It’s a classic battle: P-Card supporters versus P-Card resisters. You try to garner program buy-in, but management concerns about controls prevail. Why? How do you overcome this? Begin with a current risk assessment.
When was the last time you conducted such an analysis of your Purchase Card program? Some organizations have never completed this activity, but it is critical for documenting program risks and the mitigating controls. Besides helping to increase program buy-in among management and auditors, a risk assessment:
- helps you identify any control gaps
- can uncover program inefficiencies
- provides the basis for process audits
There are various ways to approach a risk assessment. The ORCA framework is one:
- Identify your organization’s program objectives
- Determine the potential risks
- Document existing controls
- Specify the necessary actions to address areas that are lacking controls
If your organization has a risk assessment template, you could start with that or consider purchasing the P-Card specific template from Recharged Education.
A risk assessment provides the foundation for the P-Card control environment.
As you complete the assessment process, here’s an example of something to evaluate. When I managed a P-Card program, an internal auditor asked me if I could obtain a card for myself without anyone knowing. I admitted there were no preventative controls for this. However, there were established detective controls, which were documented in a risk assessment.
Keep in mind that more controls do not necessarily make a program better. To be successful, a Purchasing Card program must have effective controls to prevent and detect card fraud. The challenge is striking the right balance; you do not want to over- or under-control a program. Too many controls are costly, impacting the process savings inherent to P-Cards, while a lack of effective controls puts your organization at risk.
About the Author
Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…