U.S. Geological Survey Instructional Memorandum
No. APS 2004-11
Issuance Date: June 24, 2004
Expiration Date: June 23, 2005
Archive Date: October 24, 2008
Subject: Post-Entry Audit and Statistical Sampling Plan
Reference: This IM has been replaced by the Financial Operating Procedures Handbook Chapter 18 Remote Data Entry Review and Reporting.
Instructions: This Instructional Memorandum replaces No. OFM 99-02.
1. Purpose. This Instructional Memorandum (IM) revises procedures for statistical sampling under the Bank of America Charge Card Program for purchases and travel documents, and also for payments less than $25,000. The Office of Accounting and Financial Management (OAFM) initiated a statistical sampling process in fiscal year (FY) 1997 for a post-entry audit of accounting source documents entered in the Federal Financial System (FFS) under Remote Data Entry (RDE) procedures. The post-entry audit process is designed to provide assurance that bureau-wide financial controls are sufficient to guard against fraud, waste and misuse of resources, and that the FFS data integrity is maintained. An internal statistical sampling process is fundamental to our ability to demonstrate these controls. Managers will use the results of the statistical sample to make necessary improvements in the processes examined and to confirm that controls in place are operating effectively.
2. The Statistical Sampling Process. Documents will be statistically selected quarterly for audit of mathematical and administrative errors.
a) For payments and purchase orders less than $25,000, e-mail
notifications of audit will be sent to the end user (person who paid the invoice)
or other designated official requesting copies of documentation.
b) For Bankcard purchases, e-mail notifications of audit will be sent to the individual cardholder or other designated official requesting copies of the bankcard statement and backup documentation.
c) For travel vouchers, e-mail notifications of audit will be sent to the individual who created the travel voucher and/or approving official if known, or other designated official requesting copies of the documentation.
In addition to the individual notifications, a list of the selected samples will be e-mailed to the cost center Administrative Officers (AO)’s or other designated official.
The OAFM must receive the information within 3 working days of the request. Timely responses to OAFM requests are critical to the success of this process. Second requests will include e-mail notification to the appropriate fiscal services office and the appropriate discipline management officer who will contact the approving official to determine why the statement(s) is late. Third requests for documents will be turned over to the Deputy Chief of Administrative Policy and Services (APS) and Chief of the Office of Fiscal Services (OFS) who will notify the cost center and request either cancellation of the card(s) or the transfer of approving official duties to another employee, based on their assessment of responsibility.
Supporting documentation must include a copy of the actual document used to make the RDE entry. Any alteration of the source and/or supporting document(s) after RDE entry and before faxing them to OAFM may be construed as falsification of official Government records. All copies of supporting documentation should be faxed to OAFM at 703-648-7687 or express mailed to OAFM, MS 270, National Center, with the cover sheet clearly annotated with “Stat Sampling Documentation.”
When apparent errors are found during the audit process, OAFM will e-mail the RDE site directly to obtain additional information, to provide instruction on proper procedures, or to assist the RDE user in making the proper corrections. The OAFM may request users to provide copies of original documentation or other supporting or explanatory material.
The OAFM will compile summary information from the audit reviews to identify control weaknesses, develop training requirements, and to improve the remote data entry process. The OAFM will provide this information to the Fiscal Services Chiefs for dissemination to the cost centers.
3. Accounts Payable/Purchase Order. All payments and purchase orders less than or equal to $25,000 are subject to statistical selection to be audited. The OAFM will audit all documents reflecting values more than $25,000.
For all payments/purchase orders greater than $25,000 and less than $50,000: Send all supporting documentation to OAFM immediately after entering the payment into the Federal Financial System (FFS). The documentation should include the vendor invoice, receiving report, purchase order, and any amendments, if applicable. All copies of supporting documentation should be faxed to OAFM at 703-648-7687 or express mailed to OAFM, MS 270, ATTN: STAT SAMPLING, National Center, with the cover sheet clearly annotated with “Stat Sampling Documentation.”
For all payments/purchase orders less than or equal to $25,000: Documentation should be sent to OAFM only if the office is contacted because the payment has been randomly selected for audit. The documentation should include the vendor invoice, receiving report, purchase order, and any amendments, if applicable.
The OAFM will generate a file from the PVHT and PVLT tables that lists all payment documents for a specific quarter based on the closed date on the PVHT. This will be imported into a database to statistically select the sampled documents.
Since OAFM reviews all payment documents that are greater than $25,000 before
they are accepted in FFS, these will be excluded from the statistical sample.
The sampling process will also exclude documents with a net zero dollar value.
Once OAFM receives the proper documentation, the reviewer will examine each voucher and complete the Audit Review List for Payments (Attachment 1). OAFM will calculate the error results of the reviewed documents. Equipment purchases over $15,000 charged to the incorrect object class will be forwarded to the Branch of Property Management (BPM) for capitalization.
4. Charge Card Statements and Convenience Checks. In coordination with the Office of Acquisition and Grants (OAG), OAFM administers a sampling process for reviewing centrally billed charges against the government charge card program. The sampling process applies to all charge card transactions that are centrally billed (and NOT travel related) and identified on the charge card statement under the line entitled “Notice Memo Items Listed Below.”
