basis, and signs the cardholder’s monthly log indicating acceptance of all charges.

Reason for Issue

Cardholders and supervisors did not ensure that procurement card statements were properly approved.

Recommendations

  1. MCLA should ensure that all cardholders submit procurement card logs monthly.
  2. MCLA should ensure that all procurement card accounts are reconciled monthly by cardholders and supervisors.
  3. MCLA should ensure that all documentation is accounted for and maintained by cardholders so accounts can be properly reconciled.
  4. MCLA should ensure that all procurement card statements are properly approved by supervisors.

Auditee’s Response

[MCLA] agrees with the finding. The College has updated the Internal Controls document to reflect the replacement of the Procurement Card Log with the J.P. Morgan system generated Expense Report. This will assist the College in making sure that all required documentation is submitted, accounted for, reconciled, and properly approved by supervisors.

Auditor’s Reply

Based on its response, MCLA is working to address the issues identified.

Date published: August 11, 2021
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