Recently, the college was audited by VCCS Internal Audit on our purchasing card procedures and compliance with Commonwealth of Virginia policy. Purchasing Cards have become an important tool both in terms of purchasing and payment for goods and services. There are currently 58 purchasing cards in use with a combined total of $339,546 for single transaction authorization and $1,549,900 for monthly purchases. In excess of $2 million is purchased and paid for with the cards, annually.
I want to share with the college community the results of the audit and ask for your help in complying with policy as it relates to the use of the cards.
These were the findings:
1. Two purchase cards had limits that exceeded the $5,000 limit. Card limits may be increased above $5,000 per transactions, but require approval from the Department of Accounts.
2. The annual assessment of cardholder activity and spending limits is not adequate. Supervisors must review the cardholder’s activity over the 12 month period and documentation must exist to support the annual review. The Financial Services Office will be developing policies to guide the annual assessment and will be issuing guidance on this in the very near future.
3. Cardholder’s paid state sales tax on purchases. There were a total of 78 transactions where state sales tax was paid, resulting in $1,510. Many of these purchases were in the Follett Bookstore. Employees are asked to please let the bookstore cashier know that the purchase is on behalf of the college, so that state sales tax will not be charged. The bookstore has also been made aware of this issue. Outside vendors should be provided with a Sales and Use Tax Exemption Form. These are available from Financial Services.
4. Cardholder’s reconciliations were late. For two separate months in 2012, at least four (4) cardholder’s purchasing card reconciliations were late. They were submitted 10 to 20 days after the following month’s statement was issued. Commonwealth of Virginia policy requires that cardholder statement reconciliation must occur prior to receipt of the following month’s statement. In order to insure that we meet or exceed this requirement, cardholder reconciliations must be completed by the last day of the month in which the statement is received.
5. Cards are not properly secured. The security review of 18 purchasing cards revealed that one cardholder retained in a folder on top of her desk; one in a lockable desk (but the keys were in a container on top of the desk) and three (3) employees kept their cards in a lockable desk (but other individuals had keys to the desk). The purchasing card should be kept in an accessible but secure location, such as a locked desk or cabinet. Access to the desk or cabinet should be limited to the cardholder and as a minimum their immediate supervisor. Further, the account number on the purchasing card should not be posted or left in a conspicuous place. Policy still requires that the card number may not be faxed.
6. Purchasing cards were not canceled in a timely manner following retirement, resignation, and/or termination. All employees and Supervisors are reminded that purchasing cards must be turned over to Finance Services in a timely manner. Commonwealth of Virginia policy requires that the card be cancelled within 24 hours of the cardholder’s separation date from the college.
The best way to correct issues when they are encountered is to shed light on them. It is not my intention to single anyone out, but to strengthen our adherence to policy. These are issues that unaddressed could have significant consequences for the college. Thank you in advance for your help and cooperation in addressing these issues college-wide.
If you have any questions, please contact me or Fred Aaron.
Cheryl Miller, Vice President of Finance