Best Practices in Use of
Procurement cards
December 9, 2015
TOPICS
• Background
– What are Procurement cards?
– What are the advantages of using procurement
cards?
– What are the disadvantages of using
procurement cards?
• Best Practices – Management level
– What are management’s responsibilities?
• Best Practices – Reviewer/User level
– What are reviewer/user responsibilities?
• Additional Resources and Q&A
BACKGROUND
• What are Procurement Cards?
– Personal charge cards that have the
ability to set individual charge limits (daily
and monthly), transaction limits, and
merchant type restrictions.
BACKGROUND
• What are the advantages of using
procurement cards?
– Streamlines low-value purchases (less use
for petty cash)
– Timely payment of vendors
– Eliminates individual payments to vendors
– Ability to pay outside vendors and online
vendors
– Ability to set individual spending limits
BACKGROUND
• What are the disadvantages of using
procurement cards?
– In some instances increased
documentation
– Opportunities for fraudulent, improper
and abusive purchases
Responsibilities of Management
• Administration of the Program
– Procurement card manual
– Approving users and limits
– Training of users
– Standardized procedures both for the
users and reviewers
– Monitoring of implementation
– Use of data mining to identify unusual
transactions
RESPONSIBILITIES OF USERS/REVIEWERS
• Ensure compliance with policies and
procedures
– Documentation
– Competitive bids
– Proof of receipt of goods
– What are violations / restricted uses?
• Prevent and detect misuse of cards through
internal controls
• Reporting of misuse and violations
• Cancellation of cards upon termination
ADDITIONAL RESOURCES
• GAO – Audit guide
– http://www.gao.gov/new.items/d0487g.pdf
• COSO – Internal control guidance
– http://www.coso.org/ic.htm
• CA State Procurement program resources
– http://www.dgs.ca.gov/pd/Programs/CALCard.aspx
• Recent Internal Audit of Procurement Card – San Diego
– http://www.sandiego.gov/auditor/reports/fy13_pdf/
audit/13-003_pcard.pdf
• Recent SCO Audit of Procurement Card
– http://www.sco.ca.gov/FilesAUD/03_2012saa_caltranscalcard.pdf
QUESTIONS?
HONG NGUYEN
[email protected]
1839 W. REDLANDS BLVD.
REDLANDS, CA 92373
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