Marshall University Report - wvhepc.org University Report 2003.pdf · The University is composed of...

MARSHALL UNIVERSITY

PURCHASING PERFORMANCE AND COMPLIANCE AUDIT

YEAR ENDED JUNE 30, 2003

Description of Agency The Organization’s legal name is Marshall University (University). The University is a governmental entity that is part of the West Virginia Higher Education Fund, which is a component unit of the State of West Virginia. The University is composed of thirteen colleges and schools, including the Community and Technical College, the Graduate College, the University College, the Colleges of Business, Education and Human Services, Fine Arts, Information Technology and Engineering, Liberal Arts, Nursing and Health Professions, and Science, and the Schools of Extended Education, Journalism and Mass Communication, and Medicine. The University has several campuses in West Virginia, including the main Huntington, West Virginia campus, the South Charleston, West Virginia campus used for the Graduate College, the Learning Resource Center at Gilbert, West Virginia, the Teays Valley Regional Center at Teays Valley, West Virginia, the Mid-Ohio Valley Center at Point Pleasant, West Virginia, and the Southern Mountain Center at Mount Gay, West Virginia. The University is governed by the Marshall University Board of Governors as established by Senate Bill 653 in West Virginia State Code Section 18B-2A-1. Senate Bill 653 was enacted by the West Virginia Legislature on March 19, 2000 and restructured public higher education in West Virginia. Effective July 1, 2001, certain powers were transferred to the Governing Board of each of the institutions of higher education in the West Virginia system. These powers and duties include, but are not limited to: the power to determine, control, supervise, and manage the financial, business and educational policies and affairs of the institution under its jurisdiction; the duty to develop a master plan for the institution; the power to prescribe the specific functions and institution’s budget request; the duty to review at least every five years all academic programs offered at the institution; and the power to fix tuition and other fees for the different classes or categories of students enrolled at its institution. Senate Bill 653 also created the West Virginia Higher Education Policy Commission (the Commission), which is responsible for developing, gaining consensus around and overseeing the implementation and development of a higher education public policy agenda. Also, as established by West Virginia State Code Section 18B-5-4, the Commission is responsible for developing rules governing and controlling acquisitions and purchases for the Commission and Governing Boards. The University is a state-supported interactive university located in Huntington, West Virginia offering two-year and four-year undergraduate programs as well as several graduate programs. Students can choose from 24 associate programs, 41 baccalaureate programs, and 46 graduate programs. The enrollment at the University is approximately 16,000, which includes 4,000 graduate and medical students. The faculty to student ratio is approximately 1 to 18. The University is accredited by the Commission on Institutions of Higher Education of the North Central Association of Colleges and Schools. The facility also has accreditations from various other boards and associations for specific disciplines, including the Accreditation Council for Graduate Medical Education, the American Chemical Society, the Commission on Accreditation in Physical Therapy Education of the American Physical Therapy Association, the National League for Nursing Accreditation Commission, and the National Council for Accreditation of Teacher Education. Marshall is a member of the National Collegiate Athletic Association at the Division I-A level.

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PROCUREMENT COMPLIANCE AND INTERNAL CONTROL Audit Methodology To satisfy the procurement compliance and internal control objective noted above, we performed the following procedures: 1. Chief Procurement Officer (CPO) Designation

Procedure - Reviewed the CPO designation made by the institution of higher education president and evaluated whether the designation was filed with the Vice Chancellor for Administration, State Auditor, and the Attorney General.

Results - No relevant exceptions noted.

2. CPO Responsibilities

Procedure - Reviewed the responsibilities that the CPO was performing to evaluate compliance with the responsibilities and duties as defined in the West Virginia Higher Education Purchasing Procedures Manual.


3. Appointment of Buyers

Procedure - Obtained a listing of Buyers appointed by the CPO and reviewed the designation to ensure that it was made in writing and filed with the Vice Chancellor for Administration, State Auditor, and the Attorney General.


4. Review of Buyer’s Credentials

Procedure - Reviewed the personnel file for all Buyer’s appointed to determine at a minimum either; (a) the Buyer was a graduate of an accredited college or university; or (b) the Buyer has at least four year’s experience in purchasing for any unit of government or any business, commercial or industrial enterprise.


