An audit of an Anchorage School District program that provides hundreds of employees with charge cards found while the district had made improvements to control purchases in recent years, people still continued to buy prohibited items — energy drinks in one instance, and gift cards in another.
"The good thing is, we did not find fur coats and diamond rings being bought, but we did find some questionable purchases," said Michael Chadwick, acting director of the Municipality of Anchorage's Internal Audit Department, which completed the audit at the request of the Anchorage School Board.
The audit was presented to Anchorage School Board members this week. It included a review of 335 purchases made from July 1, 2015, to March 31, 2016, using the charge cards, which the district refers to as procurement cards or "p-cards." During that time, there were more than 850 active p-cards in the district and more than 36,000 transactions processed, totaling about $7.6 million, according to the audit.
The p-cards, similar to credit cards, have a $2,500 single transaction limit. The district started using the cards in 2012 to streamline purchasing, said Jim Anderson, ASD's new chief financial officer.
Instead of having cash accounts or checkbooks distributed among schools, employees can use their cards to make smaller school-related purchases, including paying for anything from parking to copy machine toner cartridges, he said.
"It really runs the gamut," he said. "Everything to run your operation at a school could very well be charged to the p-card."
Employees are supposed to log their purchases online and turn in their receipts to a supervisor who approves the charges, Anderson said. An earlier audit of the p-card program in 2015 found instances of questionable and prohibited purchase, plus purchases that were never approved, concluding the program needed improvement.
Chadwick said Wednesday that overall, the district's controls over the p-cards had improved since 2015, but there was "still some room for improvement."
The most recent audit found five prohibited purchases, totaling $2,038 for gift cards, televisions valued over $500 and two personal purchases — $17 for energy drinks and $61 at a restaurant, said Chadwick.
It also found that of 335 reviewed purchases, 13 transactions didn't have proper documentation, such as original receipts or any receipts. It found 19 "questionable" purchases, totaling $4,032, that included food and gifts for staff. That total included $627 for mugs and $100 for ulu knives as staff appreciation gifts.
"You don't buy gifts with p-cards," Anderson said. He said food was only allowed under specific circumstances, including if an employee was traveling for work and had an allowance to spend on food each day.
He said all purchases made during the audit that were not authorized expenses were reimbursed by the cardholders.
The audit offered seven recommendations, including updating its procedures and suspending privileges for cardholders who purchased prohibited items. Anderson said ASD would clarify its rules and refine its p-card procedures.
Anderson said the audit was "fair and complete." He said the district would work with auditors to close the additional gaps in oversight.