SUBMITTAL TO THE BOARD OF SUPERVISORS COUNTY OF RIVERSIDE, STATE OF CALIFORNIA

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SUBMITTAL TO THE BOARD OF SUPERVISORS COUNTY OF RIVERSIDE, STATE OF CALIFORNIA ITEM 2.3 (ID # 3264) MEETING DATE: Tuesday, January 24, 2017 FROM :.AUDITOR CONTROLLER: SUBJECT: AUDITOR-CONTROLLER: Internal
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SUBMITTAL TO THE BOARD OF SUPERVISORS COUNTY OF RIVERSIDE, STATE OF CALIFORNIA ITEM 2.3 (ID # 3264) MEETING DATE: Tuesday, January 24, 2017 FROM :.AUDITOR CONTROLLER: SUBJECT: AUDITOR-CONTROLLER: Internal Audit Report : Riverside County EXECUTIVE OFFICE, Countywide Purchase Order Process [District: All]; [$0] RECOMMENDED MOTION: That the Board of Supervisors: 1. Receive and file Internal Audit Report : Riverside County Executive Office, Countywide Purchase Order Process ACTION: Consent BACKGROUND: Summary We have completed an audit of the Riverside County Executive Office to provide management and the Board of Supervisors with an independent assessment of internal controls over the purchase order process. We conducted the audit from May 18, 2016, through June 23, 2016, for operations from July 1, 2013, through April 30, Based upon the results of our audit, we identified opportunities for improvement of internal controls relating to timely processing and type coding of purchase orders. We determined that the internal controls over these areas did not provide reasonable assurance that its objectives related to these areas will be achieved. Reasonable assurance recognizes internal controls have inherent limitations, including cost, mistakes, and intentional efforts to bypass internal controls. We will follow-up to determine if actions were taken to correct the findings noted. FINANCIAL DATA Current Fiscal Year: Next Fiscal Year: Total Cost: Ongoing Cost COST $ 0 $ 0 $ 0 $ 0 NET COUNTY COST $ 0 $ 0 $ 0 $ 0 SOURCE OF FUNDS: N/A Budget Adjustment: No SUBMITTAL TO THE BOARD OF SUPERVISORS COUNTY OF RIVERSIDE, STATE OF CALIFORNIA C.E.O. RECOMMENDATION: [CEO use] For Fiscal Year: N/A Impact on Residents and Businesses Provide an assessment of internal controls over the audited areas. SUPPLEMENTAL: Additional Fiscal Information N/A ATTACHMENT A. Riverside County Auditor-Controller Internal Audit Report : Executive Office, Countywide Purchase Order Process Riverside County Page 2 of 2 ITEM 2.3 (ID # 3264) Internal Audit Report : Riverside County Executive Office, Countywide Purchase Order Process Finding 1: Timely Issuance of Purchase Orders Purchase orders were not processed in a timely manner. Our review of 110 purchase orders disclosed that seven (6%) totaling $28,035 were processed after invoices were received from vendors. Purchase orders were for the county portion of janitorial services performed for the Riverside County Superior Court (Courts). This occurred because procedures were not in place to establish the purchase orders prior to receipt of the invoices. The Executive Office maintains a copy of the Court s janitorial agreement that can be used to prepare purchase orders prior to receiving the service. Per Riverside County Purchasing Manual, goods or services over $400 require a purchase order. This noncompliance with purchasing requirements could result in paying for unauthorized or inappropriate products and services. Recommendation 1 Revise the purchase order process to include using the Courts janitorial agreement to process purchase orders prior to receiving the service. Management s Response Partially Concur. The Courts perform the RFP and selection of the vendor for janitorial services in the Courts. Since the County has facilities within the Court, the same vendor performs the services and invoices the County. Since this was not of a countywide contract negotiated by County Purchasing, the invoices were paid individually. Executive Office will work with the Courts to predetermine the costs for the year and issue the Purchase Order accordingly. Estimated Date of Corrective Action: November 15, Finding 2: Coding of Purchase Order Purchase order type codes were inaccurately recorded. Our review of 110 purchase orders disclosed 83 (75%) contained inaccurate purchase order type codes. Procedures are currently not in place to verify the purchase order type code prior to approval. The Riverside County Purchasing Manual requires a different purchase order types for different dollar thresholds. This noncompliance with purchasing requirements could result in purchase requests improperly approved which, may result in purchasing unauthorized or inappropriate products and services. Recommendation 2 Revise the purchase order process to include verification of purchase order type codes prior to approval of a purchase order. Page 7
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