Acquisition Cards - March 2012
Audit Opinion/Overall Conclusion
The Department of Justice has effective practices in place for the use of acquisition cards. Section 34 approval processes are adhered to in accordance with the requirements of the 2009 TBS Directive on Acquisition Cards. Appropriate and timely training activities are conducted for all resources involved in acquisition card transactions, and monitoring activities occur regularly.
Enhancements are required for the use of acquisition cards to be in full compliance with departmental procedures, the Financial Administration Act (FAA) requirements, and the TBS Directive on Acquisition Cards. Required enhancements include: implementing efficiencies for acquisition card payments; complying with the departmental acquisition card transaction limits set out in the Supporting Notes to the Delegation of Financial Signing Authorities, FAA requirements and the TBS Directive; ensuring the security of acquisition cards; and formally communicating roles and responsibilities, including the finalization of a departmental procedural document. These required enhancements have led to the recommendations in this report.
The Department of Justice uses acquisition cards as a convenient method of procuring goods and services while maintaining financial control. The Policies, Systems and Corporate Accounting Division, Chief Financial Officer Branch (CFOB), in conjunction with Contracting and Materiel Management Division (CMMD), has established departmental instructions with respect to the nature and value of transactions that may be charged to an acquisition card.
This audit was identified in the 2011-12 Risk-Based Audit Plan. The overall objective of the audit was to provide assurance that acquisition card usage in the Department of Justice is effective. The scope of the audit included an examination of acquisition card usage at headquarters and in the Ontario, Quebec, and Atlantic regional offices for fiscal years 2009-10 and 2010-11.
The Department could achieve additional savings by taking advantage of the card provider’s early single payment discounts. The Department has not formally analyzed the requirements to implement this payment option in the Integrated Financial and Materiel System (IFMS). As a result, more than $18,000 in savings over the two past fiscal years has not been realized. Senior management advised that there is a planned initiative to implement this ability in IFMS after other departmental priorities have been completed.
At headquarters, the Library made payments on the same day to the same supplier in amounts that, when combined, exceeded the acquisition card transaction limit of $5,000. Procurement processes were respected with regard to these purchases; however, the proper payment process was not followed.
Inconsistent compliance with the performance of Section 32 of the FAA was found at headquarters and in the three regions. Staff view Section 32 performance as an administrative burden. When purchases are made without pre-approval, there is a risk that funds may not be available and payments may be made for purchases that may not have been otherwise approved if the proper Section 32 authorization were in place.
Approximately 40% of cardholders at headquarters and in the three regions do not keep their cards in a secure location when not in use. Some cardholders indicated that it was impractical to keep their cards locked in their offices. The risk of potential loss or theft increases when acquisition cards are not kept in a secure location.
The Department provides adequate mandatory training to acquisition cardholders on their responsibilities. The roles and responsibilities of other resources involved in the acquisition card process have not been formally communicated. The finalization and distribution of a draft procedural document will assist in providing staff with guidance on roles and responsibilities. To mitigate the risk that key tasks may not be performed and completed, staff should be fully aware of the respective roles and responsibilities of those involved in the acquisition card process.
The Department of Justice has worked toward implementing practices to improve the management control framework for the use of acquisition cards. Additional enhancements are required in order to strengthen the effectiveness of the management control framework.
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