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5. Insurance Bond

Procedure - Obtained the institution of higher education insurance coverage to evaluate that bond coverage was executed for all Buyer’s and CPO’s appointed.


6. Review of Authority Revocations

Procedure - Obtained a listing of delegated authority revoked by the CPO and reviewed the written notification made to the Vice Chancellor for Administration, State Auditor, and the Attorney General.


7. Review of Procedures for Purchases Not Exceeding $5,000

Procedure - Obtained a copy of the institution of higher education guidelines and procedures established by the CPO for purchases not exceeding $5,000 and determined whether the procedures and any modifications had been filed with the Vice Chancellor for Administration.


8. Test Selected Procurement Transactions Not Exceeding $5,000

Procedure - Reviewed 20 procurement transactions under the $5,000 limit to evaluate compliance with the institution of higher education’s internal control policies and procedures, the West Virginia Higher Education Purchasing Procedures Manual, and the applicable sections of the West Virginia State Code.


9. Test Selected Procurement Transactions Exceeding $5,000 But Not Exceeding $25,000

Procedure - Reviewed 20 procurement transactions between $5,001 and $25,000 to evaluate compliance with the institution of higher education’s internal control policies and procedures, the West Virginia Higher Education Purchasing Procedures Manual, and the applicable sections of the West Virginia State Code.

Results - Two items noted, see 2003-1.

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10. Test Selected Procurement Transactions Exceeding $25,000

Procedure - Reviewed 30 procurement transactions greater than $25,000 to evaluate compliance with the institution of higher education’s internal control policies and procedures, the West Virginia Higher Education Purchasing Procedures Manual, and the applicable sections of the West Virginia State Code.

Results - One item noted, see 2003-2.

11. Test Selected Procurement Transactions Exceeding $15,000

Procedure - Reviewed 40 procurement transactions greater than $15,000 to evaluate compliance with the Attorney General and State Auditor’s Office requirements.

Results - Two items noted, see 2003-3

12. Test Selected Special Procurement Transactions

Procedure - Reviewed 20 special procurement transactions which are defined as sole/single source procurement contracts, emergency contracts, motor vehicle contracts, open-end contracts, and professional service contracts to evaluate compliance with the institution of higher education’s internal control policies and procedures, the West Virginia Higher Education Purchasing Procedures Manual, and the applicable sections of the West Virginia State Code.


13. Test for Potential Stringing

Procedure - Utilizing data extraction software, reviewed all purchase orders issued during the fiscal year ended June 30, 2003 for potential stringing.


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14. Test Selected Complaints, Protests, and Reconsiderations

Procedure - Reviewed for complaints, protests, and reconsiderations filed during the period of review to evaluate compliance with the institution of higher education’s internal control policies and procedures, the West Virginia Higher Education Purchasing Procedures Manual, and the applicable sections of West Virginia State Code.

Results - There were no complaints, protests, or reconsiderations during the review

period. 15. Test Selected Vendor Suspensions

Procedure - Reviewed for vendors suspended during the period of review to evaluate compliance with the institution of higher education’s internal control policies and procedures, the West Virginia Higher Education Purchasing Procedures Manual, and the applicable sections of West Virginia State Code.

Results - There were no vendor suspensions during the review period.

16. Review Receiving and Inventory Procedures

Procedure - Obtained a copy of the institution of higher education guidelines and procedures for receiving and distributing materials, supplies, equipment, services, and printing to departments and offices and reviewed the procedures to evaluate compliance with the West Virginia Higher Education Purchasing Procedures Manual and the applicable sections of West Virginia State Code.


17. Review Inventory Dispositions

Procedure - Reviewed 20 dispositions of surplus equipment, supplies, and materials to evaluate compliance with the institution of higher education’s internal control policies and procedures, the West Virginia Higher Education Purchasing Procedures Manual, and the applicable sections of West Virginia State Code.


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18. Review Prompt Payment Act Procedures

Procedure - Obtained a copy of the institution of higher education guidelines and procedures for administering the requirements of the West Virginia State Code Prompt Payment Act to evaluate compliance with the West Virginia Higher Education Purchasing Procedures Manual and the applicable sections of West Virginia State Code.


19. Review Selected Transactions for Compliance with Prompt Payment Act

Procedure - Reviewed 20 invoices paid during the period of review to evaluate compliance with the requirements of the West Virginia State Code Prompt Payment Act.

