quarterly purchasing card administrators’ meeting thursday, …€¦ · 29/08/2013 ·...
TRANSCRIPT
Quarterly Purchasing Card Administrators’ Meeting Thursday, August 29, 2013 – 9:00-noon Winewood Office Center, Building 4
AGENDA Introductions Special Presentations
Strengthening PCard Controls and Using Forensic Analytics to Detect Fraud, Errors, Waste and Abuse – Lisa Wilkerson, DOT
Ongoing Items
MRE Training
ITN Update
Internal Travel Agent/Co-traveler Issue
Convenience Fees
Charge Reviews – Erica Catledge
New Items
Use of PeopleFirst ID
PCard Approvers Class
Rep Letters
Reports
Special Announcement
Questions/Other Discussion
Conference Call Information
Join by Phone (850) 413-1558
Conference ID: 1309238
If you have problems with the conference line during the meeting, please call (850) 528-5995.
Remaining Meetings for 2013
November 19th
Quarterly Purchasing Card Administrators’ Meeting Minutes Thursday, August 29, 2013 – 9:00-11:00 Winewood Office Center, Building 4 Facilitator: Michelle Oliver
Introductions Special Presentations
Strengthening PCard Controls and Using Forensic Analytics to Detect Fraud, Errors, Waste and Abuse – Lisa Wilkerson, DOT
(presentation posted to the PCard meetings website)
Ongoing Items
MRE Training – Two dates were offered for MRE classes for PCard Administrators - September 19th or October 3rd. The administrators chose October 3rd. The Statewide Administrator’s Office will send out an email about registering for the class.
ITN Update –DFS and DMS are continuing to work on the solicitation for a new PCard Program contract. The Statewide Administrator’s Office will inform the Agency Administrators once the ITN is released.
Internal Travel Agent /Co-traveler issues –This issue was introduced at the May 2013 meeting. The Statewide Administrator’s Office is drafting a new policy and will provide it to the Agency Administrators once it is complete and approved by management.
Convenience Fees – The Statewide Administrator’s Office is continuing to work with DFS Legal staff to craft guidance for the Agency Administrators to use when vendors charge convenience fees. According to the Agency Administrators in attendance, the main issue is with utility companies charging convenience fees.
Charge Reviews – This is a new item that was introduced and will become an “ongoing item.” Erica Catledge, with the Statewide Administrator’s Office, presented common “findings” that were discovered through the charge reviews performed during the previous quarter. During the conversation after Erica’s presentation, the idea to provide a quarterly summary to the Agency Administrators and their supervisors was proposed. The summary would include the number of charge reviews completed during the quarter, and the number of reviews that were determined to be unallowable, unsupported,
and/or non-compliant. (Erica’s presentation is posted on the PCard meetings website.)
New Items
Use of PeopleFirst ID – The Bureau of Vendor Relations at DFS is investigating the possibility of using employees’ PeopleFirst IDs in lieu of the SSNs in FLAIR. This includes the use of the SSN on the PE Record and the sub-vendor field in the charge screen in the Purchasing Card Module. The agencies will be notified if/when any policy changes are made.
PCard Approvers Class – Several attendees at the last few PCard Approver classes have not been approvers, some did not even have any knowledge of the PCard program. Although well-trained employees are encouraged, DFS would appreciate if the Agency Administrators would inform approvers to register for the classes. The Statewide Administrator’s Office also suggests that new Agency Administrators, who may not be familiar with the approving process, take the class. The next class is scheduled for October 24th.
Rep Letters – DFS sends out representation letters around this time of year to the agency heads. The letter is to ensure that proper internal controls are in place within the agency’s PCard program.
Reports
o 10-day reports – Currently, Lee Rayner (in the Statewide Administrator’s Office) is the contact person for the Reportcaster 10-day reports sent to Agency Administrators. The 10-day report process will be reassigned to Tyesin Payne and Evangaline Benton.
o New reports – Information Warehouse staff has been working on new PCard reports. The Statewide Administrator’s Office will be testing the reports soon and will inform the Agency Administrators once the reports are posted to the PCard website. Michelle asked the Agency Administrators to let her know of any report that may be needed. The Statewide Administrator’s Office may be able to create the report in MRE or request Information Warehouse to build web reports.
Special Announcement – Lisa Wilkerson was recognized, as she will no longer be DOT’s PCard Administrator.
Remaining Meetings for 2013
November 19th
Purchasing Card Administration
What We Look For in a Charge Review
We verify the charge has appropriate authority, approval, justification and documentation, per the Reference Guide.
From our review, we determine if charges are allowable and compliant. We also look to determine if the cardholder has committed fraud or misuse of state funds.
What We Look For in a Charge Review
Misuse/Abuse Personal charges being placed on purchasing card
(Publix, Amazon, etc)
Keeping rental vehicle while not in travel status
Purchases not meeting ADA requirements
Fraud Cardholder set up a Paypal account in her name and was
paying herself. This looked suspicious when the cardholder name and the vendor name was essentially the same.
