2015-01 Performance Audit Report: County of Hawai'i's Purchasing Card (pCard) Program

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$29,961.41 that, in our opinion, violated county policies, had a questionable public purpose, and may have violated state law. Transactions which violated county policies, had a questionable public purpose, and may have violated state law Mayor's Office Dept. of Liquor Total # Amount # Amount # Amount Personal Purchases 26 $ 3,689.34 19 $ 6,278.00 45 $ 9,967.34 Miscellaneous Reimbursed Purchases 116 $ 17,723.04 116 $ 17,723.04 Other Questionable Purchases 3 $ 2,271.03 3 $ 2,271.03 Total 145 $ 23,683.41 19 $6,278.00 164 $ 29,961.41 Personal Purchases We noted 45 transactions totaling $9,967.34 that were clearly identified in the accounting system transaction description as a personal charge. Although the County was fully reimbursed for these purchases, the associated costs were initially charged against the County's pCard. Use of the pCard for personal purchases is not in accordance with the Hawai'i State Constitution, Article 7, Section 4 that requires public money to be used for a public purpose. In addition, both the State and County pCard policy strictly prohibit personal use of the pCard. Miscellaneous Reimbursed Purchases The audit identified 116 transactions totaling $17,723.04 that did not have a transaction description or were described in the accounting system as "Miscellaneous - County to be reimbursed" or a variation of this phrase. Detailed itemized receipts or other supporting documentation was not provided since the transaction was reimbursed by the cardholder. Common business practice, as well as the State and County's pCard policy requires original, detailed, and itemized receipts to support transactions. As a result, the County did not clearly demonstrate whether the transaction was for a legitimate department purpose and we could not determine if the transactions complied with the State Constitution requiring public funds be used for a public purpose. We did perform a review of the vendor name but without receipts or other supporting documentation, again, we could not determine a clear benefit to the County. These vendors included but were not limited to Bike Works, Mid Pacific Wheels, Evergreen Restaurant, Honolulu Elks Club, and Hawaiian South Shore. Although the County was fully reimbursed for these purchases, the associated costs were initially charged against the County's pCard. Other Questionable Purchases We noted three transactions totaling $2,271.03 that were of questionable public purpose or public benefit and did not follow County policy. Purchasing Card Program :: Audit Results 17