Audit of Controls over Purchase Card Use in OII.

Published by the Department of Education, Office of Inspector General on 2005-05-17.

Below is a raw (and likely hideous) rendition of the original report. (PDF)


                                   OFFICE OF INSPECTOR GENERAL

                                         May 17, 2005


TO              : 	 Nina S. Rees
                    Assistant Deputy Secretary
                    Office of Innovation and Improvement (OII)

FROM            :	 Michele Weaver-Dugan, Director /s/
                   Operations Internal Audit Team
                   Office of Inspector General

SUBJECT         :	 Closure of our Audit of Controls Over Purchase Cards in OII
                   Control Number ED-OIG/A19F0012

This memorandum advises you of the results of our audit of Controls over Purchase
Card Use in OII. The objectives of our audit were to assess the current effectiveness of
internal control over the purchase card program and the appropriateness of current
purchase card use in OII. This audit is part of a review of the purchase card program
being performed Departmentwide.

To accomplish our objectives, we performed a review of internal control applicable to
OII’s administration and management of its purchase cards. We reviewed policies and
procedures applicable to the purchase card program, including internal guidelines
developed by OII. We conducted interviews with staff in the Office of the Chief
Financial Officer (OCFO) and OII to obtain an understanding of the purchase card
program. We evaluated training records for staff participating in the purchase card
program. The scope of our review included purchases made during the period July 1,
2003, through June 30, 2004, by Department cardholders located in Washington, DC. As
part of the Department-wide transactions selected, we reviewed three purchases made by
two OII cardholders, at a total cost of $3,131. This represents 3.0 percent of the total
number and 7.8 percent of the total amount of transactions made by OII cardholders
during the period. To test controls and evaluate the appropriateness of purchase card use,
we reviewed supporting documentation provided by OII staff for the purchases selected.

                       400 MARYLAND AVE., S.W. WASHINGTON, D.C. 20202-1510

        Our mission is to ensure equal access to education and to promote educational excellence
We found that OII was in compliance with Department requirements for documentation
to support purchase card transactions. However, we also noted the following minor

    •	 One transaction did not include the Activity Log Report and the Statement
       Transactions Report required by OII Purchase Card Guidelines.

    •	 The Executive Officer had not completed purchase card training as required by
       Department Directive OCFO 3-104, “Government-wide Commercial Purchase
       Card Program.”

    •	 On February 23, 2005, OCFO sent to all cardholders and approving officials a
       detailed list of all unreconciled transactions for the period July 2001 through
       January 2005. This list included 22 OII transactions, the oldest of which was
       from July 2001.

We suggest that OII ensure documentation is maintained to support purchases in
accordance with its internal guidelines, and that staff complete purchase card training as
required by Department policy. In addition, we suggest that OII wo rk with OCFO to
resolve the unreconciled transactions.

Our limited review would not necessarily disclose all material weaknesses in the
administration of the purchase card program in OII. Accordingly, this memorandum
should not be construed as acceptance or approval of OII’s practices and procedures
related to controls over purchase cards. Since the extent of our review in OII was limited
to the OII transactions included in the Department-wide audit, our results cannot be
projected to the universe of OII purchases. We may conduct further reviews of this area
in OII at some future date. Our audit was performed in accordance with generally
accepted government auditing standards appropriate to the scope of the review described

We wish to express appreciation for the cooperation and assistance extended by your
staff during the review. Should you have any questions regarding this review, please
contact Nancy Brown, Assistant Director, at (202) 245-6934 or me at (202) 245-6941.
No response to this memorandum is required.

cc: 	   Margo Anderson, Executive Officer, OII
        Liza Araujo-Rouse, Audit Liaison Officer, OII
        Cynthia Bond-Butler, Audit Liaison Officer, OCFO