Finding 513609 (2024-006)

Criteria: Institutional policies and procedures, as well as best practices for P-Card usage, require that all purchases made with a P-Card be authorized, documented, and for legitimate business purposes. Condition: Refer to Finding 2024-005 in the Financial Statement Findings section (Section II) of this report. Fraudulent charges totaling $79,772 were charged to a federal grant via misuse of a P-Card. Subsequent to the draw down of federal funds management identified the misuse and immediately adjusted a subsequent request effectively reimbursing the federal funding source for funds received. Cause: The misuse of the P-Card occurred due to insufficient oversight and monitoring of P-Card transactions by supervisory personnel, lack of adherence to established controls, and untimely monthly reconciliation’s. In addition it appears there was inadequate training for P-Card holders on proper usage and documentation requirements. Effect: Unauthorized purchases totaling $85,258 represent a financial loss to the institution and unauthorized amounts being charged to a federal grant. As noted above the federal grant was immediately reimbursed for these unallowed costs. Questioned Costs: None Context: After the reimbursement made total costs charged to the grant award were approximately $65,000 none of which were P-Card transactions. The grant was administered solely by one individual who was terminated by the University and the award has been closed out. Repeat Finding: No Recommendation: It is recommended that the institution strengthens its controls over P-Card usage by implementing the following measures: 1. Conducting a thorough review of all P-Card transactions to identify any additional unauthorized purchases. 2. Enhancing training programs for P-Card holders to ensure they understand the policies and procedures for proper P-Card usage. 3. Increasing the frequency and rigor of P-Card transaction reviews and audits. 4. Implementing stricter approval processes for high-value transactions. Views of responsible individuals: Management acknowledges the finding and will take immediate corrective actions. This includes conducting a comprehensive review of current P-Card transactions, revising the training program for P-Card holders, and enhancing the monitoring and approval processes to prevent future misuse.