DeKalb County P-Card Audit: Commissioner Stan Watson

8/10/2019 DeKalb County P-Card Audit: Commissioner Stan Watson

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DeKalb County Board of

Commissioners Purchase Card Audit

Commissioner District 7:

Unhap py Tax-payer--& --Ve t-e -F .Ee -m l-----


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II I I

DEKALB COUNTY BOARD OF COMMISSIONERS

COMMISSIONER DISTRICT NO. 7

RJ~PORTON AGREED-UPON PROCEDURES

FOR THE PERIODS APRIL 2004TO APRIL 2014


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DeK alb Count y Board of Commi ss ioner s Purch as e Car d Rev iew

District 7

I

O aH u P LU N KE TT

COe, P.C .

I I = F I I I I I I I I 1 1 1 1

ACCOUNTANTS & CONSULTANTS 1800 PElICHTREE RD. NW SUITE 333 ATLANTA GEORGIA 30309 VOICE (404) 351-6770' FAX (404) 351-6845

1050 17TH ST., N.W. SUITE 600' WASHINGTON, DC 20036 VOICE (202) 496-5307 FAX (202) 466-2400

EMAIL' [email protected] WEB WWW.OHPCPA.COM

DeKalb County Georgia Board of Commissioners

Commissioner District NO.7

DeKalb County, Georgia

INDEPENDENT ACCOUNTANTS' REPORT ON AGREED-UPON PROCEDURES

We have performed the procedures engagement as listed in the Table of Contents, which were

agreed to by the DeKalb County Board of Commissioners (the BOC ), SOielYto assist Jth

monitoring proper application of certain policies and procedures relating to analyzing the

expenditures of each member of the BOC and their staff for the years commencing April 2104

through April 2014. .

These services are delivered by applying a set of agreed-upon queries to records contained in

your system database via computer-assisted data-mining technologies. The

objective

of these

procedures was to identify within the database any anomalies or other matters ~at would require

further investigation. Such anomalies could be an indication of an error, either intentional or

unintentional, a need to refine your internal control framework or a need to improve operational

efficiencies. I

The County's management is responsible for the contents of the database and all related

accounting records. Tllis procedures engagement was conducted in accordance with attestation

standards established by the American Institute of Certified Public Accountants. The sufficiency

of these procedures is solely the responsibility of the specified party to this report. Consequently,

we make no representation regarding the sufficiency of the procedures as listed in the Table of

.lontents either for the purpose for which this report has been requested or for any other purpose.

We were not engaged to, and did not conduct an audit, the objective of which would be the

expression of an opinion. Had we performed additional procedures, other matters might have

come to our attention that would have been reported to you.

This report is intended solely for the information and use of the BOC and its management and

should not be used by anyone other than those specified parties.

I ~ \ ~ ~ .

Atlanta, Georgia

I

October 3,

2014


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I

I 'OeKc i lb County Board of Commissioners-Purchase Card Review District 7

REPORT ON AGREED-UPON PROCEDURES

COMMISSIONER DISTRICT 7

DEKALB COUNTY GEORGIA BOARD OF COMMISSIONERS

FOR THE PERIOD APRIL 2004 to APRIL 2014

Table of Contents

PAGE N([).

A.

Executive Summary 1 .4-5

B. Agreed-Upon Procedures Defined 6

c .

General Information , 6

DeKalb County Policies 6-7

e Purchase Card Policy

~ Travel Policy

Ii J Mobile Policy

e Retention Policy

D.

E.

