HomeMy WebLinkAbout2122-8 Follow-up Munis Part II-Vendor Master (Final 3-7-22)Follow-up County Accounting System (MUNIS) purchasing topics: Part II – Vendor master report #2122-8 March 2022 2020 FOLLOW-UP REPORT County Accounting System (MUNIS) purchasing topics: Part II – Vendor master (Internal audit report #20/21-6 issued March 2021) To request this information in an alternate format, please call (541) 330-4674 or send email to David.Givans@Deschutes.org Deschutes County, Oregon Internal Audit David Givans, CPA, CIA – County Internal Auditor Aaron Kay – Performance Auditor internal.audit@deschutes.org Audit committee members: Daryl Parrish, Chair - Public member Jodi Burch - Public member Tom Linhares - Public member Scott Reich - Public member Summer Sears - Public member Stan Turel - Public member Patti Adair, County Commissioner Charles Fadeley, Justice of the Peace Lee Randall, Facilities Director
Follow-up County Accounting System (MUNIS) purchasing topics: Part II – Vendor master report #2122-8 March 2022 2020 TABLE OF CONTENTS: 1. INTRODUCTION 1.1. Background on Audit …………..………………………………………….……….……..…. 1 1.2. Objectives and Scope …………….………………………………….…………….………… 1 1.3. Methodology …………………………………….…..………………………….…………….… 1 2. FOLLOW-UP RESULTS …………………….……….……………………………………….…… 2 APPENDICES Appendix I – Updated workplan (status as of March 2022) …….…................ 3-6
Follow-up County Accounting System (MUNIS) purchasing topics: Part II – Vendor master report #2122-8 March 2022 2020 Page 1 1. Introduction 1.1 BACKGROUND ON AUDIT Audit Authority: The Deschutes County Audit Committee has suggested that follow-ups occur within nine months of the report. The Audit Committee would like to make sure departments satisfactorily address recommendations. 1.2 OBJECTIVES and SCOPE “Audit objectives” define the goals of the audit. Objectives: The objective was to follow-up on recommendations from the original audit. Scope: The follow-up included twelve (12) recommendations from the internal audit report for County Accounting System (MUNIS) purchasing topics: Part II – Vendor master (#2021-6), issued in March 2021. The original internal audit report should be referenced for the full text of recommendations and associated discussion. The follow-up reflects the status as of March 2022. 1.3 METHODOLOGY The follow-up report was developed from information provided by Greg Munn, Treasurer and CFO. Comments were sought for the status of the outstanding recommendations. Follow-ups are, by nature, subjective. In determining the status of recommendations that were followed up, we relied on assertions provided by those involved and did not attempt to independently verify those assertions. The updates received are included in Appendix I. Since no substantive audit work was performed, Government Auditing Standards issued by the Comptroller General of the United States were not followed.
Follow-up County Accounting System (MUNIS) purchasing topics: Part II – Vendor master report #2122-8 March 2022 2020 Page 2 2. Follow-up Results Figure I - How were recommendations implemented? The follow-up included twelve (12) outstanding recommendation agreed to by Finance. Figure I provides an overview of the implementation status of the recommendations. With this follow-up, fifty percent (50%) of the outstanding recommendations have been addressed. As indicated in the provided responses, many of the recommendations have not been fully addressed as Finance has been recruiting a business systems administrator position. The details of the follow-up is included at the end of the report in Appendix I. In interpreting the status, Internal Audit may sometimes raise or lower the status provided by the department based on the communication(s) received from the department.