Results - Two items noted, see 2003-4.

20. Review Annual Report to Vice Chancellor

Procedure - Reviewed the annual prescribed report submitted to the Vice Chancellor for Administration and subsequently to the Finance Committees of the House of Delegates and the Senate to evaluate compliance with the requirements of the filing.


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2003-1 Procurement - Purchase Orders Criteria: Section 3.5.2 of the West Virginia Higher Education Purchasing Procedures

Manual states that, “when a need develops to purchase goods or services, a requisition should be prepared and forwarded to the institution’s Purchasing Department with the required approval of the originating department.”

Condition: For two of the seventy purchase orders selected for testing, we found that the

originating department authorized the purchase of goods or services without preparing a requisition and forwarding it to the purchasing department.

Context: The amounts of the transactions were $25,000 and $6,677, respectively. The

total number of purchase orders issued during the fiscal year ended June 30, 2003 was approximately 2,200 in the amount of approximately $41,800,000. The total amount tested was approximately $16,700,000. The total non-payroll related expenditures for the fiscal year ended June 30, 2003 were approximately $37,000,000. The University has procedures in place in the event that an originating department makes a purchase prior to obtaining an approved purchase order. The procedures require the department to write a letter of justification that must be approved by the Vice President of Finance before payment for the goods or services will be made. In both of the instances noted above, these procedures were followed.

Effect: The originating department obligated University funds prior to receiving the

proper approval. Cause: The originating department did not follow the University’s purchasing

procedures. Recommendation: We recommend that the University continue to monitor the various

departments and attempt to minimize the number of purchases authorized without proper approval. Furthermore, we recommend that the University continue to follow their procedures for processing “after-the-fact” purchase orders.

Agency’s Comments /Corrective Action:

We agree with the recommendation and will continue to apply University policy regarding "after-the-fact" purchases. Emphasis will continue to be placed on this issue in the various training classes which Purchasing conducts. From time-to-time reminders will also be issued to departments via the University intranet.

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2003-2 Procurement - Late Bid Criteria: Section 133-30-8 of Title 133, Procedural Rule for the West Virginia Higher

Education Policy Commission states that “bids shall be delivered to the specific location for receipt of the bids by the bidder prior to the date and time of the bid opening according to the instruction contained in the request for bids and any addenda or modifications officially issued.” Further, “bids not properly delivered or received after the required time and date shall not be opened and shall be returned to the bidder.”

Condition: For one of the seventy transactions tested, we noted that one bid was

received and opened after the required time and date as established in the bid request.

Context: The amount of the purchase order awarded was $36,000. The total number of

purchase orders issued during the fiscal year ended June 30, 2003 was approximately 2,200 in the amount of approximately $41,800,000. The total amount tested was approximately $16,700,000. The total non-payroll related expenditures for the fiscal year ended June 30, 2003 were approximately $37,000,000. The bidder erroneously delivered the bid to the receiving department and it did not arrive at the procurement office until after the time and date established by the bid request; however, the late bid was not awarded the contract and was not the lowest responsible bidder.

Effect: The University did not follow the requirements of the Procedural Rule for

the West Virginia Higher Education Policy Commission. Cause: The buyer who opened the bid felt that the bid should be considered since

the University’s receiving department received it before the time indicated in the request for bids; however, the request for bid indicated that it must be delivered to the procurement office to be accepted.

Recommendation: We recommend that all bids not physically in the purchasing office before

the bid opening be sent back to the bidder unopened in accordance with Procedural Rule for the West Virginia Higher Education Policy Commission.

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2003-2 Procurement - Late Bid (Continued) Agency’s Comments /Corrective Action:

We request that some consideration be given for exceptional situations. Many bids are sent via FedEx and UPS. Sometimes they are delivered directly to Purchasing. At other times they go through Central Receiving due to an incomplete delivery address--missing building and room number, for example. While we cannot recall more than two such instances in the last fifteen years, we would like to have the option of accepting a bid that may not have been delivered properly for reasons over which the bidder had no control. Although the "late" bid has never been the low bid, we feel there can be extenuating circumstances where reasonable judgment should be used in the best interests of the University.

