PPMAP Reviews Common Findings - Citibank

1 1 Presented by Yary Tafur FLC Yokosuka PPMAP July 12 PPMAP Reviews Common Findings The NAVSUP Enterprise 2 Audit Process The PPMAP Division performs On Site Reviews (OSR) and Desk Audits (DA) of the following programs: Government-wide Commercial Purchase Card (GCPC - Every 18 Months) Ordering Authority (every 18 Months) SAP Authority (Every Three Years). 3 Audit Process 1. Citibank Reports 4 Audit Process, cont 2. Determine the number of random samples 3. A random sample generator is used to identify the selected sample files to be reviewed. 4. Random Samples are received and audit based with NAVSUPINST 5 Get Ready Set Go !!! 5. Then, 60 days prior to the last date of the cycle period, the PPMAP Analyst will send an Announcement Letter to the activity Commanding Officer (CO) or Senior Leadership. 6 30 Days Your Activity will have 30 Days to provide all the documentation required. 7 Desk Audit or On Site review They consist of three different elements: review Management review review Elements 8 Critical elements Transactional review : 1.

2 Unsupported questionable items 2. Misuse of the purchase card 3. Abuse of the purchase card 4. Failure to use or justify non-use of mandatory sources 5. No Receipt 6. Lost File 7. Separation of Function 9 Critical elements Internal Management: 1. Span of Control. 2. Equitable Distribution of Business. 3. Semiannual Reviews . 4. Training. 5. Internal Operating Procedures (IOP). 6. Repeat Findings . 7. Separation of Duties. 8. Splitting Requirements. 10 Critical elements Internal Management: 9. Convenience Checks Program 10. APC, CH and AO, accountable official letters of appointment and delegation 11 Critical elements Other Elements: Process actions taken as a result of semiannual Reviews of personal property purchased with purchase card Process use of the increased purchase authority Accounts 12 Assigning a Rating Satisfactory Rating Or Unsatisfactory Rating 13 Folder # 1 Copy of the Activity Internal Operational Procedure (IOP) Copies of semiannual Reviews Billing cycles of : 20 Mar 19 Sept & 20 Sept 19 Mar Training Records (Copies of Training Certificates) Copies of all Warrants Copies of Letters of Appointment/Delegation DD 577 14 Semi Annual Reviews 15 Training Log 16 Inadequate training/lack of documented training for cardholders and approving officials Training is essential to ensure that employees have the skills to carry out their responsibilities.

3 Purchase card training should be comprehensive to ensure all cardholders and approving officials are adequately trained. Records should indicate training taken, when taken, and, if appropriate, when refresher training is due. Common Findings 17 Warrants 18 Warrants 19 Exceeding authorized purchase limits Management should be aware of the charge limits of their cardholders and monitor card use to ensure that cardholders do not exceed their assigned purchase level. Managers also should exercise extreme caution when increasing purchase levels for cardholders. Micro purchase - $3,000 Common Findings 20 Delegation Letters 21 Temporary Billing Cycle 22 Rescission Letters 23 DD577 Terminations 24 Folder # 2 Purchase Request Funding is available prior to purchase for each transaction Screening mandatory sources Purchase Log Cardholder Citibank Statement Receipt/Invoice Separation of Function AO validation of receipts Supported documentation 25 30 Days PPMAP Team will have 30 Days to review and complete the report.

4 26 Purchase Log At a minimum, the purchase log shall contain the following: 1. Date the item or service was ordered. merchant name. dollar amount of the transaction. description of the item or service ordered. of receipt. of individual receiving item or service. but not received (pay and confirm). received. sources screened. sources used/not used indicating by cycle, not monthly, in order to reconcile with statement. (1-16, 1-17) 27 Purchase Log Samples 28 Purchase Request Integrity Integrity of purchase request process Signatures for approval of purchase quantity matches receipt handwritten changes without documentation If requirement changes, you need to have documentation (email) for reduced quantities If the requirement increases, you need to cancelled that purchase request and obtain new approvals. (3-1) 29 Purchase Request Integrity Sample 30 ??? 31 Inadequate review of purchase by approving officials.