Summary of Procedures Performed 7-8

e

Purchase Card Expense Review

5 Non Purchase Card Expense Review

F. Summary of Findings Purchase Card Transactions................... . 9-11

General

s Specific

G. Purchase Card Review - Individuals 12-13

H. Non Purchase Card Transactions 14-'15

~ General


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I I I

DeKalb County Board of Commissioners' Purchase Card Review

District 7

I

Executive Summary - District 7

We

l

performed those procedures stipulated in the DeKalb County's Georgia Professional Service

Invitation to Bid, (ITB No. 14-100413) as mandated by the Board of Commissioners' resolution dated

April 22, 2014. The objective of these procedures were to review DeKalb's County Procurement Card (P-

Card) expenditures to consider (a) whether purchases were for appropriate material goods used by a

Commissioner in the normal functioning of a Commission office; (b) whether there is evidence of a valid

work product when a service is purchased; and (c) what evidence exists that meals and travel expenses

wer~ for County business. The scope of this review was to cover the periods commencing April 2004

through April 2014. The sufficiency of the procedures performed is solely the responsibility of those

parties specified in this report. I

P-Cards offer a quick and efficient means of making business purchases. According to a National

Association of Purchasing Card Professionals (NAPCP) evaluation, typical savings resulting from P-Ca1d

usage are $63 per transaction.' Efficiencies include the cost of vendor maintenance, purchase orders,

wages of employees that process payments, and resources for check disbursements. Inconsistent

compliance with P-Card policies provides a less than desirable internal control environment and reduces

level of transparency for County resources utilization.

During our engagement, we reviewed internal audit reports issued by the Internal Audit & Licensirig

Division on all of the District and Central offices covering transactions from 2009 to 2011. Deficienci~s

cited in these reports included: (a) improper or nonexistent transaction logs; (b) charges unsupported ~y

receipts or other documentation; (c) lack of approval at the appropriate levels by authorized personnells

identified in the Policies and Procedures Manual; and (d) incorrect coding of transactions by budget lirle

categories. Our procedural review revealed deficiencies concurrent with those previously found by tHe

Internal Audit reports. A substantial portion of the supporting documents including the P-Ca~d

accounting logs were never prepared or submitted in accordance with the Policies and Procedures adopted

by the County. J

This procedural review took into consideration the County's five (5) year mandatory record retenti '11

policy inclusive of the limited availability of any records prior to 2009. Additional efforts were therefore

made to secure any documentation still in possession by former employees. Letters were sent to addresses

on I file with DeKalb County Human Resources requesting assistance in providing supporting

documentation. .

Specifically, our review of District 7 covered a period for which current Commissioner Watson has held

his Ipositon since 2010 after succeeding former Commissioner Connie Stokes. District P-Card purchases

cOlymenced in 2006 and totaled approximately $57,937. Three (3) people within the district were granted

purchasing cards during the scope period, Of the 3 cardholders observed, we received no supporting

documentation for 1 former employee whose 84 transactions totaled $7,041. We reviewed all related

transactions and determined that based on the individual transaction descriptions, the expenditures

aPrared to be County business related.

Individual card expenditures ranged from $5,206 for K. Lajoie to $45,689 for Commissioner S. Watson.

The concentration of purchase card incurred expenses was applicable to county business related travel,

training and conferences. Purchase card usage within District 7 remained consistent through 2010 before

increasing four-fold in 2011 to $11,836, decreasing by 40% in 2012 to $7,253, before nearly tripling in

I .

2013 to a full year high total of$21,659.

1www.napcp.org

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/D eK 31b C ou nty B oard o f Co mm is sio ners Pu rc h as e Card Rev iew

D is tr ic t 7 ..

District 7 P-Card expenditures revealed limited deficiencies

i n

the availability of transactional support for

it cfrdholders. The current administration presented approximately 78% of supporting receipts for its

transactions. We reviewed the individual transaction descriptions and note they appear to be County

business related; however without the observation of actual receipts, reasonable assurance was limited.

We boted the District's overall compliance with existing policies.

Policies and procedures provide a valuable management control on P-Card operations. Mandatory

procedures help provide an essential framework for integrating financial and operational best practices.

Corhpliance by all levels of County staff, including the Commissioners is recommended to ensure

financial transparency and objective stewardship of County resources.

To mitigate non-compliance and exposure to fraud, waste and abuse, mandatory training on P-Card

Policies and Procedures should be implemented for all authorized users. A periodic reassessment of these

policies and procedures should be viewed as a means by which internal controls are enhanced on the use,

authorization, and documentation and approval process. Further, there should be a review of the P-Card

system integration with the County's organizational structure. The current policy is vague on which

management position is accountable and appropriate to review and approve Commissioner level

transactions.