NOTE: Travel transactions that are centrally billed are not included in this
audit process. Those centrally billed transactions are audited during the Travel
For all Bank of America Statements: Documentation should be sent to OAFM only if the office is contacted because the charge card statement has been randomly selected for audit. The documentation must include copies of all supporting receipts for centrally billed purchases (excluding travel related expenses). Convenience check transactions should include invoices or receipts that should be stamped "Vendor does not accept credit card. Paid by Convenience Check."
Please note if cardholders do not provide charge card statements and supporting documentation within the requested time, the OAG may suspend their privileges pending a determination of the circumstances. Cardholders, approving officials, and RDE personnel are advised that OAFM and OAG will work with cardholders, cost center AO or other designated officials, fiscal services chiefs, and approving officials to develop any appropriate corrective actions necessary as a result of the statement review.
The charge card statements audit will be performed through a separate review process in a manner similar to the payment document audit. The OAFM will generate a file from the CARD table. This file will list all cardholder statements for a specific quarter based on the purchase date on the CARD table. The posting date should correspond to the cardholder’s monthly statement. Statements that only have travel purchases will be eliminated from the sample and reviewed in the travel audit. All cardholder statements will be subject to audit, if they are randomly selected for the sample. The random number function in the statistical sample database will randomly select the cardholder statements to be reviewed based on the desired sample size. The reviewer will send e-mail to the individual cardholder and a copy to the cost center AO or other designated official to request copies of the supporting documentation, which the cardholder will then fax or express mail to OAFM. The appropriate fiscal services office will be contacted if a timely submission is not made to OAFM.
As the proper documentation is received in OAFM, the reviewer will examine each statement and complete the Audit Review List for Charge Card Statements (Attachment 2) on a form in the statistical sampling database. OAFM will calculate the error results of the reviewed documents. This analysis will be similar to the analysis of the payment process.
5. Travel Vouchers. All travel vouchers greater than $25 are eligible for audit. The procedures below apply to those vouchers processed through the Travel Manager Interface and those processed by OAFM. Any travel voucher that is greater than $2500 will be audited. The audit will include examination of the charge card Travel Business Line and the charge card corporate accounts.
NOTE: Permanent-change-of-station (PCS) travel vouchers, foreign travel vouchers, temporary duty extended vouchers, travel vouchers with advance reductions, and constructed travel vouchers are not stamped approved in Travel Manager. These vouchers must be sent to OAFM for audit and entry into FFS.
For Travel Vouchers greater than $2500: Send all supporting documentation to OAFM. The documentation should include a copy of the travel voucher and copies of the receipts and be clearly marked as “Stat Sampling Documentation.”
For Travel Vouchers less than or equal to $2500: Documentation should be sent to OAFM only if the office is contacted because the travel voucher has been randomly selected for audit. The documentation should include a copy of the travel voucher and copies of the receipts and be clearly marked as “Stat Sampling Documentation.”
OAFM will generate a file that includes travel vouchers from the spending journal that list all travel documents processed during the quarter. The file will be imported into a statistical sampling database.
Once the travel voucher is received in OAFM, the reviewer will examine the travel voucher and complete the Audit Review List for Travel Vouchers (Attachment 3) on the form in the statistical sampling database. OAFM will calculate the error results of the reviewed documents.
6. Analyses and Actions Taken Based on Audit Results.
• Analysis will be done on the results of the audit using statistical
formulas and calculations to determine the cost effectiveness of the audit and
to ensure that desired results are being reached.
• Analysis will be done to determine if the process needs to be changed in the areas of sample size, frequency of audit, and confidence levels.
• Users, the AO or other designated officials for the cost centers, servicing fiscal services offices, and the appropriate management officers will be contacted to inform them of the errors found during the audit.
• The need for re-training of field office personnel will be evaluated based on the results of the audit. (Example: prompt pay)
• Errors that are found will be tracked by FFS UserID to the cost center to identify repeated errors for corrective action. If errors persist, FFS authority will be revoked until the user and approving official, if necessary, have been retrained.
• Errors will be analyzed to determine if new or improved office rules and/or procedures are needed.
• Questions or concerns involving the charge card review may result in a request for additional documentation outside of the stat sampling process.
• Charge card authority will be revoked or suspended for misuse or violation of the charge card or if documentation is not provided. Cardholders and approving officials will be required to attend charge card training regarding policies and procedures for use of the charge card. A corrective action form will be provided to OAG that identifies actions taken on findings from the stat sampling process and returned to OAFM for documentation.
• A summary report of results will be prepared for each quarter and provided to all participants involved. A summary report will be provided to management that will include the data inputs for the sampling process, the results of the sample, whether the results were acceptable, and any sampling plan modifications based on the sample results.
7. For Further Information. If you have questions about the statistical sampling review process, please contact:Accounts Payable/Purchase Orders – Brenda Fulk at 703-648-7654,
Charge Card Statements – Dawn Buckingham at 703-648-6361,
Travel Vouchers – Jackie Lynch at 703-648-7680,
(signed) Carol F. Aten
Carol F. Aten
Chief, Office of Administrative Policy and Services