Purchase Card Manual

2.1 Monitoring and Review Program

Purchasing Card Monitoring Procedures

Risk Matrix


2.1 Monitoring and Review Program

Purchasing Card Monitoring Procedures

The purchasing card monitoring procedures are designed to assist senior financial officers in monitoring the Purchasing Card Program activity on an ongoing basis. The senior 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.

       

    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.

       

    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 purchasing card.

       

    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 senior financial officer on items identified.

       

    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 senior financial officer on items identified.

       

    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

    Review the Request for Card/Card Detail Change Form to BMO details Online ensuring transaction limits, merchant category code limits and other restrictions are in place and that the form is complete and properly authorized.

       

Risk Matrix

    Risk

    Policy or Proposed Ministry Procedure

    Monitoring or Review Procedure

    Authorization

    Unauthorized individual is issued a purchasing 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 Purchasing 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 purchasing card.

    Ministry has system in place to alert 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 purchasing card.

    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 purchasing 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 purchasing card.

    CPPM 4.3.19 prohibits using the purchasing 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.