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Existing controls are operational and generally effective and <br />opportunities to strengthen them exist. <br />The County of HawaiTs Purchasing Card (pCard) program has implemented several best <br />practices for internal controls. Internal controls are <br />broadly defined as a process effected by management <br />Internal Controls are that is designed to provide reasonable assurance on the <br />generally adequate effectiveness and efficiency of operations, reliability of <br />financial reporting, and compliance with applicable laws <br />and regulations. Internal controls can help achieve <br />performance targets and prevent loss of resources. <br />Audit testing of internal control procedures included the following risk areas where we found no <br />exceptions: <br />Separation of Duties — This is a control to ensure that no single person has full control <br />of a transaction. Audit work found that the departments tested had adequate separation <br />of duties. <br />• Purchasing Card Limits — Any purchase over the established limit for the pCard is <br />restricted. Testing did not identify any transactions that exceeded the cardholder <br />purchasing card limits without documented approval from the Finance Director. <br />• Restricted Purchases — Each pCard has a magnetic strip programmed with descriptive <br />categories of valid or restricted merchants (merchant category codes, or MCC's). For <br />example, some of these merchant types include bank charges, cash advances, drinking <br />places (bars and taverns), and laundry and cleaning services. We did not identify any <br />transactions that violated the County's pre-set blocked MCC's. In addition, there were <br />no documented instances where the Finance Director or designee overrode a blocked <br />MCC request <br />We again commend the Department of Finance on the effectiveness of the controls that have <br />been implemented. However, audit work did identify areas where the Department of Finance <br />could enhance its controls to further encourage compliance and dissuade misuse or fraudulent <br />use of pCards in the future. <br />Purchasing Card Program :: Audit Results 111 <br />