What do the Auditors Want

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What do the Auditors Want?

• By Trena Barnett, CPPO, CTPM

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What comes to mind

• Risk
• Intimidation
• Insecurity
• Doubt
• How am I going to respond and still do my job?

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Perspectives

• Opportunity
• Reward

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To Understand Audits

• Types of Audit
• Random (selection just luck)
• Target (possibility of improper purchasing
  exists)
• Special
• External (State Auditor, TBPC, Comptroller)
• Internal

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The Pieces of a Random Audit

• Select Records / Transactions
• Initial Request Letter
• Review Verify Information
• Initial Findings Letter
• Meeting / Request Corrective Action Plan
• Final Report

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Selection

• Obtain access to Records/Transactions
• Eliminate (target audits, construction, etc.)
• Randomize
• Texas State Auditor Office, statistical toolbar
• old fashion sampling

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Initial Letter

• Send an Initial Request Letter to each purchaser
  with request for any additional information

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Dear Purchaser Our agency is conducting an audit
of random purchase orders. The following purchase
order(s) reflect your name as the last approver
and is included in the audit of MONTH through
MONTH YEAR.
Please mail or fax a copy of supporting
documentation associated to the purchase order(s)
that is not clearly defined in IFS to the fax
number listed below. Please do not send
originals. If your purchase order does not
require additional information, please reply from
this e-mail. If your documentation consists of
more than 20 pages, please do not fax, mail
instead to Texas Parks Wildlife Dept.
HUB/Purchasing Property Audit 4200 Smith School
Road Austin, TX 78744 Fax [phone] The
requested documentation should be in my office
within 5 business days (DATE). If you have any
questions, please contact me by e-mail at
Auditors name_at_TPWD.state.tx.us or by telephone
at (512)389-. Sincerely, Name of Auditor,
Purchasing Auditor
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• Checklist
• Items reviewed
• Weighted?
• Explanation / Source

Review
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Dear Purchaser Congratulations! The purchase
order(s) was/were found to be 'error free' with
state purchasing statutes, rules, policies, and
procedures as well as with existing Texas Parks
Wildlife Department purchasing procedures. On
behalf of the agency, thank you for your
cooperation with this audit. If you have any
questions, please contact me by e-mail at
auditor_at_TPWD.state.tx.us or by telephone at
(512)389-. On behalf of the agency, thank
you for your exceptional efforts! Sincerely, Name
of Auditor, Purchasing Auditor
Initial Findings
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Dear Purchaser The compliance verification of
random purchase orders has been completed. The
following purchase order(s) were included in the
audit of MONTH through MONTH YEAR.
Meeting / Corrective
Initial Findings
The purchase order was found to be non-compliant
with state purchasing statutes, rules, policies,
and procedures and/or with existing Texas Parks
and Wildlife Department purchasing procedures.
Please note the following reasons
below. XXXXXX Type of Error Found-statement
explaining what error appears to be in error.
General statement explaining why we verify the
information that appears to be in error. Please
provide within 7 calendar days of receipt what
corrective action will be implemented to prevent
this error(s) from occurring in the future. Your
response must reference the purchase order number
and the audit period. It may be mailed, e-mailed,
or faxed to the attention of Connie Knesek,
Purchasing Audit, at the following address/fax
number Texas Parks Wildlife Dept.
HUB/Purchasing Property Audit 4200 Smith School
Road Austin, TX 78744 Fax [phone] On
behalf of the agency, thank you for your
cooperation with this audit. If you have any
questions, please contact me by e-mail at
name_at_TPWD.state.tx.us or by telephone at
(512)389-. Sincerely, Name of Auditor,
Purchasing Auditor
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Purchase Order Random Sample Summary
Final Report
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Frequently Asked Questions

• In regards to Comptroller object codes, how do I
  know when to code a purchase as a commodity or as
  a service?
• Labor plus parts is coded as a service. When
  purchasing parts only (no type of service
  involved), the purchase is coded as a commodity.
  A service may include labor and parts (ex.
  transmission repair). Commodities may consist of
  parts, materials, supplies, etc. When it comes to
  coding purchases with Comptroller object codes,
  think of what is actually being purchased as
  opposed to how the item will be used.
• Example
• A cardholder purchases a fan belt for a
  vehicle. The cardholder installs the fan belt
  (also known as performing the work "in house").
  Although the fan belt's purpose is for the
  maintenance of the vehicle, the cardholder only
  purchased a fan belt and should code the purchase
  as a commodity. If the cardholder purchased a fan
  belt from a vendor and paid the vendor to have
  the fan belt installed in the patrol vehicle, the
  cardholder purchased labor and parts (fan belt)
  and should code the purchase as a service.

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Frequently Asked Questions

• In regards to Comptroller object codes, when do I
  code a purchase a 1302860 (freight delivery
  services or shipping handling charges)?
• If you make a purchase that includes
  shipping/handling or freight/delivery, code the
  shipping/handling or freight/delivery charge to
  the same object code as the item purchased.
• Example
• If you purchased boxes from ACME Box and the
  vendor charged a 10.00 freight fee, then you
  would code the boxes as 1303340, and the freight
  charge as 1303340. If you're not creating a
  separate line item for shipping/handling or
  freight/delivery, just list the charge in your
  description with the dollar amount of the charge.
  For example, the description would be 100 boxes
  for Operation Honcho and a freight charge of
  10.00.
• If you are actually purchasing shipping/handling
  or freight/delivery services from FedEx, UPS,
  Central Freight, etc. and they are the vendor you
  are paying directly, that's when you want to use
  1302860. For example, if you are shipping a boxes
  to headquarters via UPS (and UPS is being paid
  directly), then you would code as 1302860 Freight
  Delivery Services.

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Frequently Asked Questions

• The receipt I received from the vendor is not
  readable. What should I do?
• Ask the vendor for a readable (legible) receipt.
  Explain to the vendor that your receipts are
  audited. Remember, if you cant read the receipt,
  the auditor wont be able to read it either.

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Perspectives

• Opportunity
• To learn
• To teach
• Reward
• Job performance
• Recognition

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The Answer to All Questions

• DOCUMENTATION !

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