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2003-3 Procurement - State of West Virginia Encumbrance of Contract Criteria: Section 6.3.3 of the West Virginia Higher Education Purchasing Procedures

Manual states: “A contract that exceeds $15,000 shall be filed with the State Auditor” Furthermore, Section 7.3 of the West Virginia Purchasing Division’s Policies and Procedures Handbook states: “The Purchasing Division’s Administration Unit encumbers all purchase orders executed by the Purchasing Division over $10,000 and all purchase orders executed by Higher Education (colleges and universities) over $15,000.”

Condition: For two of the forty transactions reviewed over $15,000, the University did

not obtain an official encumbrance from the State of West Virginia Purchasing Division.

Context: The total contracts were in the amount of $474,352 and $27,731,

respectively. The total number of purchase orders greater than $15,000 issued during the fiscal year ended June 30, 2003 was approximately 255 in the amount of approximately $36,000,000. The total amount tested was approximately $16,500,000. The total non-payroll related expenditures for the fiscal year ended June 30, 2003 were approximately $37,000,000.

Effect: The contracts were not encumbered in accordance with the West Virginia

Higher Education Purchasing Procedures. Cause: Management of the University did not think that contracts with the

Government Service Agency required encumbrance by the State of West Virginia Purchasing Division.

Recommendation: We recommend that the University ensure that all contracts in excess of

$15,000 are encumbered in accordance with the West Virginia Purchasing Division and filed with the West Virginia State Auditor’s Office. Purchases that are exempted from this requirement should be documented in the University’s purchasing policies and procedures.


"State Purchasing and the Auditor's Office exempts open-end contracts releases from the encumbrance process. Because GSA contracts are also open-end contracts, neither Purchasing nor the Auditor have required them to be encumbered. However, we will contact the Auditor's Office for a definitive answer on this issue and will then incorporate that into University purchasing policies and procedures."

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2003-4 Procurement - Prompt Payment of Vendors Criteria: Section 11.2.2 of the West Virginia Higher Education Purchasing Procedures

Manual states: “An institution receiving a legitimate uncontested invoice shall process the invoice within ten working days from its receipt.”

Condition: For two of the twenty transactions tested, the uncontested vendor invoices

were not processed within ten working days from their receipt. Context: The first vendor invoice was $59,690 and was processed in approximately

eighteen business days. The second vendor invoice was $4,362 and was processed in approximately twelve business days. The total number of vendor payments processed during the fiscal year ended June 30, 2003 was approximately 21,000 in the amount of approximately $37,000,000. The total amount tested was approximately $550,000.

Effect: In these instances, the University is not in compliance with the section of the

Prompt Payment Act that states the agency must process the invoice to the Auditor within 10 days of receipt of a legitimate, uncontested invoice.

Cause: Both delays were due to the newly required receiving report not being

forwarded to the accounting department in a timely manner. Furthermore, both delays were within the first month of when the receiving report requirement was mandated by the State of West Virginia. Subsequent to this period, the University initiated the use of an electronic receiving report which appears to have addressed the timely payment of invoices.

Recommendation: We recommend that the University continue to monitor the completion and

timeliness of the electronic receiving report and ensure that all uncontested vendor invoices are paid within ten working days.


We agree with the recommendation. Procedures are in place for ongoing review and monitoring of these situations.

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PURCHASING CARD COMPLIANCE AND INTERNAL CONTROL To satisfy the purchasing card objective noted above, we performed the following procedures: 1. Review Purchasing Card Policies and Procedures

Procedure - Obtained and reviewed the institution of higher education’s purchasing card program’s policies and procedures and obtained an understanding of the internal controls over the purchasing card program during the period of our review.

Results - Two items noted, see 2003-5 and 2003-6.

2. Review Prior Purchasing Card Audits

Procedure - Obtained a copy of the State Auditor’s Office purchasing card audit conducted during the period of our review and noted any items of audit significance.

Results - Four items noted, see 2003-7.

3. Test Selected Cardholders

Procedure - Obtained a detail listing of the institution of higher education cardholders, transaction limits, and transactions for the period, and tested 40 cardholders to evaluate whether the cardholder was eligible to be assigned a purchasing card, whether transaction limits assigned to each cardholder were adhered to for individual transactions, and whether a cardholder agreement was signed and on file at the institution of higher education.


