Reduce the risks and consequences of errors or fraud.
Departments with effective internal controls, both preventative and detective, can reduce the risks and consequences of errors or fraud.
Although KFS has forced separation of duties for the initiator and approver of a transaction, many transactions that have been generated outside of KFS do not. You should pay closer attention to transactions that are directly fed into the ledger by recharge departments using the General Ledger Internal Billing (GLIB) document and by direct charges for airfare, local hotel or catering from the Central Travel System (CTS).
Central Travel System (CTS) transactions
When an employee uses AggieTravel, BCD Travel, the CTS Local Hotel program, or Catering Services and direct bills the university, these transactions are not routed for approval. The expenses post directly to the department account/Billing ID that the employee/traveler has established in their profile. This direct billing leaves the university at risk for potential misuse or fraud if the fiscal officers are not performing their monthly reviews. Best practices for CTS transactions:
- Create a separate account that will be used for all CTS transactions as a "clearing account" and assign a fiscal officer that is familiar with all department personnel. Having a separate account will help highlight any unusual activity or excessive charges in the account.
- Use the Analytical Ledger Review (ALR) to verify that all CTS transactions appear reasonable and travel/expense has been approved. As well as confirming that all travelers/employees are part of your department and are currently employed. You can perform this review in the feed section by drilling down into the "AT" origin code or drilling down in the Travel (SUB5) section.
- If your CTS transactions are not recorded in a separate account you must review the AggieTravel Unreconciled CTS expenses report (DS FIS 421). Verify all transactions appear reasonable, travel/expense has been approved and the traveler/employee is part of your department and currently employed.
- No personal travel/expenses should be charged to the university. Spouse/partner travel that will be billed to the university and is allowed per policy should be pre-approved prior to booking the travel/expense.
- Send reminders to travelers that have unreconciled transactions greater than 30 days.
Disbursement Vouchers (DVs) for Employee Reimbursements
Employee reimbursements are more vulnerable to error or fraud as these transactions have bypassed all approved purchasing methods. These reimbursements should be the exception and not the norm. If you are receiving multiple reimbursement requests from the same employee within a small time frame your department should advise the employee of the proper purchasing methods. Best practices when reviewing requests for employee reimbursements:
- Look for duplicate submissions for out of pocket reimbursements.
- If the employee has a PCard, look for transactions submitted as a PCard transaction but also as an out of pocket reimbursement.
- Departments should restrict employee reimbursements as much as possible.
- Provide new employees with guidance on purchasing practices and direct them to the "How to Buy" guide.
In the last several years, there has been an increase in the number of gift cards purchased with university funds. With this increase there is also an increase in the risk that these gift cards are mishandled and/or misused. Best practices for managing gift cards.
- Treat gift cards like you would cash.
- Always maintain gift cards under dual custody.
- Maintain gift card distribution log to record the distribution of gift cards.
- Conduct random audits of the gift cards and the gift card log. This should be performed by someone not involved in the custody and distribution of the gift cards.
- Gift cards purchased in excess of policy limits for employees or non-employees must be reported to Tax Reporting & Compliance.
- If you are purchasing gift cards for spot awards that will be used throughout the year, do not purchase more than you expect to use within the fiscal year (July-June).
- Purchase gift cards through AggieBuy.
Purchasing Card (P-Card transactions)
PCards are at higher risk of misuse or fraud when the fiscal officer is not performing adequate reviews or the department does not have appropriate separation of duties. Departments should have someone other than the cardholder verifying all purchases have been received and accounted for. Best practices for PCard transactions:
- Create a separate account for PCard transactions to ensure transactions are being reconciled timely. A department can also create separate accounts for each PCard which would allow better oversight of what individuals are purchasing and their purchasing patterns.
- Ensure receipt of purchases has been performed and custody of item is not maintained by the purchaser. This will help prevent items being returned for store credit by the purchaser.
- Review receipts to ensure there are no personal purchases.
- Establish a process to ensure purchaser provides receipts in a timely manner. A PCard can be canceled if the purchaser is not following department processes or following campus policies.
- For more information on what is an allowable/unallowable purchase visit the Procurement Card page.
Travel is an especially high-risk area for misuse or fraud. One way to mitigate the risk is to require pre-trip approval for all travel and utilize AggieTravel as the pre-approval system. Best practices for reviewing travel reports:
- Review explanations and ensure the traveler is not requesting reimbursement for items that have already been pre-paid or have been previously paid on a different expense report.
- If the employee has appointments in two departments, think about coordinating travel expenses reports with the other department to ensure both departments are not reimbursing the traveler for the same expenses.
- Review all exceptions noted by AggieTravel and ensure the appropriate review/action has taken place.
- Ensure the accounts being charged are appropriate for the fund source.
- If you have concerns with the type of travel or repeatedly high cost/luxury travel, be sure to discuss your concerns with the MSO/CAO/Manager of your department.
- Review unreconciled CTS transactions (DS FIS421) and unreconciled Card Expenses (DS FIS418) to ensure the traveler does not have any unassigned travel expenses.