Citibank Presents: Techniques for Establishing a Successful Audit Process

Transcription

1 GSA SmartPay Conference Citibank Presents: Techniques for Establishing a Successful Audit Process David Ruda, Noak Smith (VA) Vice President, Public Sector Market Manager, Commercial Cards

2 Citibank Presents: Continue the Revolution Citibank Commercial Cards, Government Services The Ninth Annual GSA SmartPay Conference - Philadelphia, Pennsylvania

3 The Ninth Annual GSA SmartPay Conference Citibank Support: Techniques for Establishing a Successful Audit Process Dave Ruda, Noak Smith August 21, 2007

4 Goals and Objectives Learn about techniques that will help you proactively manage your card program and be prepared for an audit! 4 MM.DD.YY

5 Agenda Program Overview Audit Program Tips for Establishing Policies and Procedures Compliance Fraud, Waste and Misuse Indicators Tools Summary 5 MM.DD.YY

6 Program Overview - Department of Veteran Affairs at a Glance Purchase 30,497 accounts / 13,642 cardholders 5% of employees are cardholders Travel 47,934 cardholders 19% of total employees 4.1 million transactions (FY 07 Estimate) $2.4 billion in purchases (FY 07 Estimate) 629,882 transactions (FY 07 Estimate) $90.3 million in travel expenses (FY 07 Estimate) 6 MM.DD.YY

7 Program Overview Office of Financial Business Operations Charge Card Oversight and Travel Policy VA Administrations Facility A/OPCs (approximately 300) POC: Robert Wilson (202) Office of Business Oversight Management Quality Assurance Services (MQAS) Health Care Financial Assurance Division (HCFAD) Capital Asset Management, Acquisition, and Logistics Division (CAMAL) Benefits Financial Assurance Division (BFAD) Support and Analysis Division (S&AD) 7 MM.DD.YY

8 Audit Program - Start Where the Problems Are! Purchase Cardholder reconciliation Approving Official review Proper ratio of cardholders to Approving Officials (VA average 3 to 1) Split/Fragmented Payment Exceeded Cardholder Authority Training Program Travel Delinquencies Expense Report Submission Cash advances Declined authorizations Appropriate Travel Management Centers (TMC) Use of GSA City Pair Airfare Training Program 8 MM.DD.YY

9 MQAS Purchase Card Data Mining Results Exceeded Cardholder Authority Split/Fragmented Administration Transactions Amount Transactions Amount Total FY $351, $672,392 $1,024,076 FY $311, $272,587 $583,966 FY 07-1st & 2nd Quarter 18 $170, $76,691 $247,517 9 MM.DD.YY

10 MQAS/HFAD Results FY 07 FY 07 Consisted of 18 Station Purchase Card Program Travel Card Program Total Inadequate Cardholder Training % 6 33% Inadequate Program Oversight % 3 17% Untimely Submission % 2 11% Failure to Monitor Travel Card Delinquencies % 2 11% Exceeds Warrant 1 6 % % Unauthorized Purchases % 2 11% 10 MM.DD.YY

11 Audit Program Get Help When Possible! A/OPC Audit all cardholders annually Random statistical audits by Financial Services Center Management Quality Assurance Service program reviews Management Quality Assurance Service data mining activities OIG audits (Combined Assessment Program ) OIG anomalies project 11 MM.DD.YY

12 Tips for Establishing Policies & Procedures: Policies Should Encourage Risk Management vs. Risk Avoidance Set specific policies to ensure proper controls are in place Create cross-functional team when establishing policies Involve auditors, IG representatives Publish procedures and widely distribute Develop agency-wide newsletters Use your intranet Incorporate policies into new cardholder training Use policies as the outline for training agenda 12 MM.DD.YY

13 Tips for Establishing Policies & Procedures Develop reminder messages for all cardholders and managers Use statement messages or broadcast s Review policies and procedures at least annually Modify according to audit findings and feedback received during training sessions 13 MM.DD.YY

