0 Fall

Oklahoma School of Science

and Mathematics Purchase Card Audit

Audit and Internal Investigations Report Released May 6th, 2015

Audit Performed by

JoRay McCoy, Audit Director Ashley Kurien, Auditor

Oklahoma School of Science and Mathematics | SEPT. 1, 2013-DEC. 17, 2014 2

TABLE OF CONTENTS

AUDIT CONCLUSION ............................................................................................................................ 3

AUDIT FINDING SUMMARY ............................................................................................................... 3

AUDIT OVERVIEW ................................................................................................................................ 3

DETAILED FINDINGS ........................................................................................................................... 4

APPENDIX ............................................................................................................................................... 5 Methodology .......................................................................................................................................................... 5 Sampling ................................................................................................................................................................. 5 Executive Summary ............................................................................................................................................. 6 Agency Information ............................................................................................................................................ 6 Key Staff ................................................................................................................................................................... 7

TRANSMITTAL LETTER ..................................................................................................................... 8

This publication is issued by the Office of Management and Enterprise Services as authorized by Title 62, Section 34. Copies have not been printed but are available through the agency website. This work is licensed under a Creative Attribution-Noncommercial-NoDerivs 3.0 Unported License.

Oklahoma School of Science and Mathematics | SEPT. 1, 2013-DEC. 17, 2014 3

AUDIT CONCLUSION Based on our audit, we have determined the Oklahoma School of Science and Mathematics (OSSM) has significantly complied with the following audit objectives: • Determine if the agency has implemented internal controls and if the agency’s

controls are operating effectively in relation to the Purchase Card Program; and

• Determine if the agency’s Purchase Card Program is in compliance with Oklahoma State Purchase Card Procedures and approved internal purchasing procedures as they relate to the acquisition process through the use of purchase cards.

AUDIT FINDING SUMMARY (Error rates are based on transactions reviewed.)

FINDING 14-629-01: We reviewed 11 transactions to verify if proof of delivery was obtained for purchase. There were five transactions in which a packing slip was not obtained to confirm proof of delivery.

AUDIT OVERVIEW This audit was performed pursuant to 74 O.S. §85.5.E. and the State of Oklahoma Purchase Card Procedures. Our audit was to determine if the agency’s Purchase Card Program for the period of Sept. 1, 2013 through Dec. 17, 2014 complied with the audit objectives. As of Sept. 1, 2013, there were three purchase card holders and two approving officials in the agency. In total, the agency had $214,587.29 in purchase card spend during the audit period. The agency’s Purchase Card Program has remained a significantly small portion of their spending. The following chart depicts the expenditures by purchase card compared to voucher or wire transfer for operational cost made by the agency during the audit period.

Purchase Card 6%

($214,587.29)

Voucher and Wire Transfer

94% ($3,582,064.46)

Agency Expenditures

Oklahoma School of Science and Mathematics | SEPT. 1, 2013-DEC. 17, 2014 4

DETAILED FINDINGS Finding 14-629-01: Cardholder Responsibilities — Receiving Documentation Condition: We reviewed 11 transactions to verify if proof of delivery was obtained for purchase. There were five transactions in which a packing slip was not obtained to confirm proof of delivery. Effect or Potential Effect: There is no verification that goods shipped were actually received by the agency. Cause: The agency was not diligent about obtaining receiving documentation. Criteria: State of Oklahoma Purchase Card Procedures §6.11 Receiving Goods and Services states in part:

6.11.2 Products shipped — A packing slip or proof of delivery obtained from carrier’s website must be obtained.

Recommendation: We recommend the agency review its process for obtaining packing slips by the cardholder to properly confirm the product was received. In addition, we recommend the agency inform the receiving employees to forward packing slips to the cardholder. Management’s Response Date: 3/17/15 Respondent: Vice President for Administrative Services Response: Concur — We have reviewed our process for obtaining packing slips. Employees have been reminded that proper acknowledgment of receipt is required and that all packing slips are to forwarded to the cardholder. Corrective Action Plan Anticipated Completion Date: March 17, 2015 Corrective Action Planned: Agency-wide email restating the requirement for proper acknowledgement of receipt for items received and the requirement to forward all packing slips to the finance department.

