COUNTY OF HENRICO

INTERNAL AUDIT OFFICE

RICHMOND VA
DETAILED AUDIT STEPS
AUDIT NUMBER 152
AUDIT TITLE – LIBRARY EXPENDITURES

PREPARED BY
JUDY A. DAVIS POORE
PHONE 804-501-4210 E-MAIL poo02@co.henrico.va.us
WEBSITE http://www.co.henrico.va.us/audit/

SECTION H. STATS

OBJECTIVE: TO DOCUMENT STATISTICAL DATA FOR THE LIBRARY.

H.1 PREPARE A SECTION INDEX.

H.2 PREPARE A SECTION CONCLUSION.

H.3 DOCUMENT HISTORICAL DATA FOR LIBRARY EXPENDITURES.

K.4 EVALUATE AUDIT DATA USING ACL AND DOCUMENT SAMPLE

SELECTION FOR EXPENDITURES.

SECTION I. EXPENDITURE TESTING – NON-ENCUMBERED TRANSACTIONS

OBJECTIVE: TO TEST RANDOMLY SELECTED NON-ENCUMBERED PAYMENTS

FOR PROPER PROCUREMENT, CLASSIFICATION, DOCUMENTATION,
ACCOUNTABILITY, AND PROPRIETY.

I.1 PREPARE A SECTION INDEX.

I.2 PREPARE A SECTION CONCLUSION.

I.3 PERFORM THE FOLLOWING TEST FOR EACH RANDOMLY

SELECTED NON-ENCUMBERED PAYMENT TRANSACTION FROM
SECTION H:

A VERIFY PROCUREMENT MADE IN ACCORDANCE WITH

APPLICABLE POLICIES AND PROCEDURES.

B CONFIRM EXISTENCE OF VENDOR INVOICE OR OTHER

SUPPORTING DOCUMENTATION ATTACHED TO
ACCOUNTING RECEIVING REPORT.
 C COMPARE AND AGREE THE VENDOR NAME AND AMOUNT
LISTED ON THE SUPPORTING DOCUMENTATION.

D RECALCULATE AND AGREE PAYMENT AMOUNT.

E VERIFY THAT THE AGENCY SELECTED THE CORRECT

OBJECT CODE.

F ENSURE THAT INDIVIDUALS RECEIVING GOODS OR

SERVICES HAVE SIGNED AND DATED THE VENDOR INVOICE
AND/OR PACKING SLIP TO DOCUMENT RECEIPT AND TO
CONFIRM THE ACCURACY AND COMPLETENESS OF
AMOUNTS BILLED.

G ENSURE PROMPT PAYMENT OF THE VENDOR INVOICE

DEFINED AS THE DUE DATE OR IF NO DUE DATE THAN NOT
MORE THAN 45 DAYS FROM THE INVOICE DATE.

H VERIFY THE NEI WAS SIGNED AND DATED BY AN

INDIVIDUAL DESIGNATED BY THE AGENCY ON THE
AUTHORIZED SIGNATURE FORM.

I VERIFY AGENCY SELECTED THE CORRECT PAYMENT

CATEGORY.

J DETERMINE WHETHER THE INVOICE WAS DATE STAMPED.

I.4 REVIEW ALL NON-ENCUMBERED INVOICES (TESTED ABOVE) FOR

PAYMENTS IN EXCESS OF $2,000 AND DETERMINE IF PAYMENTS
APPEAR TO REPRESENT DESIGNATED SERVICES AS AUTHORIZED
BY THE PURCHASING MANUAL (12/1/00 THE MANUAL WAS
UPDATED 7/03 SUBSEQUENT TO OUR AUDIT PERIOD) IN SECTION
2.5.

I.5 FOR EXPENDITURE TRANSACTIONS THAT ARE NOT VN OR VE,

REVIEW FOR APPROPRIATENESS.

I.6 REVIEW A LISTING (PREPARED IN ACL FROM ALL FY03

EXPENDITURES) OF ALL NON-ENCUMBERED INVOICES FOR
PAYMENTS IN EXCESS OF $2,000 AND DETERMINE IF PAYMENTS
APPEAR TO REPRESENT DESIGNATED SERVICES AS AUTHORIZED
BY THE PURCHASING MANUAL (12/1/00 THE MANUAL WAS
UPDATED 7/03 SUBSEQUENT TO OUR AUDIT PERIOD) IN SECTION
2.5.

Follow Up with the Library for any concerns noted during the review.
 I.7 Statistically review Library usage of one time vendors in FY03.

Follow up with the Library for any concerns noted during the review.

SECTION J. EXPENDITURE TESTING – ENCUMBERED TRANSACTIONS

OBJECTIVE: TO TEST RANDOMLY SELECTED PURCHASE ORDER PAYMENTS FOR

PROPER PROCUREMENT, CLASSIFICATION, DOCUMENTATION,
ACCOUNTABILITY, AND PROPRIETY.

J.1 PREPARE A SECTION INDEX.