14 Tips for Establishing Policies & Procedures: Suggested Items for Your Formal Guidelines Who should / should not have cards How to obtain, change and close an account Training requirements References to FARs Don t buy list Supply sources Reconciliation procedures 14 MM.DD.YY

15 Tips for Establishing Policies & Procedures: Suggested Items for Your Formal Guidelines Audit procedures and frequency Review actual fraud / misuse cases Applying authorization controls Use MCC blocks to assist with enforcement of don t buy list Limit spending within MCCs Review transactions and modify as necessary 15 MM.DD.YY

16 Compliance - Good training and Follow-Up What is the notification and follow-up process? Is non-compliance the result of overly strict policies? Is non-compliance the result of vaguely worded policies? Empower cardholders and managers, and hold them accountable Current cardholders and managers should participate in recurring training Ask current cardholders to lead training sessions or mentor new cardholders 16 MM.DD.YY

17 Compliance - Record Keeping & Document Retention Records measure compliance Determine whether centralized / de-centralized storage is appropriate Investigate electronic storage Review proper record keeping techniques during training using actual examples Maintain attendance sheets from each training session Ensure all cardholders sign an agreement 17 MM.DD.YY

18 Purchase Audit Findings and Corrective Actions Timely recording and reconciliation 60% Identify cardholders and approving officials not complying Report to management who is responsible and list non-compliant offices Training 33% Make sure documentation is kept For decentralized operations consider using other sources (GSA s web training, other agencies) 18 MM.DD.YY

19 Veteran s Administration Audit Findings and Corrective Actions Segregation of duties 31% Separations do not only affect cardholders; review HR reports for AOs Review card set ups, things change Improper use 27% AO review of all transactions Provide training Take disciplinary action Let people know what action was taken 19 MM.DD.YY

20 Purchase Audit Findings and Corrective Actions Monthly / annual audits 27% Partner with existing review services Review yourself prior to being audited Compliance with purchasing/travel regulations 20% Establish procedures to be followed for purchasing generally prohibited items (clothing, food, etc.) Split transactions data mining Sourcing review of vendors used (Citibank reports) Implement MCC blocks Card cancellations 14% Establish time frames for canceling inactive cards Establish procedures for canceling cards of exiting employees Review HR reports Card activation reports 20 MM.DD.YY

21 Program Managements is Easier with the Right Tools Here are some ideas: Employ electronic audit methods Benford s Law - software can test for fair statistical distribution of spending per transaction Test all transactions each month Use Citibank electronic tools to identify transactions requiring more research Transactions by MCC Review declined transactions Similar transactions each month GSA s Blueprint for Success GAO Web site: Auditing and Investigating the Internal Controls of Government Purchase Card Programs (Publication no: GAO G) 21 MM.DD.YY

22 Summary Department of Veteran Affairs success story Good policies and procedures Spotting fraud, waste and misuse Tools you can use 22 MM.DD.YY

23 Reminders Thank you for attending this session! Visit the Citigroup Welcome Center Room 104 A/B, 1 st Floor National Industries for the Blind will have a display of products Conference Slide Show come see yourself shine! Visit the Citigroup Technical Demonstration Center Room 106 A, 1 st Floor Please take a moment to complete your GSA survey for this session! Citibank party is tonight! Convention Center, Great Hall, Level 3 at 7:00 PM! 23 MM.DD.YY

24 Questions? 24 MM.DD.YY

25 Reminders Thank you for attending this session! Visit the Citibank Welcome Center Room 104 A/B, 1 st Floor National Industries for the Blind will have a display of products Conference Slide Show come see yourself shine! Visit the Citibank Technical Demonstration Center Room 106 A, 1 st Floor Please take a moment to complete your GSA survey for this session! Citibank party is tonight! Convention Center, Great Hall, Level 3 at 7:00 PM! 25 MM.DD.YY

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