While much attention is paid to big-ticket procurements that go askew, it’s important to pay attention to the small purchases as that can add up to the potential for significant financial risk.  

A hard-hitting November performance audit of Salt Lake County’s small purchases took a look in this corner of state purchasing and uncovered a variety of management problems, including a lack of accountability, insufficiently enforced policy, and documentation shortcomings.

While the audit found no evidence of misuse of funds, it determined that “internal controls such as management oversight, documented policies and procedures, ongoing training and monitoring were not always adequate to prevent or detect misuse.” Among the potential problems that the audit covered included: 

• Improper gift card purchases for employees and volunteers

• Inadequate gift card management

• Inadequate training and oversight of the Amazon Business Account

• Purchases shipped to non-county facilities

• Terminated employees still appearing on purchasing access lists

• Lack of inventory tracking of controlled asset purchases (those that cost $100 or more.)

The topic of inadequate gift card management was rated a “significant financial risk.” Although the value of the individual cards is small, the audit found concerns with inventory maintenance, overly large quantities of undistributed gift cards (particularly by the Health Department), and examples cited of poor record keeping with illegible recipient signatures, missing card numbers and reasons for distribution missing. 

The lack of good processes to control and document gift card use presents risks that have been cited in other entities as well. For example, the state auditor in Minnesota noted in 2023 that “Internal control issues arise because the cash equivalent nature of gift cards can make their handling, dissemination and use difficult to trace increasing the opportunity for theft and misuse.”  A July audit of gift card use in the Treasurer’s office in Fulton County, Georgia also identified several findings that called for “immediate attention of management.

A key theme that runs through the Salt Lake County audit focuses on the need for better training so that staff and managers understand the importance of documenting how procurement cards, in general, are used and the importance of providing explanations for unusual circumstances – such as why it might be necessary to have items purchased for the county delivered to non-county addresses (for example, in the case of someone who is working remotely).

Training issues are also cited in the discussion of the Amazon Business Account. Once again, the problems involve small amounts – such as a $74 item purchased for work, but with the cost reimbursed as a store credit rather than reimbursed to a Salt Lake County procurement card. 

Another issue concerned agency use of non-county purchasing cards to access the Amazon Business Account – a practice that the central Contracts and Procurement office was not aware of and stated it wouldn’t approve.

A question also arose in the audit about the lack of use that agency group administrators made of customized reports and account analytics regarding the Amazon account – a problem that was pinned to a lack of additional training since 2020. While a PowerPoint was available from the central office, the audit noted that the link to that source of information was broken during the audit period, which contributed that even training that had been prepared was not available for a good stretch of time. (It has now been fixed). 

#StateandLocalGovernmentManagement #StateandLocalPerformanceAudit #StateandLocalProcurementManagement #CountyProcurementPerformance #CountyGovernmentGiftCardUse #SaltLakeCountyAuditor #ProcurementPerformanceAudit #StateandLocalAgencyProcurementTraining #StateandLocalGovernmentAccountability #StateandLocalPurchasingAccountability #ImroperGovernmentGiftCardUse #GovernmentGiftCardManagement #InsufficientGovernmentPolicyEnforcement #StateandLocalGovernmentOversight #StateandLocalPublicAdministration #CountyPublicAdministration #ProcurementCardPerformanceAudit #CommonGovernmentInternalControlFinding #StateandLocalInventoryControl #StateandLocalGovernmentDocumentation   #StateandLocalGovernmentData