Office of the Legislative Auditor - Financial Audit Division

Report Summary
Purchasing Card Program
Compliance Audit

 

Financial Audit Division Report 13-22

Released September 20, 2013

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Conclusion

State employees generally complied with the state’s policies, procedures, and other finance-related legal requirements when they used state purchasing cards. However, the state’s purchasing card policy had some deficiencies, and some transactions we tested did not comply with certain state policies or other legal requirements.

Findings

• The state’s purchasing card policy did not address employees’ receipt of benefits through vendor loyalty programs, adequately define some types of prohibited purchases, and did not include a requirement to periodically review and recertify the appropriateness of purchasing card authorizations.
• Some employees used purchasing cards to buy items that were prohibited by policy, exceeded authorized transaction limits, or failed to accurately pay state sales and use taxes.
• Several state agencies did not have adequate documentation to support some purchasing card transactions.
• Several agencies did not comply with some purchasing card program requirements; they lacked adequate documentation to support some employees’ purchasing card authorizations and transaction limits and did not notify the Office of the Legislative Auditor about suspected misuse.

Audit Scope and Objectives

For the period from January 2011 through December 2012, we obtained from US Bank the detailed transactions of purchases made by employees through the state’s purchasing card program. We analyzed the data to identify agencies and transactions at higher risk of noncompliance because of the relatively large number of employees with purchasing cards, the large dollar amount of purchases, or because the purchases seemed to be for unusual items or from unusual vendors. Based on our analysis, we selected and tested a sample of 543 transactions within eight agencies to determine whether those transactions complied with the state’s purchasing card policy and other finance-related legal requirements.