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APPENDIX

Methodology • Interviews were conducted with the agency’s staff members.

• Internal controls over the Purchase Card Program were documented and evaluated.

• A statistical sample of transactions from cardholders was examined.

• Overall program compliance with the State of Oklahoma Purchase Card Procedures

and rules promulgated thereto was evaluated.

Sampling The population for substantive testwork was 302 transactions totaling $214,587.29. We used a classical random record sampling process to extract a random sample of transactions below the $5,000 threshold. In addition, seven transactions were selected at the auditor’s discretion and tested against selected attributes. We tested 100 percent of the transactions in the greater than $5,000 category.

Transactions Amount Total Expenditures 302 $214,587.29

Negative Transactions (1) $116.67

Filtered Population 301 $214,703.96

Subpopulation Under $5,000 295 $162,795.27

Greater than $5,000 6 $51,908.69

Total 301 $214,703.96

Samples Under $5,000 31 $49,998.54

Greater than $5,000 6 $51,908.69 Auditor’s Discretion 7 $1,381.63

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Executive Summary Organization Mission Statement: To foster the educational development of Oklahoma high school students who are academically talented in science and mathematics and who show promise of exceptional development through participation in a residential educational setting emphasizing instruction in the field of science and mathematics; and to assist in the improvement of science and mathematics education for the state by developing, evaluating and disseminating instructional programs and resources to all schools and students of the state. History and Overview: The Oklahoma School of Science and Mathematics (OSSM) was created through legislative action in 1983 and graduated its first class of 44 seniors from across the state in 1992. It is designed as a two-year residential public high school for academically gifted students in mathematics and science. The dormitory accommodates 144 students, or approximately 72 juniors and 72 seniors. The dormitory is being expanded and will house an additional 144 students for a total of 288 students.

Agency Information The agency is made up of three classified and 60 unclassified employees according to the Oklahoma Agencies, Boards and Commissions Book as of Sept. 1, 2014. EX-OFFICIO MEMBERS Dr. Kelly Damphousse Dr. Kalpana Misra Glen D. Johnson Dr. Bret S. Danilowicz Mr. Mike Turpen The Honorable Joy Hofmeister Board of Trustees Mr. Dan Little, Chair Dr. David Drennan, Vice Chair Mary Ann Bauman, M.D. Dr. Kent Buchanan Mr. Jack Coffman Mr. Mason Cole Mrs. Talita DeNegri Kelley Dowd, Ph.D. The Honorable Jim Halligan Dr. Michael Jordan Dr. Lara D. Mashek Mr. Ron Mashore Mr. Steven Rhines

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Mr. Geoffrey Simpson Ms. Donna K. Windel

Key Staff Frank Y.H. Wang, Ph.D., President Lynn Morgan, B.B.A., Vice President for Administrative Services Shannon Gorbet, C.P.A., Controller

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TRANSMITTAL LETTER TO PRESIDENT FRANK Y.H. WANG, PH.D., AND BOARD MEMBERS OF OKLAHOMA SCHOOL OF SCIENCE AND MATHEMATICS With this letter, we transmit the report of the Oklahoma School of Science and Mathematics Purchase Card Program audit for the period Sept. 1, 2013-Dec. 17, 2014. We performed the audit to ensure the Oklahoma School of Science and Mathematics Purchase Card Program as administered by the Office of Management and Enterprise Services is compliant with laws and regulations. The accompanying report presents our findings and recommendations, as well as management’s responses and corrective action plans. This report is available to the public on the Office of Management and Enterprise Services' website, http://www.ok.gov/OSF/Audit/. Respectfully, Carol McFarland Director, Performance and Efficiency Division