Internal Controls Surrounding P-Cards and Credit Cards

Due to their inherent nature, P-cards and credit cards have a higher risk for fraud and abuse. Consider these controls to help reduce the risks within your entity:

  • Limit distribution of cards to a few select individuals.
  • Ensure individuals know the policies for purchases on cards. Consider obtaining employees’ signed acknowledgment of the policies and procedures.
  • Consider putting some limitations in place:
    • Limit the number of transactions allowed each month.
    • Limit the amount of purchases that can be made.
    • Disallow purchase of gift cards.
    • Disallow use of card by policy offenders.
    • If higher spending limits are available, require written requests/approvals.
  • Obtain the original, itemized receipt for all purchases.
  • Ensure those individuals reviewing purchases made on cards:
    • Appropriate in rank.
    • Scrutinize the purchases made.
    • Follow-through on questioning users, if necessary.
    • Review it in a timely manner.
  • All transactions should be reviewed and approved:
    • Date/Time – appropriate for purpose of purchase?
    • Were items purchased appropriate per policies and applicable legal provisions?
  • Perform periodic review of all card activity focusing on payments per vendor, types of vendors utilized, documentation of reviews, accessibility of supporting documentation.
  • Providing periodic training for users and reviewers.
  • Consider proper segregation of duties surrounding these types of purchases:
    • Who are the individuals making the purchases, performing the reviews, recording the purchase in the accounting records and reconciling the books?
    • Proper segregation of duties would have a different individual in each role.

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