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Presented by Yary Tafur

FLC Yokosuka PPMAP

July 12

PPMAP Reviews

Common Findings

The NAVSUP Enterprise

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Audit Process

The PPMAP Division performs On Site Reviews (OSR)

and Desk Audits (DA) of the following programs:

• Government-wide Commercial Purchase Card (GCPC

- Every 18 Months)

• Ordering Authority (every 18 Months)

• SAP Authority (Every Three Years).

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Audit Process

1. Citibank Reports

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Audit Process, cont

2. Determine the number of random samples

3. A random sample generator is used to identify the selected sample files to be reviewed.

4. Random Samples are received and audit based with NAVSUPINST 4200.82F

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Get Ready Set Go !!!

5. Then, 60 days prior to the last date of the cycle period, the PPMAP Analyst will send an Announcement Letter to the activity Commanding Officer (CO) or Senior Leadership.

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30 Days Your Activity will have 30 Days to provide

all the documentation required.

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Desk Audit or On Site Review

They consist of three different elements:

1. Transactional Review

2. Internal Management Review

3. Other Review Elements

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Critical elements Transactional Review:

1. Unsupported questionable items

2. Misuse of the purchase card

3. Abuse of the purchase card

4. Failure to use or justify non-use of mandatory sources

5. No Receipt

6. Lost File

7. Separation of Function

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Critical elements

Internal Management: 1. Span of Control.

2. Equitable Distribution of Business.

3. Semiannual Reviews.

4. Training.

5. Internal Operating Procedures (IOP).

6. Repeat Findings.

7. Separation of Duties.

8. Splitting Requirements.

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Critical elements

Internal Management: 9. Convenience Checks Program 10. APC, CH and AO, accountable official letters of

appointment and delegation

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Critical elements

Other Elements:

1. Dispute Process

2. Delinquencies

3. Corrective actions taken as a result of semiannual reviews

4. Accountability of personal property purchased with purchase card

5. Approval Process

6. Proper use of the increased purchase authority

7. Inactive Accounts

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Assigning a Rating

Satisfactory Rating

Or

Unsatisfactory Rating

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Folder # 1

• Copy of the Activity Internal Operational Procedure (IOP)

• Copies of semiannual reviews Billing cycles of :

20 Mar – 19 Sept & 20 Sept – 19 Mar

• Training Records (Copies of Training Certificates)

• Copies of all Warrants

• Copies of Letters of Appointment/Delegation

• DD 577

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Semi Annual Reviews

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Training Log

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• Inadequate training/lack of documented training for cardholders and approving officials

• Training is essential to ensure that employees have the skills to carry out their responsibilities.

• Purchase card training should be comprehensive to ensure all cardholders and approving officials are adequately trained.

• Records should indicate training taken, when taken, and, if appropriate, when refresher training is due.

Common Findings

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Warrants

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Warrants

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• Exceeding authorized purchase limits • Management should be aware of the charge limits of

their cardholders and monitor card use to ensure that cardholders do not exceed their assigned purchase level.

• Managers also should exercise extreme caution when increasing purchase levels for cardholders.

• Micro purchase - $3,000

Common Findings

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Delegation Letters

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Temporary Billing Cycle

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Rescission Letters

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DD577 Terminations

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Folder # 2

•Purchase Request

•Funding is available prior to purchase for each transaction

•Screening mandatory sources

•Purchase Log

•Cardholder Citibank Statement

•Receipt/Invoice

•Separation of Function

•AO validation of receipts

• Supported documentation

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30 Days PPMAP Team will have 30 Days to review

and complete the report.

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Purchase Log

At a minimum, the purchase log shall contain the following: 1. Date the item or service was ordered.

2. The merchant name.

3. The dollar amount of the transaction.

4. A description of the item or service ordered.

5. Date of receipt.

6. Name of individual receiving item or service.

7. Paid but not received (pay and confirm).

8. Credit received.

9. Disputed.

10. Mandatory sources screened.

11. Mandatory sources used/not used indicating

12. Maintained by cycle, not monthly, in order to reconcile with statement.

(1-16, 1-17)

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Purchase Log Samples

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Purchase Request Integrity

• Integrity of purchase request process

– Signatures for approval of purchase

– quantity matches receipt

– handwritten changes without documentation

• If requirement changes, you need to have documentation (email) for reduced quantities

• If the requirement increases, you need to cancelled that purchase request and obtain new approvals. (3-1)

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Purchase Request Integrity Sample

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• Inadequate review of purchase by approving officials.

