Acquisition Cards - March 2012
1.1.1 Acquisition cards are credit cards that provide a convenient method of procuring goods and services while maintaining financial control. Acquisition card usage in the Department of Justice is governed by the TBS Directive on Acquisition Cards. Under this Directive, the Chief Financial Officer (CFO) is responsible for establishing risk-based management practices and controls to ensure economical, efficient, and secure use of acquisition cards. At the time of the audit, the Department of Justice had not issued a departmental policy. Procedures and guidance on acquisition card use is provided to departmental staff on the Chief Financial Officer Branch (CFOB) and Contracting and Materiel Management Division (CMMD) sites on JUSnet. The Policies, Systems and Corporate Accounting Division, CFOB, in conjunction with CMMD, has established departmental instructions with respect to the nature and value of transactions that may be charged to an acquisition card.
1.1.2 CMMD provides departmental training to cardholders at headquarters and to regional acquisition card coordinators on the use of acquisition cards. The regional acquisition card coordinators then provide training to cardholders in their regions. The Departmental Coordinator, Acquisition/Travel Cards & Relocation, Corporate Accounting and Reporting (Departmental Card Coordinator) is responsible for the issuance, authorization, and control of acquisition cards.
1.1.3 This audit was identified in the 2011-12 Risk-Based Audit Plan and was selected due to the widespread and growing use of acquisition cards and the time since the last audit (2005). As such, it is important to determine the extent to which acquisition cards are used for the intended purposes; the level of compliance with the Financial Administration Act (FAA), the TBS Directive on Acquisition Cards, and departmental procedures; the level of monitoring of acquisition card activities; and the extent to which acquisition cards are accounted for and safeguarded.
1.2 Audit Objective and Scope
1.2.1 The overall objective of this audit was to provide assurance that acquisition card usage in the Department of Justice is effective.
1.2.2 The scope of the audit focused on:
- the management control framework;
- risk management practices;
- controls in place to ensure compliance with the TBS Directive on Acquisition Cards, the FAA, and departmental procedures;
- user awareness of policy and procedural requirements and training;
- monitoring activities.
1.2.3 The audit examined acquisition card usage at headquarters and in the Atlantic, Quebec, and Ontario regional offices. The audit examination included transactions from fiscal years 2009-10 and 2010-11.
1.2.4 The scope of the audit did not include testing of compliance with Section 33 of the FAA for acquisition card payments.
1.3 Audit Criteria
1.3.1 Audit criteria were developed in consideration of the risks identified during the planning phase of the audit and were based on guidance from the Committee of Sponsoring Organizations (COSO) Entity Level Control Framework, the TBS Core Management Controls: A Guide for Internal Auditors, and the TBS Directive on Acquisition Cards (Oct. 2009). All criteria were approved by Internal Audit Branch management. For high level criteria, see Appendix A.
1.4 Approach and Methodology
1.4.1 The planning and on-site examination phases of the audit were conducted between May and August 2011. For headquarters and the three regions audited, the audit reviewed 7,589 transactions for 2009-10 and 10,975 transactions for 2010-11 for a total of 18,562 transactions. A detailed description of the approach and methodology is outlined in Appendix B of this report.
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