Follow-up County Accounting System (MUNIS) purchasing topics: Part II – Vendor master report #2122-8 March 2022 2020 Page 3 APPENDIX Appendix I – Updated workplan for recommendations for #20/21-6 (status as of March 2022) Items that are not completed are greyed out. Rec # Recommendations Status Estimated or Actual Date of Completion Updated Follow-up comments 1 It is recommended for Finance to consider and clearly document expectations for documentation with vendor additions and changes. • This might include establishing with vendors expectations and contacts for a confirmation process. • This might also include direct calls to the payment receiving bank. • This recommendation might be influenced by implementation of a vendor self-service portal as described below. Completed We have two documents that currently outline our process for vendors. The Vendor Approval Procedure and the Vendor checklist. Both documents are internally used by Finance. The procedure outlines what should be done to verify information. The checklist is a guideline as to what should be attached to a vendor approval, i.e. two address checks performed, the EIN matches IRS records, the Secretary of the State registry is attached, the Bank Account information was verified. 2 It is recommended for the County to consider how to implement electronic signatures across County departments and functions based on the associated risks and requirements. Planned No update from initial comments. This would be a worthwhile discussion at the county-wide level. Until then the Finance department will continue to authenticate vendor applications and W-9 submissions, regardless of the signature method.
Follow-up County Accounting System (MUNIS) purchasing topics: Part II – Vendor master report #2122-8 March 2022 2020 Page 4 Rec # Recommendations Status Estimated or Actual Date of Completion Updated Follow-up comments 3 It is recommended for Finance to consider establishing vendor self-service to collect vendor information directly from vendors. The self-service modules provided by Munis have varying degrees of success and choosing to use vendor self-service will require additional research to see if adoption is worthwhile at this time. Planned No update from initial comments. This is a worthwhile discussion for a future improvement. We have several concerns including the amount of staff time required (does it save time or cost time?); additional training requirements; change management timing; and, liability for changes made that are inconsistent with IRS 1099 requirements, for example. 4 It is recommended for Finance to periodically review and resolve incorrect or duplicated taxpayer identification numbers in the vendor master file. Completed In 2020 we began confirming all taxpayer IDs with the IRS prior to establishing them as a vendor in the Munis system. Additionally, EINs are reviewed when 1099 errors from the IRS are received. We also review vendors bi-monthly and inactivate those that have had no activity within the prior twelve months. With this new process we are reviewing vendors and requiring a new W-9 and vendor application are received before reactivation. This allows us to research/review information currently in the vendor file, including EIN & SSNs. 5 It is recommended the County periodically inactivate vendors with no activity. Completed Vendors with no activity for 12 months are inactivated every 1-2 months.
Follow-up County Accounting System (MUNIS) purchasing topics: Part II – Vendor master report #2122-8 March 2022 2020 Page 5 Rec # Recommendations Status Estimated or Actual Date of Completion Updated Follow-up comments 6 It is recommended all vendors be setup to search for duplicate invoices. Underway A feature in Munis allows vendors to post duplicate invoices. This is a default feature on vendor set up but intended to be used only for vendors that provide statements rather than traditional invoices (i.e., utility companies). The Finance Department is reviewing all vendors and leaving the feature active for only those that it applies. We expect the exercise to be completed within the next 60 days. 7 It is recommended for all vendors established for employee reimbursement be associated to the employee. (Vendor type should be “EMP” and should be associated with employee number} Completed Similar to #5 above, each employee vendor that is new or updated is reconciled to the Employee file in Munis. 8 It is recommended for the Finance Department to periodically review their vendor master lists for missing W-9 and tax information. Completed Process change per #5 above. 9 It is recommended all vendors have their completed W-9 attached to their record and their taxpayer information number entered. Completed Process change per #5 above. 10 It is recommended that Finance and County departments investigate if they are receiving all of the discounts they can get by paying in a timely manner. Planned No update from initial comments. We will explore this further. These discounts are often taken at the invoice level. We intend to add this to our Vendor Application, so we can be alerted to these
Follow-up County Accounting System (MUNIS) purchasing topics: Part II – Vendor master report #2122-8 March 2022 2020 Page 6 Rec # Recommendations Status Estimated or Actual Date of Completion Updated Follow-up comments discounts. Also, we will seek guidance/training about how to set these up at the vendor level. 11 It is recommended for Finance to work with departments to utilize the discounts field when discounts are available. Planned No update from initial comments. See response to #10. This will be a good training opportunity for the new business systems administrator. 12 It is suggested that vendors be evaluated as to whether a better type could be assigned that better reflects the service or product they provide. Planned No update from initial comments. This will require further evaluation to determine whether this would provide a value add and will be reviewed by our new business systems administrator. {End of Report}