Overview
In 13 instances during the audit period, authorized UMass Amherst Procard holders made multiple Procard transactions with the same vendor on the same day. These transactions totaled $19,204, $6,204 of which was over the cardholders’ approved single-purchase limits (limits on amounts that cardholders are allowed to spend). Purchases that cumulatively exceed the single-purchase limit in this way are called dovetail purchases. In each of these 13 instances, the single-purchase limit was $1,000 and the cardholder did not receive prior approval to exceed this amount. Allowing employees to exceed the single-purchase limit defeats the purpose of the Procard, which is to make small purchases.
The 13 dovetail purchases in which cardholders exceeded the single-purchase limit were as follows:
- 3 instances, totaling $1,650 over the limit, in which the cardholder split a single invoice, or a single purchase consisting of multiple items, from the same vendor on the same date into multiple payments
- 5 instances, totaling $2,049 over the limit, in which the cardholder paid multiple invoices to the same vendor on the same date
- 5 instances, totaling $2,505 over the limit, in which the cardholder made multiple separate purchases from the same vendor on the same date
Authoritative Guidance
The university Procard User Guide states,
The Cardholder may make as many purchases as (s)he wishes from the same vendor in a single day, as long as the total of the combined purchases from that vendor does not exceed their single purchase limit.
The guide also states that a cardholder can request a “one-time exception to [the] single purchase limit” from the Procurement Department to have this limit increased. However, none of the cardholders who were involved in the 13 dovetail purchases above requested limit increases.
Reasons for Noncompliance
According to UMass Amherst Procurement Department officials, their understanding was that dovetail purchases only occur if a cardholder splits the cost of a single item that costs more than the single-purchase limit into multiple purchases. However, according to the Procard User Guide, the cardholder’s single-purchase limit applies not only to the same item but also to the same vendor. Therefore, making multiple purchases from the same vendor with a combined total that exceeds the single-purchase limit, without obtaining a onetime exception to the limit, is dovetailing.
Recommendation
UMass Amherst management should review and update the university’s definition of dovetail purchases, amend its Procard User Guide accordingly, and provide additional user training to ensure that cardholders understand the definition of dovetailing.
Auditee’s Response
UMA will update its definition of dovetail in the Procard User Guide. When a cardholder intentionally splits an order/charge with a single vendor in the same day resulting in a combined dollar amount of purchases from that vendor which exceeds the assigned daily spending limit, this is considered “dovetailing.”
This will eliminate confusion about our single purchase limit applying not only to the same item/charge but also to the same vendor. If orders are placed on different days and charged on the same day, we do not consider this dovetailing. The Procard audit team monitors purchases for dovetailing during periodic monthly audits. When a review of a cardholder’s purchases shows a pattern of intentionally splitting purchases from a single vendor the Procard audit team will increase the audit selections for that cardholder.
Auditor’s Reply
Based on its response, UMass Amherst is taking steps to address our concerns in this area by updating its Procard User Guide and redefining dovetailing as it relates to splitting an order/charge from a single vendor in a single day. However, we believe that cardholders who exceed the single-purchase limit should be given additional training to ensure that they understand the definition of dovetailing.
| Date published: | October 29, 2018 |
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