Item - 2016.AU5.6

As part of the Continuous Controls Monitoring Program, the Auditor General provides City management with regular reports to assist in proactively monitoring financial transactions, detecting unusual expenses and identifying areas where internal controls could be strengthened.

In 2015, the program was expanded to include an analysis of payments processed by the City’s Accounts Payable Unit.  This first report on the continuous controls monitoring of City accounts payable is limited to an analysis of potential duplicate payments during the nine-month period from January 1 to September 30, 2015.

In a sample of 40 payments (20 pairs of invoices) identified through our data analysis, we identified two payments for duplicate invoices.  There were also nine invoices where the payments were incorrectly processed to wrong vendors.  At the time of this report, the Accounts Payable Unit had already recovered $43,379 out of the $47,008 in duplicates or incorrect payments.  There is one remaining payment transaction that is being investigated by the Unit.

Improved controls through active monitoring of the City’s payments is necessary to detect payment anomalies on a timely basis.  Management has advised that the Accounts Payable Unit has made efforts to improve their existing system of processing payments which will minimize payments to wrong vendors.  The Unit will continue to work on improving the accounts payable processes.

The nature and extent of the Auditor General’s continuous controls monitoring of City payments will be expanded in future periods.