KENTUCKY STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) June 30, 2021

Finding 2021-010: Credit Card Approvals

Information on the Federal Program: Higher Education Institutional Aid (CFDA Number 84.031B) – U.S. Department of Education

Criteria: The University's approval policy, as found in the Business Policies and Procedures Manual, is outlined as follows:

• Purchases less than $10,000 require the approval of the Department Chair and the Principal Investigator
• Purchases between $10,000 and $19,999.99 require the additional approval of the Director, Dean, Associate/Assistant VP
• Purchases between $20,000 and $39,999.99 require the additional approval of the Vice President
• Purchases above $40,000 require the additional approval of the President

Condition and context: Out of a population of 1,377 expenses, including 18 credit card payments, made from Title III Part B funds totaling $1,774,314, we sampled 42 expenditures, including 2 credit card payments, totaling $353,291.64. Out of this sample, the University failed to correctly provide approval for both of the credit card expenditures. The University pays all corporate credit card bills without consideration of the published approval policy. Therefore, it can be determined that the entire population of credit card expenditures were not in compliance with the above criteria.

Questioned Cost: $12,639

Cause: The University pays all corporate credit card bills without consideration of the published approval policy.

Effect: Expenditures made via corporate credit card were not subject to approval.

Recommendation: We recommend the University develop a procedure for ensuring all expenditures made via corporate credit card receive appropriate approval.

Management Response: The University concurs with finding. Use of the corporate credit card is restricted to one office and is managed strictly. The offices ensures, before use, that all procurement procedures have been followed and approvals obtained.

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