• The approving official’s review is the most essential management element in the purchase card control system.

• The approving official is responsible for ensuring that all purchases made by the cardholder are appropriate and that the charges are accurate.

• Prior approval is required (or as required by IOP, dept head, HA, etc).

Common Findings

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• Abusive purchases/no documented need • Review purchases to determine whether they were for

appropriate government use, from designated government sources, or obtained at excessive cost. An example might be the purchase of flat screen monitors for between $800 and $2,500 when a regular 17-inch monitor is available from the GSA schedule for $300.

• Other examples are purchases of Palm Pilots with designer carrying cases and designer briefcases when there is no documented government need for such items.

Common Findings, cont

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• Sole-source purchases without appropriate documentation

• The FAR, 48 C.F.R. 13.106-3(b), requires solicitation of quotes or bids from a reasonable number of sources or, in lieu of that, sole source justifications for any purchase of more than $3,000.

• Failure to use required sources of supply • The FAR 8.002 requires agencies to acquire supplies

and services from designated sources, if those sources are capable of providing them.

Common Findings, cont

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Comptroller/ Funding

• Ensure proper and adequate funding is available prior to any purchase card action.

• Necessary Expense Rule :

– When you are faced with questions regarding whether you can or cannot purchase items, one general rule is the "Necessary Expense Rule." When applying the necessary expense rule, expenditures can be justified after meeting a three-part test. (2-1)

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Mandatory Screening Sample

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Separation of Functions

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Safeguarding

• The full account number shall not be transmitted by fax or email. If the purchase needs to occur using fax or email, note the form that the vendor should contact the CH by telephone. Account information may be transmitted via the following means:

• Over the counter

• Over the phone

• Internet, secure/encrypted site (command authorization required within delegation letter)

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Safeguarding

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Safeguarding

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Valid Receipts

• NAVSUPINST 4200.82D PCPN No. 12 – Proper and Valid Receipt Definition states: A receipt is “documentation from the merchant showing:

• the item(s) purchased,

• the unit price,

• the total amount,

• date of the transaction, and

• shipping/handling, and

• tax (as applicable).

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Receipts Samples

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Receipt Samples, cont

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Receipt Samples, cont

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Receipt Samples, cont

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Receipt Samples, cont

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Receipt Samples, cont

Not a receipt but a plastic bag for mailing purposes

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Receipt Samples, cont

Split shipment

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Receipt Samples, cont

Not a receipt,

no amount

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Receipt Samples, cont • Receipt Translation Japanese to English

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GCPC Thresholds

CONUS

• Up to $3,000.00 for Supplies

• Up to $2,500.00 for Services

• Up to $2,000.00 for Construction

• Purchases from USA vendors

OCONUS Up to $3,000.00 for Supplies, Services and Construction to

OCONUS Vendors

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AO Receipt Validation

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AO Receipt Validation

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AO Receipt Validation

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Satisfactory Rating

Satisfactory rating, the activity shall be required

to provide a response to the final report within

thirty (30) calendar days which shall include a

POA&M supporting the corrective actions to be

taken to address the findings and issues.

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Closeout

After POA&M review, PPMAP analyst can closeout the audit. Congratulation !!!!

In 18 months

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• As a result of an Unsatisfactory rating, the failed activity will be required to conduct a PPMAP stand-down.

• PPMAP analyst will schedule with activity to provide on-site support to review policies, procedures and processes.

• Activity shall provide a POA&M to the PPMAP analyst within fifteen (15) calendar days of the out brief date of the PPMAP detailing the corrective actions taken to correct the deficiencies noted in the report.

Unsatisfactory Rating

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Unsatisfactory Rating

• After the stand-down, the activity will be returned to full status with all accounts reopened by the PPMAP Office Director.

• FLCY – Spot Checks

• PPMAP analyst will conduct an on-site follow-up review within 180 calendar days of re-establishing the purchase card and AO accounts.

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