4. Test for Potential Stringing

Procedure - Utilizing data extraction software, reviewed all purchases made with purchasing card during the fiscal year ended June 30, 2003 for potential stringing.

Results - Fifty-five items noted, see 2003-9.

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5. Test Selected Purchasing Card Transactions

Procedure - Reviewed 40 purchasing card transactions to evaluate compliance with the institution’s internal control policies and procedures, State Auditor’s Office Purchasing Card Policies and Procedures, and the applicable sections of the West Virginia Code.

Results - Four items noted, see 2003-10 and 2003-11.

6. Test Purchasing Card Transactions for Utilities

Procedure - Obtained a detail listing of purchasing card transactions issued for payment of utilities and scanned the detail to note whether any unusual or non-utility related purchases were made.


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2003-5 Purchasing Card - Approval of Transactions Criteria: Section 12.2 of the West Virginia State Auditor’s Office Purchasing Card

Policies and Procedures, states in part that the internal control structure must provide, “assurance that each transaction is for official state business.” Furthermore, the University purchase card manual states, “…Supervisors are encouraged to review card holder statements with the individual cardholders after the fact…” In addition, an integral part of an entity’s internal control structure is effective segregation of duties, which involves assigning responsibilities for authorizing transactions, recording transactions and maintaining custody of assets to different individuals, thus reducing the risk of errors, irregularities or defalcations occurring and not being detected.

Condition: There is no formal supervisor or department head review of specific

purchases/transactions made by cardholders other than the review made by the purchasing card coordinator.

Context: The total number of purchasing card payments processed during the fiscal

year ended June 30, 2003 was approximately 19,800 in the amount of approximately $3,900,000. The total non-payroll related expenditures for the fiscal year ended June 30, 2003 were approximately $37,000,000.

Effect: Purchases that are not formally approved by the supervisor or department

head cannot be effectively reviewed by the purchasing card coordinator for departmental use and appropriateness; therefore, a purchase may be made for other than official state business and not be detected.

Cause: The University does not require a formal supervisor or department head

review of specific purchases/transactions. Recommendation: We recommend that the University review the internal control structure and

develop policies and procedures that require a formal or department head review for all purchasing card transactions.


We agree with the recommendation. Previously the University’s procedures advised supervisors to review purchase card activity but did not require a formal review. Procedures are now in place for formal review of all purchase card transactions by supervisors.

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2003-6 Purchasing Card - Defaulted Items/Lack of Policies and Procedures Criteria: Section 7.0 of the West Virginia State Auditor’s Office Purchasing Card

Policies and Procedures states in part that: “Documentation must be obtained for each transaction placed on the purchasing card and must be available upon request by the Purchasing Card Program. Documentation will include itemized receipts, log sheet, individual statements, and any other documentation required by Purchasing Card Policies and Procedures or other purchasing guidelines.” Furthermore, management is responsible for establishing an internal control structure which ensures adequate documentation exists to support transactions.

Condition: Defaulted items are transactions for which the cardholder has not remitted

the proper documentation to the purchasing card coordinator for final approval of the transaction. We reviewed the defaulted items report for the fiscal year ended June 30, 2003, and as of the date of our fieldwork, the University did not have supporting documentation for $49,103 in purchasing card transactions made during the fiscal year. Furthermore, management did not have policies and procedures in place during the fiscal year to follow-up, resolve and/or seek disciplinary action for cardholders in noncompliance.

Context: The total defaulted items reported as of the date of our fieldwork totaled

$49,103. Total expenditures utilizing the purchasing card for the fiscal year ended June 30, 2003 were approximately $3,900,000.

Effect: Policies and procedures did not exist during the fiscal year to follow-up and

resolve noncompliance with the purchasing card program and documentation does not exist to support $49,103 in purchasing card transactions during the fiscal year.

Cause: The University did not have policies and procedures in place during the

fiscal year to follow-up, resolve and/or seek disciplinary action for cardholders in noncompliance; however, subsequent to the fiscal year end, the University did establish policies and procedures.

Recommendation: We recommend that the University follow the policies and procedures put in

place subsequent to the fiscal year end to follow-up and resolve any potential noncompliance in the purchasing card program.

