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

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Audit Objectives The Office of the Legislative Auditor's fiscal year 2014-2015 annual audit plan included a performance audit of the County's Purchasing Card (pCard) program. The objectives of the audit were to evaluate the appropriateness of pCard purchases and the adequacy of the program administration and oversight, including internal controls to safeguard the County from fraud, waste, and abuse. Audit Scope and Methodology To accomplish our objectives, we: • Developed an understanding of the policies and procedures, processes, and document flows; • Corroborated information through interviews with appropriate personnel, reviewing documentation, and performing tests of documentation and controls; • Compared Purchasing Card Program and Procedures (Department of Finance October 2013), practices and performance measures with Government Finance Officers Association (GFOA) recommended industry best practices; • Assessed compliance with the County's Purchasing Card Program and Procedures, policies and procedures, applicable purchasing guidelines, rules, laws, regulations, code and charter provisions; • Analyzed pCard data ;2 • Judgmentally selected transactions for evaluation using a risk-based approach focusing on unusual vendors or transaction descriptions, unexpected high dollar amount, and cardholder position. Our selection covered a broad range of County departments with the exception of the Department of Water Supply (a semi -autonomous agency); and • Reviewed additional documentation (i.e., inventory logs, department purchase request forms, attendee sign -in sheets, etc.) as needed. During the course of our audit, we identified transactions that required us to expand our initial audit testing. Specifically, we reviewed the Mayor's Office's pCard transactions from January 2009 through May 2015 and one cardholder from the Department of Liquor Control's transactions from January 2011 through May 2015. In addition, we examined all Hawai"i County Council and their District staff's pCards for calendar year 2014. We did not identify any transactions indicating a need for further testing. Z Data was extracted from the County of HawaiTs Eden FRESH accounting system and compared to First Hawaiian Bank credit card statements. Purchasing Card Program :: Objectives, Scope, & Methodology 14