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I


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Distrlct 7

eKalb County Board of CommissionersPurchase Card Review

Agljeed-Upon Procedures Defined

An agreed-upon procedures engagement differs from a financial statement audit. A financial statement

audit is a snapshot of the financial picture of an organization at a point in time. In an audit, the auditor

obtains reasonable assurance whether the financial statements are free of material misstatement, examines

evidence supporting the financial statements, and assesses both accounting principles used and overall

finahcial statement presentation, The auditor then renders an opinion on whether the financial statements

are presented fairly in conformity with generally accepted accounting principles.

This engagement, an agreed-upon procedures engagement, is defined as one in which we perform specific

prodedures and report findings. We did not perform an audit or provide an opinion relating to the subject

matter or assertion about the subject matter. Rather, we performed only those procedures that have been

agreed upon with management and report findings. These procedures often are at a more detailed level

than is customary in a financial statement audit.

General

Information

On April 22, 2014, the BOC passed a resolution by the governing authority of DeKalO County, Georgia

directing the Executive Assistant to obtain the services of a Certified Internal Audi~or or a Certified

Government Audit professional to:

1. Review the expenditures for the past ten years (2004 through 2014) by each me~ber of the Boa d

of Commissioners, his/her respective staff and office, and the central office of the Board f

Commissioners. I I

2. The auditor shall review expenditures to consider (a) whether purchases were for appropriate

material goods by a Commissioner in the normal functioning of a Commissioner office; (b)

whether there is evidence of a valid work product when a service is purchased; and (c) what

evidence exists that meals and travel expenses were for County business.

The review was conducted in accordance with the following DeKalb County policies in effect during the

I

projcledural scope period, 2004 to 2014: Purchasing Card Policy, March 2004; Mobile Policy; Tra~el

Policy; and the Retention Policy as required by the Georgia Records Act (O,C.G,A 50-18-90 et seq.),

whose revised schedules were filed with the Division of Archives and History, Office of Secretary of

State, as ofJuly 30, 2010.

Pllrc~zase Card Policy

I

The 2.004 Purchase Card Policy states that DeKalb County has established a Purchasing Card (P-Card)

program that allows designated employees the ability to purchase selected, business-related goods and

services whose value is less than $1,000. This program is intended to be an alternative method for the

purchase of small dollar, miscellaneous expense materials and services. These policies and procedures

ap~IYto the use of the Bank of America Visa Purchasing CardlP-Card.

DeKalb County is exempt from paying State of Georgia sales tax. This infers that DeKalb County staff

may need to provide written documentation to vendors and service providers for recognition of the

eXlmpt status on procured services and purchases.


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peKalb' County Board of Commissioners Purchase Card Review

'District 7

Non P-Card Expense Review

'We Ireviewed vendor payment activity for accounts where the percentage of P-Card expenditures in

relation to the accounts payable transactions' was relatively small as shown in Fig. 2, P-Card

Expenditures as Percentage of Annual Account Total. This review was targeted on the following

accounts:

e

Other Professional Services

Other Miscellaneous Charges

e

Travel-Airfare

i

Travel-Accommodations/Hotel and, Training and Conference Fees

We identified seJect vendors with high payment activity and reviewed supporting documentation to assess

if e*penditures were for County business and to the extent possible, actual service or product was

received by the County.

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De o County Board of Commissioners

