Monday, October 09, 2006
WSU audit reports misuse of credit cards
At a time when Washington State University is bracing for major state cutbacks, the school is having trouble minding its small expenses.
A recent Washington State Auditor review of WSU's financial accountability gave the school a generally clean bill of health, with one exception. The audit pointed to problems in the university's purchasing card system, a credit card program that last year amounted to $5 million in transactions.
The problem, according to the auditors' findings, is that the university isn't keeping proper watch over where the money is going.
Under the program, 413 people in more than 200 departments have cards to use for buying tools and supplies for their work units. Out of the 50 cardholders in 18 departments the auditors chose to review, more than a third came up in violation of WSU's rules.
"The way we look at it, if we had found one instance in one department, we would view it differently," said Debbie Pennick, the auditor who supervised the review of WSU. "Here it looks more like a systemic issue requiring university-wide training or policy changes."
At the WSU Tri-Cities campus, for example, the auditors found that no one was reviewing the expenditures for six of the 12 cards.
In the Pullman-based School of Biological Science, which had the largest number of transactions with two cards totalling as much as $190,000 each, again, no supervisor was overseeing the expenditures.
In that instance, one employee also was violating the rule of limiting purchases to less than $2,500. She was circumventing the limit by dividing up her orders. The employee used two different cards to buy lab supplies and instruments. In one instance, a $5,755 bill was divided into four separate charges, three on one card and one on the other. The auditors caught it because all the charges were listed on one invoice from the supplier.
Auditors found similar violations in the College of Nursing and the Economics Department. In the latter, two cards were used to divide a $2,729 bill for Xerox cartridges.
In other cases, employees were using the cards for travel, postage and meals, which is against university policy. And in six instances, receipts and supporting records for the purchases had not been kept.
The Auditor's office notified the university of its results last month and encouraged the school to beef up its monitoring system.
"We had a failure to follow procedure," said Barry Johnston, Director of Business Services/Controller at WSU. While the cardholders had all been properly trained, "we did a less than stellar job training the people who supervise the expenditures of the card holder," he said.
WSU has been free of state audit findings for several years, but in the past decade has had trouble with misappropriation of public property and funds. According to a 1998 audit, the university lost track of about 400 pieces of computer equipment in the School of Electrical Engineering/ Computer Sciences. It also had weaknesses in its cash handling policies and controls.
Johnston said he was glad this time there hadn't been a finding of abuse, fraud or theft.
"There was no loss here," he said. "We just have to improve our training for the entire card program."
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