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

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• Spending Guidelines (Memorandum 08-12 dated December 15, 2008) details specific restricted purchases including bottled water and water service, brief cases, cell phone plans, gifts ("omiyage"), department shirts, and flowers. • Request for Adjustments and Exceptions (RAEs) (Memorandum 04-9 dated May 25, 2004) establishes a method of requesting adjustments and exceptions to specific purchases and transactions. • Purchase of Alcohol (Memorandum 99-09 dated July 19, 1999) prohibits the purchase of alcohol for consumption by employees or for functions involving the County with the exception of "when such purchase is necessary for the entertainment of dignitaries by the Mayor, the Chairman of the County Council, or their authorized representative. Any such exceptions shall have the Mayor's written approval or the approval of the Chairman of the County Council, whichever is appropriate." • FRESH Account Payable Tidbits (October 9, 2012) describes how to process pCard transactions. To ensure all county policies and procedures are followed; the cardholder and/or the pCard coordinators must review numerous pieces of guidance. There is currently no consolidated source that includes all current and applicable pCard rules. Each County departments process their pCards into the financial accounting system differently; each recording the transaction in varying levels of detail. By having to rely on multiple pieces of guidance and a lack of consistent detailed training, the risk that unauthorized transactions may occur or county policies and procedures are not followed greatly increases. Since it is the Department of Finance's intent to use the Purchasing Card Program and Procedures as its official pCard policies and procedures, it must make this clear to cardholders, update it annually, and provide on-going training to supervisors, cardholders, and department pCard Coordinators. As of June 2015, the Department of Finance indicated they are taking the necessary actions to improve the oversight of purchasing cards by providing training to departments, including the Mayor's Office. We have not corroborated this information, nor have we reviewed the training material. Use of available technology could improve program monitoring. Better use of technology could improve monitoring of pCard transactions Technology is a key element to helping the County more effectively target potential card misuse and streamline the monitoring process. In conjunction with the pCard issuer, the County should have access to a variety of standard reports that provide the transaction detail that may highlight anomalies in pCard purchases including: • Split transactions (i.e., two or more transactions Purchasing Card Program :: Audit Results 114