Purchase

.d Review

L .:t7

Review Results.for.District 7

Di stri ct 7

20042014

P-(ard Total

$

5,390.25

s

4,439.84

$

3,003.80

s

6,147.49

$

552.54

$

8,054.46

s

2,194.68

s

1,337.64

$

9,813.80

s

1,337.64

$

15,243.38

$

212.00

$

209.42

57,936.94

2004

2005

2006

2007 2008

2009

2010 2011

2012 2013

2014

P-Card

P-tard P-Card p,Card P-Card

P-tard

P-Card

P-Card P-Card

P-Card

P-Card

$ -

$ $ - $

$

$

-

$

11.25

$

3,343.00

s

2,036.00

s

-

s

$

$

857.03

$

983.72

$ 1,737.25

$

861.84

$

$

$ $ $ $ $

$

296.11

$ 1,091.82

$

1,615.87

$

s

$ $ $ $ $

$

2,422.59

$

317.60

s

2,577.30

$

830.00

$ $

s

$

- $ $ $

-

$

539.54

$

13.00

$

$

-

$

$ $

s $ $

3,654.13

$ 281.51

$

3,063.27

s

1,055.55

$

$

$

$

$ $ $ $

1,717.49

s

-

s

477.19

$

$ $ $

$

-

$

$ $

$

425.13

$

198.26

$ 615.25 $ 99.00

$

$

s

s

$

$ $ $

1,600.80

$

2,574.00

$

3,419.00

$

2,220.00

$

$

-

$ $

145.82.

$

$

$

193.95

$

20.41

$

127.98

$

786.75

$

62.73

$

s

$

827.16

s

1,911.63

$

1,932.26

$

704.16

$

1,325.77

$

587.80

$

2,350.95

4,448.59

$

1,155.06

$ $

-

s

$ $ $

$ $ $ - $

$

212.00

$

s

- $

$

$ $ $ $

s

109.42

s

100.00

$

$

.

827.16

2,057.45

$

1,932.26

$

704.16

$

1,519.72

$

11,836.17

$

7,252.55

21,659.42

$

10,148.05

Exp e n se A cc ou n t

Other Profess ional Services

ther Telecommuncation Services

Printing Services

rravel.

irfare

Travel Car Rental

Travel Accomodations/Hotel

Travel- Per Diem

Travel- Miscell aneous

Training and C on f erence Fee External


Operating Supplies

Food and Groceries

_~


11/16

D,

b Co un ty B oard o f Co mmis si on ers

Purchase

.d Review

Dis~,.ct

7

District 7 2004-2014 2004

2005

2006

2007

P-Card ount P-Card % o f P-Card

P-'CardY-'cf

P-Card ount

~of

P-Card

ount

P-Card %

o f _

Expense Account

P-Card Total Spend

Total

'5

end

T';~I

Send Total

Send

Total Total


5,390.25

$

0% $

$

$15,913.44

0%

... . .

-. . .

,.

;(439:84 .

$

$ $

$

O th er Te le co mm un ca ti on S er vi ce s

0%

nja

0

$

nja

Printi,ng S~rv~~es

3,003.80

$

n/a

$

3,621.77

$

0%

$

$

693.00

0

, '0

T r av e J A i r fa r e

6,147:49

$

n a

S

nja

$

n/a

$

n a

T ra ve l - C ar R en t al

5 5 2 . 5 4

s

n/a

s

n/a

$

n/a $

$

n a

Trav.e.1-Accomodati oris/Hotel

8,054.46

s

nfa

S

n/a $

n/a

s

$ n a

Travel - Per Diem

2,194.68

$

n a

$

nja

$

n a

$ s

n a

T r a ve l ~M i s c ellaneous

.1,337.64

$

n a $

n/a

$ n a $ $ n/a

. . ..

9,813.80

$

$

$

$ $

l_ainin~.-,,~< c:onfe r~-


12/16

D...

.;jlbCounty Board of Commissioners

District 7

Expense Account


Other Telecomrrruncation Services

Printl ng Se rvices

Travel ~ Airfare

Travet- Car Rental

Travel- Accornodations/Hote l

Travel Per Diem

Trave

l- Miscellaneous

Trainin~ andConterence F~e: External

Other. Miscellaneous Char:g_es

Operating Supplies

Food and Groceries

Books and Subscriptions

PCard Total . ..

s . 5,390.25

s 4,439:~84

s 3,003:80

s

6:147.49

s .

5~2:S4

s '8,054.46

$ '2,1~~:iJ.8 .

$ i,337,,64

. s

,'9,81 .3:00

$ .

:'1,337:64

$ :. 15:243,38

. ~ '~ 6 ~ :~ '

Grand Total

$ 57,936:94

Purchase

_d rd

Review

D i s crict 7

..

