This sample audit report provides a review of the key processes related to disbursement, including accounts payable (AP), expense accounting and procurement cards.
Objectives of this report include understanding the AP, expense accounting and procurement card processes; evaluating the internal control environment and process effectiveness/efficiency; and providing best practices where opportunities for improvement exist.
The following key observations were noted during the review:
System access is not limited to accounts payable management and staff. In addition to authorized AP users, a large number of programmers have been given system access. System access should be restricted to those users responsible for performing AP operations.
Users with access to all AP functions may create phony vendors and initiate payment to that vendor. If treasury doesn’t catch the fraud when reviewing disbursements, a check may be issued.
AP and cost accounting management are uncertain as to the accuracy of the AP accrual. Because relevant systems are not completely integrated, there is a need for clearly defined reconciliation procedures. Current procedures are not adequate.