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State Auditor details top audit exceptions and recent card fraud cases
Summary
The Washington State Auditor's Office outlined frequent purchase-card audit exceptions and summarized three fraud investigations — Bellevue College, Cusick, and Office of Administrative Hearings — underscoring the need for reconciliations, segregation of duties, and documentation retention.
Carol Gross, audit manager in the State Auditor's Office (SAO), explained accountability audits focus on compliance with laws, agency policies and safeguarding public assets, and she listed frequent audit exceptions that often prompt findings.
"Card user agreements are not completed, retained, or updated every 2 years," Carol said, citing the DES Enterprise Commercial Card Policy as the standard. She said auditors look for evidence that policies were followed and recommended standard forms, a tracking process and a designated purchase-card administrator to own compliance.
Sadie Armijo, director of state audit and special investigations, reviewed recent fraud investigations and the controls that would have reduced risk. On the Bellevue College case she reported, "This misappropriation was $31,510 and a questionable amount of 12,093," and said monthly independent reviews and retained supporting documentation would likely have prevented prolonged loss.
Sadie also described a Cusick town case and a large Office of Administrative Hearings loss discovered via statewide data analytics; the latter involved fictitious vendors and exponential growth patterns that produced an $878,000 loss. SAO urged agencies to segregate duties for uploading and releasing payments and to perform secondary reviews of reconciliations.
