Purchase Card Manual: Monitoring and Review Program
Last updated on May 7, 2024Purchase Card Monitoring Procedures
The purchase card monitoring procedures are designed to assist chief financial officers in monitoring the purchase card program activity on an ongoing basis. The chief financial officers can delegate the procedures to an appropriate individual.
| Procedures | Done by (Name) | Date | |
|---|---|---|---|
| 1. |
Monthly Procedures – Detailed Review Review Detail Billing Report. Scan report for: - accounts in dispute. Follow-up on items identified with cardholder. |
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| 2. |
Monthly Procedures – Detailed Review Review Detail Billing Report. Scan report for: - accounts over the credit limit; and - accounts significantly below or close to the limit. For accounts over the limit, determine why the credit limit was exceeded, and review credit limits as necessary. Make note of accounts significantly below or close to the limit and include in the annual review of credit limits. |
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| 3. |
Monthly Procedures – Detailed Review Review Detail Billing Report. Scan report for: - accounts with zero balances. For accounts with zero balances, review how long the account has been inactive. If the account was inactive for a significant length of time (six months or more), follow-up with area responsible and determine whether there is a need for the purchase card. |
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| 4. |
Monthly Procedures – Detailed Review Review Account Statement Report. Scan report for: - purchases in restricted categories; and - any other unusual purchases (e.g., purchases that appear to be personal). Follow-up with cardholder and chief financial officer on items identified. |
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| 5. |
Monthly Procedures – Detailed Review Review the Account Statement Report. Scan report for: - cash advances obtained; and - any other large or unusual transactions. Follow-up with cardholder and chief financial officer on items identified. |
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| 6. | Monthly Procedures – Detailed Review Ensure there is evidence of expense authority approval on every cardholder statement package, and ensure the transactions approved are within the limits of his or her authority. | ||
| 7. |
Monthly Procedures – Annual Procedures Request for Card/Card Detail Change Form to Spend Dynamics ensuring transaction limits, merchant category code limits and other restrictions are in place and that the form is complete and properly authorized. |
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Risk Matrix
| Risk | Policy or Proposed Ministry Procedure | Monitoring or Review Procedure |
|---|---|---|
| Authorization | ||
| Unauthorized individual is issued a purchase card. Unauthorized individual is issued a purchase card. | Cards are issued when a Request for Card/Card Detail Change form has been completed, authorized and the cardholder signs the Acknowledgment of Terms of Use and Consent. | Ensure that the appropriate forms have been completed and authorized by the appropriate ministry official. |
| Authorized individual issued card for wrong limits. | Limits are listed on the Request for Card/Card Detail Change form. | Match cardholder details from reports to the Request for Card/Card Detail Change form. |
| Unauthorized individual uses a purchase card. |
Cardholder reports lost or stolen card. Cardholder or expense authority would identify individual during review of statements and back-up documentation. |
Ensure receipt is signed by designated individual by matching signature to authorized sample. |
| Unauthorized, but valid, purchases are made. | Corporate Compliance and Controls Monitoring Branch assessment would identify lack of expense authority approval. | Ensure expense authority approves purchase. |
| Unauthorized and inappropriate purchases are made. | Expense authority review would identify or Corporate Compliance and Controls Monitoring Branch would identify lack of expense authority approval. | Ensure expense authority approves purchase. |
| Employee leaves job or transfers to another position and retains purchase card. | Ministry has system in place to alert ministry card coordinators when a change in employment status occurs. Corporate Compliance and Controls Monitoring Branch would identify cardholders that are no longer on the payroll records. | Cross reference cardholders with payroll records. |
| Credit Limits | ||
| Transaction(s) exceed credit limit (monthly or single transaction limits). | Merchant will not get authorization. | Check transactions are below limit. Review for accounts over credit limit. |
| Transaction split to meet credit limit. | Prohibit splitting items to circumvent transaction limits. | Examine transactions just under credit limit and transactions with same vendor, similar items. |
| Credit limits set by the ministry are too high or too low. | CPPM 4.3.19 requires ministries to review credit limits, at a minimum annually. | Review Detail Billing Report for accounts over, significantly below or close to their credit limit. |
| Individual does not use purchase card | ministry card coordinators monitor card usage. | Review Detail Billing Report for inactive accounts. |
| Accuracy | ||
| Errors occur on the monthly statement. | Cardholder would identify errors. | Review reconciliation of purchase card transactions to monthly statement. |
| Account coding is inappropriate. | Expense authority would identify. | Review reasonableness of account coding. |
| Completeness | ||
| Expenditures are not completely recorded. | Clearing account would not clear to zero. | Review clearing account for unusual entries. |
| Purchases | ||
| Individual makes personal purchases using the card. | Expense authority would identify. | Ensure expense authority approves purchase. Review Account Statement Report for restricted or unusual purchases. |
| Individual obtains cash advances with purchase card. | CPPM 4.3.19 prohibits using the purchase card to obtain cash advances. | Review Account Statement Report for cash advances. |
| Item purchased is covered under Corporate Supply Arrangement (CSA), but is not purchased under an CSA. | Policy requires use of CSA or MSO for purchases if they exist. | Determine if item is covered by MSO CSA and review for appropriate forms. |
| Individual makes purchases for approved work related goods, then keeps them. | CPPM 8.3.1 requires ministries to maintain inventory records of fixed assets. | Verify existence of asset. |
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