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Internal Control Testing

Appendix II: Objectives, Scope, and Methodology

transactions totaling nearly $6 billion that exceeded the $2,5003 micropurchase threshold. We selected this second sample because of additional acquisition requirements associated with purchases over the micropurchase threshold, and the high dollar amount associated with these transactions. Specifically, while only 3 percent of governmentwide purchase card transactions from July 1, 2005, through June 30, 2006, were over the micropurchase threshold, they accounted for 44 percent of the total dollars spent during that period.

With our probability sample, each transaction in the population had a nonzero probability of being included, and that probability could be computed for any transaction. Each sample element was subsequently weighted in the analysis to account statistically for all the transactions in the population, including those that were not selected. Because we followed a probability procedure based on random selection, our sample is only one of a large number of samples that we might have drawn. Since each sample could have provided different estimates, we express our confidence in the precision of our particular sample’s results as a 95 percent interval (e.g., plus or minus 10 percentage points). This is the interval that would contain the actual population value for 95 percent of the samples we could have drawn. As a result, we are 95 percent confident that each of the confidence intervals in this report will include the true values in the study population. All percentage estimates from the samples of executive agency purchase card activity have sampling errors (confidence interval widths) of plus or minus 10 percentage points or less.

Our audit of key internal controls focused on whether agencies provided adequate documentation to substantiate that (1) purchase card transactions were properly authorized and (2) goods and services acquired with purchase cards were independently received and accepted. As part of our tests of internal controls, we reviewed applicable federal laws and regulations related to the FAR and purchase card uses. We also identified and applied the internal control principles contained in Standards for Internal Control in the Federal Government,4 Audit Guide: Auditing and Investigating the Internal Control of Government Purchase Card

3We used the micropurchase threshold of $2,500 existing at the time of the audit. This threshold was increased on September 28, 2006, to $3,000.

4GAO/AIMD-00-21.3.1.

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GAO-08-333 Governmentwide Purchase Cards

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