-

2012

2013

2014

P-Card Account PCard % of PCard

J\~co~:~~,

.P-card %'of

P-Card

Account

P-Card % of

..

Spend

.T6tal ..:,

:T~i .il '.'

pend

Total

Total

Spend . Total

Total

$

-

$13,150.00

0 $

3,343.00 $21,553.00

16% $ 2 ,036.00 $14,701.00

14%

s

983.72

$

983.72 100%

$

1,737.25

$

1,737.25

100/0

s

861.84

$

920.91

94

$ 296.11

$ 3,387.79

9

1,091.82

s

2,657.35

41%

$

1,615.87 $ 2,407.67

67%

$

317 ..60

$

317.60

100 $ 2,577.30

$

2,577.30

100%

$

830.00

S

830.00

100%

$

13.00

$

13.00

100% $

$ n/a $

$

n/a

$

281.51

s

281.51

1 0 0 1 0

$

3,063.27

$

3,063.27

100%

$

1,055.55.

$

1,084.94 97%

$ -

S

n/a

$

477.19

S

477.19

100%

s

$

- na

S

198.26

$

198.26

IDO l.

$

615.25

s

615.25 100%

$

99.00

$

154.01

64%

$2 ,574.00

S

2,574.00

1D O 10

$

3,419.00

$

3,419.00

100%

$

2,220.00

$

2,570.00

86%

$

127.98

$

127.98

100 10

$

786.75

$

1,285.80 61%

$

62.73

$

117.65

53%

$2 ,350.95 $

2,500.95 94%

$

4,448.59

$

7,103.28

63%

$

1,155.06 $ 1,799.68 64%

s

$

- n a

$

-

$

n/a

$

212.00

$

n a

$

109.42

$

109.42

10 0 1 0

$

100.00

S

100.00

l D O Io

s

$

n/a

s

7,252.55

$23,644.23

31%

$21,659.42 $44,588.69

49% $10,148.05 $24,585.86 41%

Fig, 2 - Pi-Card Expenditures as Percentage oj Annual Account Total

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DeKalb County Board of Commissioners Purchase Card Review

District 7

IDistrict Metrics and Breakdown ofP-Card Spend for 2004 through 2014 - By Individual

District 7

Total P-Card Total P-Card

%of

%

Transactions

%of

Spend 2004thru

Transactions

Breakdown

by

District Personnel

2004thru 2014

District

201,.

District

w/Receipts .

S. Watson - Commissioner

259

67%

$

45,6~9.31.

79%

78%

K Lajoie

46 12%

$

5,206.88. 9%

80%

Current Administration Totals

3 05

.50,896.19

78%

C. Stokes - Fonner Commissioner* **

21% 7,040.75

12%

0%

I

Totals

3 8 9

57 ;936.94

I

***Note: For individuals for whom no documentation was available through the current district

administration due to retirement or having been under a prior administration, we attempted to contact

them via mail to inquire of documentation availability. At the time of report release, no further

docuementation was obtained or made available.

S. Watson Total

%of

Spend


5,379.00

12%

Other Telecommunication Services

4,439.84

10%

Printing Services

1,705.73

4%

Travel- Airfare

$

6,147.49

13%

Travel - Car Rental

552.54

1%

Travel - Accomodations / Hotel

8,054.46 18%

Travel - Per Diem

2,194.68

5%

Travel- Miscellaneous

1,337.64

3%

Training and Conference Fee -External

9,813.80 21%


869.89

2%

Op erating Supplies

4,984.82

11%

Books and Subscriptions

209.42

0%

Total

45,689.31

General Observations

Combissioner Watson's P-Card activity represented 79% of the overall District expenditures while

accoi nting for 67% of the transactions. The highest concentration of spending, $18,286.81 was in the five

categories of Travel, Training and Conferences Fee - External, Other Professional Services, Other

Telecommunication Services and Operating Supplies.

Ex~ended Review Details

O u r

review of the Operating Supplies account revealed an additional $2,175 in travel related expenses

that was improperly coded. We noted $9,806.35 or 31% of transactions without accompanying receipts.