Level 3 Line Item Detail
Charges marked as
Non-Compliant/Not Allowed Non-Compliant – Purchases that are allowable state
expenditures, but the agency does not have proper approval to pay for them. Use of Internal Travel Agents or Vehicle
Repairs/Maintenance when it is not approved in your agency’s PCard Plan
Charge reviews will be marked as non-compliant when we receive no response from the agency
Not Allowed – Purchases that are not an allowable use of state funds, according to Florida statutes and/or the Reference Guide. Food (unless the agency has statutory authority to
purchase food)
Prohibited expenditures
Payment of items used for personal convenience
Corrective Action Plan
Corrective action plans are to ensure the avoidance of non-compliant and unallowable transactions in the future. Typically when the Reference Guide for State Expenditures is not followed.
Receipt Requirements, per the
Reference Guide Purchasing Card Transactions
The following requirements apply to all receipts supporting purchasing card transactions.
1. Original receipts supporting transactions are maintained by the agency. Thermo fax documents, because of their temporary nature, shall not be filed as the original at the agency. They should be copied on a standard photocopy machine and the copies should contain the statement “original receipt was a thermo fax document; agency records show that this obligation has not been previously paid.”
2. Receipts must clearly reflect a description of the goods or services acquired, number of units, and cost per unit. The combination of several documents to provide the description, number of units, and cost per unit may be used (i.e., quote sheets, packing slips, web page screen-prints, cash register receipts, charge slips). Numerical code descriptions alone are not acceptable.
3. (a) All receipts for commodities shall be signed and dated by the cardholder to indicate the receipt, inspection, and acceptance of the goods or services. (b) Receipts for services require clear evidence that services were satisfactorily received.
4. Acronyms and non-standard abbreviations for programs or organizational units within an agency should not be used in the supporting documentation unless an explanation is also included.
NOTE: A statement or invoice will not be acceptable unless it meets the criteria contained in the Purchasing Card requirements of the “Invoices” section.
Justification for the purchase
Good justification can cut down on additional emails between us and the agency
The more detail the better
We are not as familiar with each agency and how purchases relate to specific job duties
If the purchase is for an expenditure that requires additional justification by the Reference Guide, include the justification with the initial response to the charge review. Such as items that could be used for the personal
convenience of employees: ○ Hotels > $150/night
○ Valet Parking
○ Limousine services
Common Findings
Preferred Seating
Internal Travel Agent issues – this may be resolved through the new policy
Vendor Promotions
Level 3 Line Item Detail Not Matching
Charge Review Findings: Preferred Seating
Busn Nm Chrg Dt Chrg Amt
DELTA AIR 0060158125392 10/30/2012 $9.00
DELTA AIR 0060158925298 10/30/2012 $9.00
DELTA AIR 0060160901054 11/25/2012 $19.00
DELTA AIR 0060160901055 11/25/2012 $19.00
DELTA AIR 0060161204776 11/30/2012 $29.00
DELTA AIR 0060161204774 11/30/2012 $29.00
Preferred Seats Include: •Bulkhead seats
•Aisle seats toward the front of the plane
•Window seats toward the front of the plane
•Emergency exit row seats
Per Delta: Whether you want extra legroom or just want to add to your vacation experience, consider upgrading to
an Economy Comfort seat. Enjoy even more comfort with up to 4 more inches of legroom and Priority
Boarding when you upgrade. Prices start as low as $9 and seats are available on all two-class cabin
aircraft worldwide.
$114
worth!
Charge Review Findings: Vendor Promotions
Busn Nm Chrg Dt Chrg Amt Total Item Amt
Unit Item Amt
Item Qty Item Cd Item Desc Add Dt Trn Desc
OFFICE DEPOT #24
12/20/12 $101.74 $54.62 $54.62 1. 112999 INK,HP 96,TWIN PACK,BLAC 12/27/2012 OFFICE SUPPLIES
OFFICE DEPOT #24
12/20/12 $101.74 $47.12 $47.12 1. 438950 INK,HP 95,2/PK,COLOR 12/27/2012 OFFICE SUPPLIES
OFFICE DEPOT #24
12/20/12 $101.74 $15.00 $15.00 1. 586910 ITUNES $15 12/27/2012 OFFICE SUPPLIES
Vendors offering weekly promotions (Staples, Office Depot...)
•First option – refuse them
•Make sure internal controls are in place for accountability, such as, gift
cards should be given to management or a central fiscal office.
•Ensure they are used for state business or a public purpose purchase
Charge Review Findings: Vendor Promotions (continued)
Charge Review Findings: Level 3 Line Item Detail Not Matching
Busn Nm Chrg Dt Chrg Amt Total Item Amt
Unit Item Amt
Item Qty Item Cd Item Desc Add Dt Trn Desc
AMAZON MKTPLACE PMTS
12/18/12 $18.90 $12.95 $12.95 1. B003Y008IW ADULT SHORT SLEEVE LEOTARD
12/20/2012
RULES OF ORDER
.
Helpful Reminders
Please redact all sensitive/confidential information prior to
sending it to us.
We require verification of the deposit on items that were
reimbursed.
Cardholders must sign/date the actual receipt.
If a charge has certain requirements, please provide them
with the initial response, just like a voucher.