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2003-6 Purchasing Card - Defaulted Items/Lack of Policies and Procedures

(Continued) Agency’s Comments /Corrective Action:

We agree with the recommendation. Subsequent to the fieldwork, supporting documentation has been received for substantially all of the transactions originally identified. Cardholders and/or departments have verified the purchases made. Receipts or confirmation of the charge have not been obtained on approximately $50 of the items originally identified but efforts will continue to obtain the required information where possible. The university now has procedures in place to follow up on missing documentation and take appropriate action in a timely manner.

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2003-7 Purchasing Card - West Virginia State Auditor’s Office Review Criteria: Section 13.0 of the West Virginia State Auditor’s Office Purchasing Card

Policies and Procedures states in part that: “Random audits of purchasing card transactions will be conducted to ensure compliance with all Purchasing Card Policies and Procedures.”

Condition: The West Virginia State Auditor’s Office conducted a review during the

fiscal year and noted the following instances of noncompliance: • Restricted items - The review revealed several payments for items that

are prohibited by the Purchasing Card Policies and Procedures. • Card security - The review revealed several instances where more than

one person was authorizing transactions using the same purchasing card. • Stringing of purchases - The review revealed instances in which

invoices were split and processed as separate transactions. • Tax charged - The review revealed instances in which sales tax was

being charged for payments made to in-state vendors. Context: The total number of purchasing card payments processed during the fiscal

year ended June 30, 2003 was approximately 19,800 in the amount of approximately $3,900,000.

Effect: The University may be in noncompliance with certain sections of the West

Virginia State Auditor’s Office Purchasing Card Policies and Procedures. Cause: Management provided specific responses which were incorporated into the

West Virginia State Auditor’s Office report. Recommendation: We recommend that the University follow the recommendations included in

the West Virginia State Auditor’s Office report. Agency’s Comments /Corrective Action:

We agree with the recommendation. Procedures are in place for ongoing review and monitoring for correcting instances of Restricted Items, Stringing of purchases and paying tax. Ongoing training and reminders are used to reinforce policies and procedures on card security and all others.

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2003-8 Purchasing Card - Eligibility Criteria: Section 3.3 of the West Virginia State Auditor’s Office Purchasing Card

Policies and Procedures states that: “The agency purchasing card coordinator is required to maintain a copy of the Cardholder Agreement Form.”

Condition: For one of the forty cardholders tested for eligibility, the individual

cardholder agreement was not on file at the University. Context: Total purchases by the cardholder for the fiscal year ended June 30, 2003

were $402. The total number of purchasing card payments processed during the fiscal year ended June 30, 2003 was approximately 19,800 in the amount of approximately $3,900,000.

Effect: The University is not in compliance with the West Virginia State Auditor’s

Office Purchasing Card Policy identified above. Cause: Management indicated that the cardholder agreement was mistakenly

destroyed when the cardholder turned in the card. Recommendation: We recommend that the University ensure that all required documentation is

maintained in accordance with the West Virginia State Auditor’s Office Purchasing Card Policies and Procedures.


We agree with the recommendation.

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2003-9 Purchasing Card - Potential Stringing Criteria: Section 6.1 of the West Virginia State Auditor’s Office Purchasing Card

Policies and Procedures states in part that: “The purchasing card may be used to make payments for goods and designated services that do not exceed the current transaction limit.” Furthermore, Section 6.3 of the West Virginia State Auditor’s Office Purchasing Card Policies and Procedures defines stringing as, “The intentional manipulation of the ordering, billing, or payment process in order to circumvent the transaction limit.”

Condition: Utilizing data extraction software, we reviewed all purchases during the

fiscal year ended June 30, 2003 and noted 55 instances of purchases made on the same day, with the same vendor, by the same cardholder with multiple purchases which appeared to allow the purchase to not exceed the cardholder’s credit transaction limit.

Context: The total number of identified potential stringing instances were 55 out of a

total number of purchasing card transactions of approximately 19,800 for the fiscal year ended June 30, 2003. In all of these instances the purchases if combined would have exceeded the cardholder’s credit transaction limit.

Effect: Cardholders may be splitting transactions to bypass the credit transaction

limit and internal control structure established by the University. Cause: Cardholder credit transaction limits may not be sufficient to carry out the

day-to-day purchases necessary for the cardholder. Recommendation: With the recent revision of the credit transaction limits by the West Virginia

State Auditor’s Office, we recommend that the University review the assigned credit transaction limits for reasonableness. Furthermore, periodic reviews should be conducted to determine the reasonableness of the credit transaction limits and to determine if cardholders are abusing the established limits.


