MAS NEWSLETTER
A quarterly publication distributed by UMBC Management Advisory Services
Web Site: http://www.umbc.edu/mas
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VOLUME 2, NUMBER 4 |
APR, 2002 |
CURRENT STATUS OF LEGISLATIVE AUDIT
As you should know by now, the current legislative audit began on January 22, 2002. The audit is expected to last approximately six months. While here, the auditors will follow up on any recommendations they made in past audits and will review other topics on which they may not have previously commented. Some areas the auditors have already spent time reviewing include Cash Receipts, Accounts Receivable and Purchasing Cards. They will continue working in these areas and others like Payroll, Financial Aid, Student Residency and Revolving Accounts, to name a few.
While they don’t have too much information to share with us so far concerning the audit, they have informed us that based on their purchasing card reviews, most cardholders were doing a good job. (See Thank You below) For the few cardholders and supervisors who they noted were not maintaining adequate supporting documentation for all purchases or who were not always conducting and documenting a timely supervisory review, MAS will contact you directly to discuss the necessary corrective actions. Check out the MAS web site and future issues of this newsletter to stay informed about the progress of the current audit.
THANK YOU
We would like to acknowledge and thank the following
cardholders and supervisors. They were recently audited by the legislative auditors
for compliance with purchasing card program policies and passed with flying colors!
Keep up the good work!
| Cardholder | P-Card Supervisor |
| Tulay Adali | Robert Chester |
| Arthur Brown | Yvette Mozie-Ross |
| Phil Clark | Gina Cavanaugh |
| William Fria | Joe Hill, Sharon Habighurst |
| Vicky Lloyd | Gina Cavanaugh |
| Tom Mollen | Joe Hill, Sharon Habighurst |
| Scott Randles | Janet McGlynn, Craig Weidmann |
| Winnie Schwartzbeck | Ron Weller |
| Creighton Smith | Dennis Cuddy |
| Ron Weller | George Vitak |
| Kathy Wimpling | Geoffrey Summers |
AUDITING ISSUES IN THE NEWS
ENRON, ALLFIRST, and the DEPARTMENT OF DEFENSE(DOD). We have
all heard and read about these entities in the news lately because they all
have one thing in common. They have experienced a breakdown in management that
contributed to either their downfall or to employee theft or fraud. In other
words, it comes down to what was the TONE THAT WAS SET AT THE TOP OF THE ORGANIZATION?
The tone at the top of ENRON appears to have allowed for management override of controls and tolerance of questionable accounting practices, leading to the dramatic downfall of the energy giant.
The tone at the top of ALLFIRST appears to have allowed for blind trust in an experienced employee and failure to recognize the importance of a properly established system of internal controls.
The tone at the top of the DOD appears to have allowed for a Purchasing Card program plagued by a weak internal control environment, flawed or nonexistent policies and procedures and employees that do not adhere to valid policies.
Management plays a key role in demonstrating and maintaining an organization’s integrity and ethical values, especially in setting and maintaining the organization’s ethical tone, providing guidance for proper behavior, removing temptations for unethical behavior and providing discipline when appropriate. These steps have been taken at UMBC by President Hrabowski and top University Officials to set the right tone. If you supervise an area, remember that how you conduct yourself sets the tone for your employees. Don’t be the next Enron, Allfirst or DOD.
P-CARD CORNER
INTERNET PROVIDERS FOR OFF-CAMPUS COMPUTERS
If a cardholder pays for an internet service provider (e.g., Comcast, Earthlink) for an off-campus computer with their purchasing card, the internet user must obtain written consent for these charges from their supervisor. The approval should be kept on file in the department and be available for examination during p-card reviews.
FOOD PURCHASES
Food purchases are prohibited on the p-card unless the food
was purchased for an authorized oncampus activity or teaching purpose. If the
activity was authorized, the following documentation is required: 1) Food
Services Waiver, 2) itemized receipts, 3) list of activity participants and 4)
description of the activity.
RECORDS RETENTION
Purchasing card documentation is to be retained for at least five (5) years after fiscal year end, either in the cardholder’s department or in department archives that can be readily accessed. If you are spending grant funds, consult the grant document to determine if you are required to maintain records for extended periods. For reconciliation and audit purposes, departments must retain on a monthly basis the following items:
Transaction log
Receipts/packing slips/etc.
VISA statement
Copy of FAS statement
Evidence of reallocation of charges (i.e., P-card Web reallocation history, JV)
REALLOCATION CUTOFF DATE
The Department of Procurement and Financial Services have decided to extend the cutoff date to reallocate purchasing card charges using the P-card Web system. You now have until the end of the day on the 23rd of each month to reallocate charges. After this date you must submit a paper JV to Systems Accounting.
KUDOS…
…to the Physics Department. A recently completed purchasing
card review by MAS has shown this high volume user is managing its program
well. Thanks for your efforts and keep up the good work!
HAPPY SPRING FROM MANAGEMENT ADVISORY SERVICES
