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HomeMy WebLinkAboutAudit Reports - Public - Airport Operations Procurement Card Audit - 9/29/2017 City Auditor’s Office 1 Airport P-Card Audit Date: September 29, 2017 To: Kevin R. Phelps, City Manager From: Candace MacLeod, City Auditor Subject: Procurement Card Audit – Airport Operations As part of the FY18 audit plan, the City Auditor’s Office conducted a procurement card (P-Card) audit of Airport Operations in the Public Works Transportation Division in August 2017 for the period June 14, 2016 to June 13, 2017. The purpose of the audit was to assess compliance with Budget and Finance’s P-Card Policies and Procedures (Policy). The Airport is responsible for the operation and management of the Glendale Municipal Airport. Airport Operations has three cardholders that expended $42,000 on their P- Cards for the period under review. The auditor met with Airport staff and reviewed monthly cardholder statements. The following observations were noted. 1) Monthly statements printed and approved late or not provided to a supervisor In accordance with the Policy, Cardholder Monthly Statement Checklists (Statements) should be signed by the cardholder and their supervisor at the end of each month to ensure charges are reviewed and approved. Testing identified that all Statements for the first cardholder were both signed and approved anywhere from one to five months after the required due date. Seven Statements for the second cardholder were both signed and approved late. All Statements for the third cardholder were signed on August 21, 2017, and none of the Statements for this cardholder were forwarded to their supervisor for review and approval. Additionally, monthly P-Card account statements were not always printed within three working days after the end of the billing cycle as required by Policy. Untimely review and approval of charges reduces accountability and increases the risk that errors or inappropriate use of the P-Card goes undetected. 2) Equipment purchases not logged Purchases for televisions, radios, and other non-capital equipment totaling $5,487 were made without being logged to ensure the assets were recorded and tracked. In accordance with the Policy, the serial number and destination of the equipment must be noted on the paid invoice and payment confirmation. The name of the staff member using the equipment or its placement location must also be noted. The risk of theft or loss increases if City assets are not logged and tracked. City Auditor’s Office 2 Airport P-Card Audit 3) Hotel and registration charges without supporting detail attached Charges for hotel accommodations and an event registration totaling $457 were made without any written explanation or supporting documentation such as agendas or event brochures. Policy requires that written explanations and supporting documentation be provided for P-Card expenditures. 4) Food purchased without providing attendees’ names Food totaling $75 was purchased for meetings and events without providing the attendees’ names and some of the other required documentation. In accordance with Policy, food expenses are allowed if they are supported by adequate documentation that includes the date, location, attendees’ names, and business purpose. 5) Cardholders had not received training for several years but received training during the audit One cardholder reported that they had received P-Card training last year, however, they were unable to provide documentation to verify their attendance. The second cardholder was unaware of their last training session. The third cardholder, in a supervisory capacity, has been with the City for two years and has never attended P- Card training. All three cardholders attended training during the audit. City Policy states that cardholders, supervisors/reviewers, and liaisons are encouraged to attend training at least annually. 6) One P-Card with limited usage A review of activity identified one cardholder with limited usage of 12 transactions during the period under review. Budget and Finance recommends that a P-Card only be obtained if the card is used at least six to 12 times per year. 7) Other observations Our testing identified one transaction that was supported by a copy instead of an original receipt, three Statements for which the signature authorization box was not checked, and an additional year of P-Card receipts that should have been purged. Policy requires that original receipts be attached as backup and Statements be fully completed by a supervisor. Additionally, monthly P-Card files should be retained for three years after the fiscal year it was created. City Auditor’s Office 3 Airport P-Card Audit Recommendation: Transportation should enhance controls to ensure Airport Operations complies with the P-Card Policies and Procedures and train staff. Management’s Response: Concur. Controls and procedures have been placed to ensure strict compliance with P-Card Policies and Procedures and training. Controls will be reviewed on an annual basis or according to policy for additional updates. 1) Monthly statements printed and approved late or not provided to a supervisor Concur. The P-Card Liaison understands the importance of providing timely monthly statements and will follow more closely the policy. P-Card liaison has been directed to no longer fully prepare all Airport cardholders monthly statements & receipt documentation. The individual users have been instructed on September 1, 2017 on how to compile their own receipts, prepare documentation and return to Liaison to forward to authorize signer(s). Additionally, all charges are approved prior to purchase by Airport Administrator and expenditures are reviewed monthly for accuracy & business need. 2) Equipment purchases not logged Concur. The Airport staff was unaware of this process of small assets but now understands the policy. A spreadsheet has been created with the equipment listed and will track all current and future city assets that could or may present a risk of theft or loss. 3) Hotel and registration charges without supporting detail attached Concur. P-Card user did not have the final approved travel report. All required documentation has since been provided. 4) Food purchased without providing attendees’ names Concur. All meetings regardless of the dollar amount expended or type of food provided will need to include persons that attended, location of meeting/training and the business need. City Auditor’s Office 4 Airport P-Card Audit 5) Cardholders had not received training for several years but received training during the audit Concur. Liaison has attended training annually since May 2003 and documentation would have been captured in a sign-in sheet held by the Materials Management Department/Division. All users attended the mandatory P-Card user training that was held in August of 2017. 6) One P-Card with limited usage Concur. P-Card in question is held by the Airport Administrator and the use is under review. 7) Other observations Concur. The statements with the unchecked boxes have been corrected. The Liaison has since boxed and sent the P-Card receipts to records for destruction. cc: Michael Bailey, City Attorney Lisette Camacho, Assistant Director Budget and Finance Tom Duensing, Assistant City Manager Trevor Ebersol, Deputy Director Transportation Jack Friedline, Director Public Works Kenneth Potts, Airport Administrator Vicki Rios, Director Budget and Finance