J.2 PREPARE A SECTION CONCLUSION.

J.3 FROM THE SAMPLE SELECTED IN SECTION H -- PERFORM THE

FOLLOWING TEST FOR EACH RANDOMLY SELECTED
ENCUMBERED PAYMENT TRANSACTION:

A VERIFY PROCUREMENT MADE IN ACCORDANCE WITH

APPLICABLE POLICIES AND PROCEDURES – BY REVIEW OF
PURCHASE ORDER.

B CONFIRM EXISTENCE OF VENDOR INVOICE OR OTHER

SUPPORTING DOCUMENTATION ATTACHED TO
ACCOUNTING RECEIVING REPORT.

C COMPARE AND AGREE THE VENDOR NAME AND AMOUNT

LISTED ON THE SUPPORTING DOCUMENTATION TO
CORRESPONDING PURCHASE ORDER INFORMATION.

D RECALCULATE AND AGREE PAYMENT AMOUNT.

E VERIFY THAT THE AGENCY SELECTED THE CORRECT

OBJECT CODE.

F VERIFY THE VE WAS SIGNED AND DATED BY AN

INDIVIDUAL DESIGNATED BY THE AGENCY ON THE
AUTHORIZED SIGNATURE FORM OR WAS PROPERLY
PROCESSED ELECTRONICALLY.

G ENSURE PROMPT PAYMENT OF THE VENDOR INVOICE

DEFINED AS THE DUE DATE OR IF NO DUE DATE THAN NOT
MORE THAN 45 DAYS FROM THE INVOICE DATE.
 H DETERMINE WHETHER THE INVOICE WAS MARKED AS TO
INDICATE REVIEW BY THE AGENCY.

I DETERMINE WHETHER THE INVOICE WAS DATE STAMPED.

SECTION K. EXPENDITURES – PERSONNEL

OBJECTIVE: TO VERIFY THAT TIME REPORTING TRANSACTIONS, INCLUDING

OVERTIME HOURS, WERE PROPERLY APPROVED, RECORDED, AND
CALCULATED IN ACCORDANCE WITH APPLICABLE PERSONNEL RULES AND
REGULATIONS.

K.1 PREPARE A SECTION INDEX.

K.2 PREPARE A SECTION CONCLUSION.

K.3 DOCUMENT SAMPLE SELECTION.

K.4 TEST EACH PAYPERIOD FOR THE FOLLOWING:

A DETERMINE IF THE TOT SHEET TOTALS AGREE TO

AGGREGATE TOTAL OF CORRESPONDING HOURS AS
REPORTED ON WORK/LEAVE REQUEST FORMS AND
TIMESHEET.

B REVIEW TOT SHEET MAINTAINED IN FINANCE-PAYROLL

OFFICE FILES AND CONFIRM DOCUMENTED APPROVED BY
AN AUTHORIZED INDIVIDUAL.

C REVIEW CHECK PICK UP LOG MAINTAINED BY FINANCE-

PAYROLL OFFICE AND DETERMINE WHETHER THE PERSON
PICKING UP THE CHECKS IS AUTHORIZED AND ALSO IS NOT
THE TIME PREPARER.

K.5 FOR THE PAYPERIOD TESTED, ENSURE THAT THE DIRECTOR OF

LIBRARIES TIME WAS APPROVED BY THE MANAGER’S OFFICE.

K.6 For Fiscal Year 2003, ensure that all Fiscal Year Timesheets are on file at HQ
(HEADQUARTERS). For timesheets not on file, document the reason.

K.7 For the period 4/14/03 to present, schedule the TOT (TOTAL PAYROLL
SUMMARY) for the 12 library location codes. Document who approved the
TOT and if they TOT was properly on file at HQ.
 K.8 Develop a detailed schedule of documents within the payroll process and
determine the following: Approval at branches, Approval at HQ, Filing by
branches and Filing by HQ.

K.9 Document evaluation of concerns raised by the Library to the Director of HR.

K.10 FOR PAYPERIOD B26 FOR THE 88 LEAVE SLIPS ON FILE AT THE
LIBRARY COMPUTE THE FOLLOWING:
- PERCENTAGE SIGNED BY EMPLOYEE
- PERCENTAGE SIGNED BY SUPERVISOR
- PERCENTAGE SIGNED BY AGENCY HEAD
- PERCENTAGE WITH LOCATION CODE LISTED
- PERCENTAGE WITH SSN LISTED
- PERCENTAGE WITH THE BOX CHECKED AT THE BOTTOM OF
THE FORM

SECTION L. FOLLOW UP

OBJECTIVE: TO FOLLOW UP ON PRIOR AUDIT RECOMMENDATIONS RELATED

TO THE LIBRARY.

L.1 PREPARE A SECTION INDEX.

L.2 PREPARE A SECTION CONCLUSION.

L.3 FOLLOW UP ON OPEN AUDIT RECOMMENDATIONS RELATED TO

THE LIBRARY.