Based on observed vendors, transactions lacking invoices appeared to have a County business purpose,

however, the lack of accompanying receipts limited the provision of reasonable assurance.

1 2 1 1

P

age


14/16

I DeKalb County Board of Commissioners-Purchase Card Review

District 7.

Potih and Procedures Compliance

Supporting receipts were missing from substantially all of the months reviewed. Therefore, a substantial

number of other expenditures not supported by appropriate documentation could not be asserted as

County business expenses.

C. Stokes

Total

%of

1

Spend

Other M iscell ane ous Charges

339.77

5%

Operating Supplies

6,700.98

95%

Total

7,040.75

General Observations

Former Commissioner Stokes's P-Card activity represented 21% of the overall District expenditures

while also accounting for 12% of the transactions. The concentration of her P-Card expenditures was

categorized as Operating Supplies. Based on observed vendors, transactions lacking invoices appeared to

have a County business purpose; however, lack of accompanying receipts limited the provision of

reasonable assurance.

K laJoie

Total

%of

Spend

O th er Professio nal Serv ic es

$

11.25

0%

Prin ting Ser vices

$

1,298.07

25%

Othe r Miscel laneous Charges

$ 127.98

2%

Op era ting Sup pl ies

$

3,557.58

68%

Food and Groce ries

212.00

4%

Total

5,206.88

G~neralObservations

Employee K. Lajoie's P-Card activity represented 12% of the overall District expenditures while also

accounting for 9% ofthe transactions. The expenditures were primarily for office supporting supplies and

printing services.

Extended Review Details

A card holder from 2011 to present, we noted transactions totaling $1,303.86, or 20% of transactions

without accompanying receipts. Of these 9 transactions we noted they are primarily composed of office

supplies. Based on observed vendors, transactions lacking invoices appeared to have a County business

p~rpose, however, the lack of accompanying receipts limited the provision of reasonable assurance.

13IPage

I


15/16


16/16

I I

DeKalb County Board of CO-rYllnissionersPurchase Ca rd Review

District 7

Comments for Each Vendor

Ba1k of America NA

II

Amount is for total payments to Bank of America for Purchase Card expenditures during the

scope period.

I

P rofessional pr inting and m ailing services were provided by AADCO Printing an d Mail in g f r o b

December 2008 through December 2009. We reviewed the December 2009 invoice for $20,l42

with a description of services including Printing and mailing for District 7 Year-end Report,

i

postage and newsletters.

OJ) ce Depot Inc.

Office supplies were purchased with Office Depot from December 2004 - April 2014. Total

vendor invoice payment activity was $18,304. The supply invoice activity ranged from $1 -

$1,046. Supply expenses are customary for County operations.

Wallace Graphic Inc.

Atlanta Mailing

&

Fulfil lment Inc.

I -

f) The invoice for this expense item Iwas subject to the 5-year retention policy and was remov d

from records; no invoice was available for review.

< l > The invoice for this expense item Iwas subject to the 5-year retention policy and was remOVld

from records; no invoice was availa~le for review.

Decatur Travel Agency

o

The invoice for this expense item was subject to the 5-year retention policy and was removed

from records; no invoice was available for review.

Dell Marketing LP

I l Computer equipment was procured with Dell Marketing from June 2004 - February 2011. Total

vendor invoice payment activity was $11,084. The vendor invoice activity ranged from $110-

$3,604. We reviewed an April 2009 invoice for pc equipment purchased and installed for County

staff.

Dertur Atlanta Printing

~ Printing services were provided by Decatur Atlanta Printing from March 2006 - October 2013.

Total vendor payment activity was $8,849. The vendor invoice activity reflected a range from $12

- $750 which appears reasonable for the scope of services provided.

Broadway Consulting Group

I . Community development services were provided by the Broadway Consulting Group during

April 2011 through April 2014 totaling $7,825. We reviewed two invoices with service

descriptions of July 2013 and March 2014 Community Work for District 7, and community

consulting fee

JJ

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DeKalb County P-Card Audit: Commissioner Stan Watson

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