August 21, 1995
COMPTROLLER'S MEMORANDUM NO. 03 (1995-96)
SUBJECT: IMPLEMENTATION OF INVOICE SAMPLING
Enclosed is a copy of the operating scenario
for the agencies and the Bureau of Auditing.
Our target date for implementation of
sampling and delegation to the agencies of retention of original
documentation is September 5, 1995. We will advise each agency
individually of their invoice sampling start date and other criteria.
We will have the capability of sampling specific sites within
As discussed in Comptroller's
Memorandum No. 18 (1994-95), agencies will submit copies of documentation
to this office to support requests for payment, in lieu of the
original invoices and other documents. Invoice Sampling will
be phased in by agency and we will work with each agency to ensure
they have processes in place to enable sampling. It is important
to note that regardless of whether an agency may be sampled on
September 5, 1995, all agencies will be required to retain originals
and send only copies to Auditing on September 5, 1995. Copies
of original documentation need be sent for sampled invoices only.
Each agency will not forward copies of invoices equal to or less
than $250 that are not selected for sampling.
Agencies may submit photocopies or may
submit copies via electronic media. Agencies that wish to pursue
electronic submission of documents should contact Steve Wilson
in the Bureau of Auditing at (904) 488-4094; SUNCOM 278-4094.
Information from the Department of State
regarding retention by the agencies of the original vouchers,
invoices, and other documents will be sent out at a later date.
With the approval of the Department of State, agencies may retain
these original documents on electronic media rather than maintaining
them in hard copy form for the established retention period.
Since these original documents maintained by the agencies represent
the only copies that will be retained by the State to support the
payments, it is important that each agency establish
sufficient controls and procedures over maintenance of the documents.
The copies of the documents submitted to this office to support
the sampled invoice or regular voucher payment requests will not
be retained after the payment requests have been approved.
BUREAU OF AUDITING
INVOICE SAMPLING - OPERATING SCENARIO
AGENCY INVOICE SAMPLING PROCESS
- Identifying Sampled Invoices: Sampled invoices and supporting documentation will be delivered, by courier, in separate batches than the regular vouchers of invoices above the threshold. SAMAS will create a daily report of (selected) sampled invoices sorted by site within OLO. Sampled invoices will also be flagged on each voucher. The report will be titled, "Report of Invoices Selected for Statistical Sampling". The report lists by site within OLO the Statewide Document Number of the voucher that the selected invoice is on, the Voucher Date, the Object Code assigned the transaction, the Invoice Amount, Invoice Number, and the Vendor Number associated with the invoice.
Because the Bureau cannot control when an agency submits its vouchers, each daily report of selected invoices will have to be checked against vouchers received each day until all the listed invoices have been submitted or until it is determined that the agency has deleted the invoice. The Agency will be required to notify Auditing of all sampled invoice deletions, including those not being preaudited.
- Processing the vouchers containing the selected invoices: There are two ways of processing the vouchers containing the selected invoices:
- hers processed by specifically assigned personnel; or
- Have the vouchers processed by whomever receives the voucher in their daily assignment of vouchers.
Bureau of Auditing personnel in Tallahassee and the field offices will determine which processing option is best suited for their operation. Only the selected invoice will be audited. The other invoices contained on the voucher will be "posted", approved for payment, without audit. An entire voucher can be posted after auditing only the sampled invoices.
The first method of voucher processing requires training only a small group of people on how to process the vouchers.
- Recording Sampled invoice error, return, and exception data for statistical purposes: There are two ways of recording Sampled Invoice feedback data for selected invoices:
- Have the recording done by specifically assigned personnel; or
- Have whomever processes the voucher containing the selected invoices record the information.
The first method of recording is the most efficient. SAMAS will be used to capture, track, and report critical errors. The Bureau of Auditing will develop criteria for critical errors, additional reason codes, and a supplemental tracking and reporting system for non-critical errors. This system will generate both error feedback and sampling statistical reports.
- Analyzing and reporting Sampling results for statistical purposes: The Bureau will develop the means of periodically analyzing and reporting the error feedback and statistical information so that appropriate agency corrective action can be taken. The Bureau will develop the appropriate computer applications, along with the Division of Information Systems.