We agree with the recommendation. Procedures are in place to review monthly transactions for stringing and take appropriate action. Transaction limits have been reviewed and increased as needed.

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2003-10 Purchasing Card - Allowability Criteria: Section 6.9 of the West Virginia State Auditor’s Office Purchasing Card

Policies and Procedures states in part that: “The State of West Virginia is tax exempt and should not pay tax to in-state vendors.” Furthermore, Section 7.1 of the West Virginia State Auditor’s Office Purchasing Card Policies and Procedures states in part that: “An itemized receipt must be obtained for each transaction placed on the card.”

` During our review of the allowability of transactions tested, we noted the

following: • For one of the forty transactions tested, we noted one instance where

sales tax was paid for a transaction with an in-state vendor. • For one of the forty transactions tested, management was unable to

provide a receipt to document one purchasing card transaction. Context: The amount of sales tax paid for the one transaction was less than $5. The

amount of the purchase with no receipt/documentation was $261 and was included in the defaulted items report. The total amount tested was approximately $6,500. The total number of purchasing card payments processed during the fiscal year ended June 30, 2003 was approximately 19,800 in the amount of approximately $3,900,000. The total non-payroll related expenditures for the fiscal year ended June 30, 2003 were approximately $37,000,000.

Effect: Purchases that include sales tax from in-state vendors are not in compliance

with the West Virginia State Auditor’s Office Purchasing Card Policies and Procedures and there is no substantiation to support the allowability of the transaction with a missing receipt.

Cause: The cardholder did not inform the vendor that the transaction was tax exempt

for the transaction. The cardholder did not submit the receipt/documentation for the other transaction.

Recommendation: We recommend that the University re-emphasize the purchasing card

requirements and establish a procedure that monitors error rates made by cardholders to determine if further training is needed or if action is necessary with regard to a specific cardholder.


We agree with the recommendation. Procedures are in place to monitor and ongoing training and reminders are offered to improve follow-up.

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2003-11 Purchasing Card - Restricted Items Criteria: Section 6.6 of the West Virginia State Auditor’s Office Purchasing Card

Policies and Procedures states that: “Payment for the following items may not be made using the purchasing card: Travel Related Expenses…”

Condition: We scanned the detail of purchasing card transactions for the fiscal year

ended June 30, 2003 and noted two purchases for travel related expenses. Context: The purchases were made to the Hyatt Hotel in the amounts of $849 and

$628, respectively. The total number of purchasing card payments processed during the fiscal year ended June 30, 2003 was approximately 19,800 in the amount of approximately $3,900,000.

Effect: The transactions are not in compliance with the West Virginia State

Auditor’s Office Purchasing Card Policy identified above. Cause: Management was unable to provide a cause. Recommendation: We recommend that the University re-emphasize the purchasing card

requirements and establish a procedure that monitors error rates made by cardholders to determine if further training is needed or if action is necessary with regard to a specific cardholder.


We agree with the recommendation. Cardholder has reimbursed the total cost of these expenses and no longer has a purchasing card. Procedures are in place for monitoring transactions and ongoing training and reminders are offered to keep cardholders informed.

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PERFORMANCE AUDIT To satisfy the performance audit objective noted above, we performed the following procedures: 1. Compare Procedures to Identified Best Practices

Procedures - Obtained and reviewed the purchasing procedures of the institution of higher education and compared these procedures to other institutions of higher education in West Virginia and best practice procedures as defined by the National Association of Educational Buyers, Center for Advanced Purchasing Services, and the National Institute of Governmental Purchasing, Inc.

Results - Five items noted, see 2003-12 through 2003-16.

2. Compare Staffing Levels to Benchmarks

Procedures - Reviewed the staffing levels and other key benchmarks for the purchasing program at the institution of higher education and compared these benchmarks to other institutions of higher education in West Virginia and information available from the Center for Advanced Purchasing Services.

Results - Six items noted, see 2003-17 through 2003-20.

3. Review Procedures for Efficiency and Accountability

Procedures - Reviewed the purchasing function processes and procedures to make recommendations regarding potential improvements in efficiency and accountability at the institution of higher education level and at the system-wide level.