For example, Avis rental car fuel requires the Avis receipt
and travel voucher (per CFOM #2 2004-2005), so that
documentation should be provided with the original
response to the charge review.
Questions?
Please contact the Purchasing Card Administration:
Michelle Oliver
850-413-5451
Lee Rayner
850-413-5733
Tyesin Payne
850-413-5359
Erica Catledge
850-413-5539
Evangaline Benton
850-413-5669
1
P-Card Controls/Using Forensic Analytics to Detect Fraud, Errors, Waste & Abuse
Omni Dallas, January 15-16, 2013
Data File
Your data file for the workshop should be a file of P-Card transactions for a period of time (e.g.,
all of 2012, or Q4 of 2012). The file should be in an Excel 2007 or an Excel 2010 format.
You may have as many fields (columns of data) as you like. For the analysis we will prepare our
data for analysis by deleting the unneeded fields.
The fields that we would like are:
1. Merchant Name (MerchName)
2. Merchant Number (MerchNum)
3. Transaction Date (Date)
4. Card Number (CardNum)
5. Employee Name (CardName)
6. Transaction Details (Details)
7. Transaction Amount (Amount)in U.S. dollars
You will be fine by having either (1) or (2). However, having the merchant name helps with reviewing
the results.
You will be fine by having either (4) or (5). However, having the employee name helps with reviewing
the results.
The transaction details field is a text field that describes the purchases (e.g., gift card for $500). This
field is optional. It is useful but not essential.
An example of a file is shown below:
2
The first step in the hands-on session will be to rename the fields so that we are all using the
same names, and to delete the fields that are not needed. The useable file might look like,
In the above case we don't have Employee Name (one of the optional fields) or Transaction
Details (another one of the other optional fields).
Other files
The hands-on session will use three Excel templates and one data file with data from two time
periods. These files will be sent by e-mail before the workshop. They'll also be available from
the instructor on CD and on a USB flash drive on the days of the workshop. We will also provide
P-Card data on a USB flash drive to anyone that couldn't bring their own data to the workshop.
Data questions
Questions about the data files can be sent to Mark Nigrini at [email protected].
STRENGTHENING P-CARD CONTROLS AND
USING FORENSIC ANALYTICS
TO DETECT FRAUD, ERRORS, WASTE AND
ABUSE
January 15 to 16, 2013
Dallas, TX
1
2
REVIEW OF INTERNAL CONTROLS
Risk analysis
Agency Purchasing Card Plan Review
Policies and procedures
User Manual
Pcard Administrator Manual
Card issuance
Prerequisites for obtaining a card
Supervisor approval
Pcard administrators are overlooked
3
REVIEW OF INTERNAL CONTROLS
Training
Demonstrate understanding of material
Require refresher training
Cardholder acknowledgement of requirements
Recommend recertifying on a recurring basis
Card closure
Termination reports, but transfers too
Transaction review and approval
Independent review of transactions by supervisor
Must establish a consistent process for late
processors
4
REVIEW OF INTERNAL CONTROLS
Auditing
All payment methods have risks, requiring
appropriate controls
Impossible to prevent all fraud and misuse, but
audits will act as a deterrence
May be performed by a variety of individuals, each
with a specific focus
Technology must be used to our advantage
5
REVIEW OF INTERNAL CONTROLS
Strategic Audits
High dollar transactions
High volume cardholders
Transactions with certain suppliers or mccs
Transactions with certain key words
Transactions occurring during non business hours
New cardholders
Entire departments on a rotating basis
6
REVIEW OF INTERNAL CONTROLS
Reporting
Results must be reported to management
Include action items
Review findings to determine needed program
improvements
Track instances of inappropriate use and mistakes
7
FORENSIC ANALYTICS
8
BE
NF
OR
D’S
LA
W
Refers to the
frequency of
distribution of
the first digit
of a number
using real life
sources of
data.
In this
distribution,
numbers
beginning
with 1 occur
30% of the
time while
numbers
beginning
with 9 occur
less than 5%
of the time.
9
BENFORD’S LAW
Disbursement data
Census data
Sales data
Insurance claims
Small samples
Assigned numbers
Check numbers
Social security numbers
Accounts with a built in
maximum or minimum
i.e. concert ticket sales
Numbers that
obey the law
Numbers that DON’T
obey the law
10
INSURANCE REFUNDS
11
http
://ww
w.a
ud
itnet.o
rg/a
rticles/J
FA
-V-1
-17
-34.p
df
FIRST DIGIT ANALYSIS-DOT
0.000
0.050
0.100
0.150
0.200
0.250
0.300
0.350
1 2 3 4 5 6 7 8 9
PR
OP
OR
TIO
N
FIRST DIGITS
Actual Benford
12
SECOND DIGIT ANALYSIS-DOT
0.000
0.005
0.010
0.015
0.020
0.025
0.030
0.035
0.040
0.045
0.050
10 20 30 40 50 60 70 80 90
PR
OP
OR
TIO
N
FIRST-TWO DIGITS
Actual Benford
13
HIGH VOLUME CARDHOLDERS
15
PRESENTATION AND TEMPLATES
DFS will post the
presentation and provide the
templates shared in class.
16