- Adjusting the thresholds and Sampling criteria: The Bureau will work with the Division of Information Systems to develop efficient means of adjusting sampling criteria (by "Object Codes" within sites as well as adjusting thresholds by Site within OLO) based on statistical information gathered and based on corrective actions taken by the agencies.
- Agencies that assign their own "Agency Voucher" numbers:
Agency must sort their invoices into two groups before recording them in Departmental SAMAS to avoid having some invoices reject (by Central SAMAS);
- Those invoices above the threshold ($250), and
- Those invoices equal to and below the threshold.
If an agency records mixed invoices in the same "Account Code", Departmental SAMAS (during nightly update) will accept the first invoice or group of invoices in the same threshold range (> or =< the threshold) but, reject any following invoices in the voucher group that are not in the same threshold range until the "Account Code" changes. The agency will not know that Departmental SAMAS has rejected any invoices until the next morning when the rejected invoice appears on the agency's reject transaction report. The rejected invoice transactions will have to be backed out of the agency's Departmental SAMAS records and re-entered so that the invoice payment can be processed during a subsequent cycle. An agency will not be able to submit "split" invoices for the same vendor that have amounts within the sampled threshold mixed with amount above the threshold.
- Agencies that allow Departmental SAMAS to assign "Agency Voucher" Numbers:
Agency will not have to sort their invoices before recording them in Departmental SAMAS. As long as the "Account Code" remains the same and the invoice amounts are within the same threshold range (> or =< threshold), Departmental SAMAS will group the invoices on the same voucher schedule and assign the next sequential "Agency Voucher" number. When the "Account Code" changes or an invoice amount falls into another threshold range, a new separate voucher schedule grouping of invoices will begin.
By allowing Departmental SAMAS to assign the "Agency Voucher" number, Departmental SAMAS (during nightly update) will not reject any invoice transactions because of mixing invoices in different threshold groups on the same voucher.
- Agency submittal of vouchers to the Bureau of Auditing:
Effective September 5, 1995, all agencies will submit only photocopies or copies via electronic media of the voucher schedules and supporting documents required to be preaudited by the Bureau. Photocopies will be disposed of after the requested payment is approved. The original documentation to support the requested sampled invoice payments will be maintained by the agencies. Also, any additional supporting documentation required by Auditing, after the initial submission, must be retained by the Agency.
Agencies must submit all vouchers to be preaudited by the Bureau in Statewide Document Number order. Those invoice transactions randomly selected for preaudit within Site, within OLO, will be flagged. The agency will be notified, by a printed message on the voucher schedule, as to which vouchers they must submit to the Bureau of Auditing when each voucher schedule is printed. Since both sampled and non-sampled invoices within the threshold amount may appear on the same voucher schedule, SAMAS will flag the invoices to be sampled. The agency need send copies of the voucher schedules and supporting documentation for the sampled invoices on the voucher schedule only. The other "within threshold" invoices contained on the voucher will be approved for payment without an audit. Only the flagged sampled invoices will be audited.
Each agency must assign a unique invoice number on voucher schedules. The voucher schedule amount(s) should not be a simple summation of multiple invoices but should contain individual invoice numbers and amounts. The agency must ensure that couriers retain the integrity of the separate batches of voucher schedules submitted to the Bureau of Auditing (i.e., batches of invoices above the threshold separate from batches of sampled invoices within the threshold). An agency is required to notify Auditing when deleting any sampled invoices.
- Agency responsibilities regarding Sampling Feedback:
Computer applications and reports will be developed to assist the Bureau of Auditing in processing sampled invoices. These systems and reports will gather sampling error, exception, return, and deletion statistical data. The Bureau of Auditing will tailor these reports to reflect sample findings by site within OLO. Feedback will be provided to each site to allow for correction of root causes of errors, returns, etc. An agency's ability to effectively respond to this Sampling feedback process will determine subsequent and future changes to sampling criteria, thresholds, etc. for a specific site.
Each site within an agency will receive regular preaudit return, deletion, and error reason code feedback reports. The Bureau of Auditing will work with each site to continuously improve the accuracy of all invoices submitted for payment. Monthly and year-to-day feedback reports will also be provided to each site and agency.
Please direct any questions regarding invoice sampling to the Bureau of Auditing at 410-9194, Suncom 210-9194