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

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Background What is a pCard? A purchasing card (pCard) is similar to a credit card. It is owned by the County and issued to County employees to make official purchases. The Purchasing Card Program (pCard program), established by the State of Hawai`i's State Procurement Office (SPO), offers benefits to the State and counties including improving efficiency, flexibility, and convenience when buying official goods and services. The County of Hawaii adopted the State's program in 2003 and it is administered by the County's Department of Finance in coordination with the State Procurement Office. The County's pCard is a MasterCard issued by First Hawaiian Bank and in 2014, there were approximately 236 County pCard cardholders. Cardholders are required to sign and abide by a Cardholder Agreement approved by the Purchasing Card Administrator' and if the pCard is used for unlawful or improper purposes, the cardholder may be subject to disciplinary action, up to and including termination, for that misconduct. Why use a pCard? The pCard program was established to reduce the administrative burden associated with issuing purchase orders and processing invoices for payment without sacrificing controls over safeguarding of assets and preventing and detecting errors and fraud. Specifically, the pCard program is designed to: ➢ Improve management controls; ➢ Increase purchasing efficiency; and ➢ Allow payment to vendors by the card issuer generally within two days of the purchase. What can be purchased using a pCard? A purchase may be made using a pCard if the expenditure is budgeted, for a legitimate department purpose, appropriately authorized, within the pCard limits, and is made in accordance with the County's Small Purchase Guidelines. County policy also establishes restrictions on what cardholders can buy with these cards. Examples of restricted purchases include: • Any purchase over the established limit for the pCard • Liquor, unless specifically authorized • Cash • Goods and services for personal use, unless specifically authorized ' A Purchasing Card Administrator is defined by the Purchasing Card Program and Procedures October 2013 as the County Director of Finance or their designee and is authorized to approve or certify Cardholder Agreements, pCard application, credit card changes, and cancellations. This individual may also be the Department pCard Coordinator. Purchasing Card Program :: Background 12