5 The approving official s review is the most essential management element in the purchase card control system. The approving official is responsible for ensuring that all purchases made by the cardholder are appropriate and that the charges are accurate. Prior approval is required (or as required by IOP, dept head, HA, etc). Common Findings 32 Abusive purchases/no documented need review purchases to determine whether they were for appropriate government use, from designated government sources, or obtained at excessive cost. An example might be the purchase of flat screen monitors for between $800 and $2,500 when a regular 17-inch monitor is available from the GSA schedule for $300. Other examples are purchases of Palm Pilots with designer carrying cases and designer briefcases when there is no documented government need for such items. Common Findings , cont 33 Sole-source purchases without appropriate documentation The FAR, 48 (b), requires solicitation of quotes or bids from a reasonable number of sources or, in lieu of that, sole source justifications for any purchase of more than $3,000.

6 Failure to use required sources of supply The FAR requires agencies to acquire supplies and services from designated sources, if those sources are capable of providing them. Common Findings , cont 34 Comptroller/ Funding Ensure proper and adequate funding is available prior to any purchase card action. Necessary Expense Rule : When you are faced with questions regarding whether you can or cannot purchase items, one general rule is the "Necessary Expense Rule." When applying the necessary expense rule, expenditures can be justified after meeting a three-part test. (2-1) 35 Mandatory Screening Sample 36 37 Separation of Functions 38 Safeguarding The full account number shall not be transmitted by fax or email. If the purchase needs to occur using fax or email, note the form that the vendor should contact the CH by telephone. Account information may be transmitted via the following means: Over the counter Over the phone Internet, secure/encrypted site (command authorization required within delegation letter) 39 Safeguarding 40 Safeguarding 41 Valid Receipts NAVSUPINST PCPN No.

7 12 Proper and Valid Receipt Definition states: A receipt is documentation from the merchant showing: the item(s) purchased, the unit price, the total amount, date of the transaction, and shipping/handling, and tax (as applicable). 42 Receipts Samples 43 Receipt Samples, cont 44 Receipt Samples, cont 45 Receipt Samples, cont 46 Receipt Samples, cont 47 Receipt Samples, cont Not a receipt but a plastic bag for mailing purposes 48 Receipt Samples, cont Split shipment 49 Receipt Samples, cont Not a receipt, no amount 50 Receipt Samples, cont Receipt Translation Japanese to English 51 GCPC Thresholds CONUS Up to $3, for Supplies Up to $2, for Services Up to $2, for Construction Purchases from USA vendors OCONUS Up to $3, for Supplies, Services and Construction to OCONUS Vendors 52 AO Receipt Validation 53 AO Receipt Validation 54 AO Receipt Validation 55 56 57 58 59 Satisfactory Rating Satisfactory rating, the activity shall be required to provide a response to the final report within thirty (30) calendar days which shall include a POA&M supporting the corrective actions to be taken to address the Findings and issues.

8 60 Closeout After POA&M review , PPMAP analyst can closeout the audit. Congratulation !!!! In 18 months 61 As a result of an Unsatisfactory rating, the failed activity will be required to conduct a PPMAP stand-down. PPMAP analyst will schedule with activity to provide on-site support to review policies, procedures and processes. Activity shall provide a POA&M to the PPMAP analyst within fifteen (15) calendar days of the out brief date of the PPMAP detailing the corrective actions taken to correct the deficiencies noted in the report. Unsatisfactory Rating 62 Unsatisfactory Rating After the stand-down, the activity will be returned to full status with all accounts reopened by the PPMAP Office Director. FLCY Spot Checks PPMAP analyst will conduct an on-site follow-up review within 180 calendar days of re-establishing the purchase card and AO accounts. 63 Questions Preguntas?