Finding Text
2023-002: Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing #21.027, Disbursements
Condition:
During our review of the locality’s disbursements related to the program, it was noted that procurement policies were not being followed. In 3 of 25 instances, credit card purchases were not properly approved.
Criteria:
CSLFRF funds may be used for eligible expenses subject to restrictions set forth in Treasury’s Interim Final Rule and Final Rule at 31 CFR Part 35. Also, 2 CFR Part 200 section 303 requires effective control over, and accountability for, all funds. According to the City’s procurement policy, department managers and directors are supposed to review and approve credit card purchases on a monthly basis. Review includes ensuring appropriate supporting documentation is included. Documentation should support that transactions are for allowable expenses.
Cause:
Though the City has controls that push compliance, monitoring and enforcement by Finance is lacking. Additionally, the volume of transactions make monitoring challenging. Some transaction support and approval are routed electronically through US Bank for automation, but there are thousands of monthly transactions.
Effect:
Noncompliance with federal grant requirements with regard to disbursements.
Questioned Cost Amount:
Not applicable.
Perspective Information:
Three out of twenty-five transactions.
Recommendation:
We recommend disbursing funds in accordance with the City’s procurement policy including a process that requires approval of all credit card purchases.
View of Responsible Officials and Planned Corrective Action:
Management concurs with the recommendation and will ensure that procurement policies including those over credit card purchases will be adhered to. Starting in fiscal year 2023 communication to department directors occurred reinforcing that reviewing and approving financial transactions is necessary under City policy. The City’s Department of Finance on a monthly basis is monitoring P-Card compliance with standard metrics and has enhanced communication of internal deadline dates for coding and approving transactions. Follow-up is performed by the Accounts Payable coordinator to address issues with individual users and departments who have unapproved transactions. This practice will continue moving forward with issues of continued non-compliance by users and directors potentially resulting in revoking privileges of using city purchasing cards.