GOVERNANCE: Improving Controls Over the Use of Procurement Cards Could Better Ensure Compliance and Limit Potential Misuse
This report assesses the effectiveness of the company’s internal controls over the use of procurement cards.
Although the company’s policies and practices for controlling its use of procurement cards are generally effective, we found performance gaps and opportunities for improvement in key areas. For example, about 13.4 percent of the 87,000 transactions we reviewed were potentially noncompliant with company policy due to possible split purchases to circumvent single purchase spending limits, purchase of goods or services that may have been available at a lower price, and payment of as much as $81,000 in sales tax even though the company is exempt. Additionally, some cardholders may not have competitively bid purchases when required. Our work also identified weaknesses in oversight of the procurement card program, card holder training, and supervisor training.
We recommended that the company ensure that program administrators monitor transactions -- particularly those in high-risk categories -- for policy noncompliance and potential misuse and take steps to address any issues, require card holders and supervisors to take training on their responsibilities, and update the policy to reflect these new requirements.