Audit Guide: Auditing and Investigating the Internal Control of Government Purchase Card ProgramsThe fed. gov't. expended $15 billion through Fed. purchase card programs (PCP) in FY 2002. Fed. agencies are responsible for establishing and maintaining internal control to provide reasonable assurance that: the goals and objectives of the PCP are met; and safeguards against fraudulent, improper, and abusive purchases are adequate. This guide focuses on audits of internal control activities -- designed to prevent or detect fraudulent, improper, and abusive purchases -- in gov't. PCPs. Provides practical guidance for consideration by internal and external auditors, investigators, and program management oversight personnel in assessing the adequacy and performance of those control activities and identifying areas of internal control for potential improvement. |
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abusive purchases activities Pursue fraud agency program coordinator AO's Approach Gain understandings appropriate Approving official review assessment Test control Audit Approach Gain Audit Steps audit work papers auditor should consider authority bank service provider billing statement cardholder reconciliation cardholder's Citibank control activities Pursue control environment Control Performance Audit control tests credit limits data mining detected determine electronic evaluating Example Internal Control federal financial exposure fraud and abuse fraud investigators GAO's Audit Approach government purchase card identifying improper independent receipt internal control policies interviews lack of adherence laws and regulations legitimate government need MasterCard nonadherence Obtain and review organization organization's purchase card payment performance of control policies and procedures professional judgment Program Example Internal purchase card program purchase card transactions receipt and acceptance risk selected purchase card Selecting transactions span of control statistical sample stratum Test control activities tests of controls transaction-level control activities transactions database transactions selected
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Page 57 - Citibank allows the Navy up to 60 days after the statement date to dispute invalid transactions and request a credit. Upon receipt of the certified monthly purchase card summary statement, a DFAS vendor payment clerk is to (1) review the statement and supporting documents to confirm that the prompt-payment certification form has been properly completed and (2) subject it to automated and manual validations. DFAS effectively serves as a payment processing service and relies on the approving-official...
Page 56 - In the event an unauthorized purchase is detected, the approving official is to notify the agency program coordinator and other appropriate personnel within the command in accordance with the command procedures. After reviewing the monthly statement, the approving official is to certify the monthly invoice and send it to the Defense Finance and Accounting Service (DFAS) for payment.
Page 56 - ... appropriate and that the charges are accurate. The approving official is supposed to resolve all questionable purchases with the cardholder before certifying the bill for payment. In the event an unauthorized purchase is detected, the approving official is supposed to notify the agency program coordinator and other appropriate personnel within the command in accordance with the command procedures. After reviewing the monthly...
Page 57 - DFAS vendor payment clerk is to (1) review the statement and supporting documents to confirm that the prompt-payment certification form has been properly completed and (2) subject it to automated and manual validations. DFAS effectively serves as a payment processing service and relies on the approving-official certification of the monthly bill as support to make the payment. The DFAS vendor payment system then batches all of the certified purchase card payments for that day and generates a tape...
Page 56 - Instruction, before the credit card bill is paid the approving official is responsible for (1) ensuring that all purchases made by the cardholders within his or her cognizance are appropriate and that the charges are accurate and (2) the timely certification of the monthly summary statement for payment by the Defense Finance and Accounting Service (DFAS).
Page 56 - Service (DFAS). The Instruction further states that within 5 days of receipt, the approving official must review and certify for payment the monthly billing statement, which is a summary invoice of all transactions of the cardholders under the approving official's purview. The approving official is...
Page 53 - Purchase Cards: Control Weaknesses Leave Two Navy Units Vulnerable to Fraud and Abuse...
Page 56 - Code, requires DOD to issue regulations that ensure that purchase cardholders and each official with authority to authorize expenditures charged to the purchase card reconcile charges with receipts and other supporting documentation before paying the monthly purchase card statement. NAVSUP Instruction 4200.94 states that upon receipt of the individual cardholder statement, the cardholder has 5 days to reconcile the transactions appearing on the statement by verifying their accuracy...
Page 18 - ... objectives. Internal control is the first line of defense in safeguarding assets and preventing and detecting fraud and errors. Internal control, which is synonymous with management control, helps government program managers achieve desired results through effective stewardship of public resources. Control activities are the policies, procedures, techniques, and mechanisms that enforce management's directives and help ensure that actions are taken to address risks. Control activities are an integral...
Page 53 - Education Financial Management Weak Internal Controls Led to Instances of Fraud and Other Improper Payments.