Results - Eight items noted, see 2003-12, 2003-14, 2003-15, 2003-21, and 2003-25.

4. Review for Factors Inhibiting Performance

Procedures - Reviewed the purchasing function processes and procedures to identify factors that may inhibit satisfactory performance of the purchasing program.

Results - Four items noted, see 2003-19 and 2003-22 through 2003-24.

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5. Review Procedures, Laws, and Regulations to Identify Additional Flexibility

Procedures - Reviewed the purchasing function policies and procedures, the West Virginia Higher Education Purchasing Procedures Manual, and West Virginia State Code, to identify additional flexibility in purchasing rules, policies, procedures and state law that could potentially improve efficiency and execution of the purchasing program.


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2003-12 Purchasing Card - Alternate Information System Benchmark/Criteria Section 8.2 of the West Virginia State Auditor’s Office Purchasing Card

Policies and Procedures Manual states that: “Small Transaction Accounting and Reporting System (STARS) is an electronic reconcilement software available to assist with the reconcilement process.”

Condition: Currently, the University utilizes the State of West Virginia’s STARS

software program as the electronic reconcilement software for their purchasing card reconciliation process. While this software accomplishes the reconciliation process, there may be more effective software that would permit daily reconciliation and auditing of the purchasing card transactions.

Context: According to information provided by the West Virginia State Auditor’s

Office Purchasing Card Program Administrator, the Pathways software utilized by West Virginia University provides for a more efficient daily reconciliation and auditing of the purchasing card transactions.

Effect: Utilizing a more efficient software and more enhanced technology could

result in a more efficient and timely purchasing card reconciliation and review by the University.

Cause: The University currently utilizes the STARS software program which may

be less effective than other software programs available. Recommendation: Given the volume of purchasing card transactions and the geographic layout

of the University’s campuses, we recommend that the University investigate the utilization of the Pathways software program. Any review should be coordinated with the West Virginia State Auditor’s Office.

Agency’s Comments:

We agree with the recommendation that appropriate software would benefit the University’s purchase card program. The recommendation of software that does not provide budget checking or security without duplication of effort or additional programming is not a direction the University believes we should pursue. A project is currently underway to review and implement a module of purchase card management software already owned as part of the University’s overall financial system without purchasing additional software packages.

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2003-13 Procurement - Utilization of Alternate Purchasing Methods Benchmark/Criteria West Virginia State Code Section 18B-5-9(3) states that the emergency rule

issued shall, “provide for institutions individually or cooperatively to maximize their use of any of the following purchasing practices that are determined to provide a financial advantage: (1) Bulk purchasing; (2) Reverse bidding; (3) Electronic marketplaces; and Electronic remitting.”

Condition: The institutions of higher education are not taking full advantage of alternate

purchasing methods as provided for under West Virginia State Code. Furthermore, information such as quantities of items purchased are not readily available to determine the “purchasing power” that the consortium of institutions of higher education can utilize with alternative purchasing methods.

Context: The institutions of higher education represent a combined “purchasing

power” of approximately $95,000,000. Although a large portion of these purchases may not qualify for an alternate purchasing method, a 10 percent savings on a small amount of this “purchasing power” could still result in a substantial reduction of cost. Surveys conducted by the Center for Advanced Purchasing Services have identified the potential for measurable direct cost reductions of purchased goods and services in the range of 10 to 20 percent. In addition, the U.S. General Services Administration has noted that several federal agencies have experienced savings of 12 to 48 percent.

Cause: Until recently there appears to have been insufficient coordination on the

part of the institutions of higher education throughout West Virginia to ensure the maximization of purchasing power. Furthermore, budget constraints, training and investment in technology by the State of West Virginia has been limited in the procurement area.

Recommendation: We recommend the institutions of higher education work with the central

office and devote the necessary resources to the new implementation task force to review the potential for alternate purchasing methods. Alternate purchasing methods of key importance include bulk purchasing, reverse bidding, and e-procurement through a centralized purchasing function (shopping cart) process. This task force should be sufficiently funded, and should develop a strategic plan for the implementation and use of alternate purchasing methods. Furthermore, this task force should draft policy to be approved by the West Virginia Higher Education Policy Commission to ensure full utilization and cooperation from all the State’s institutions of higher education. In addition, we recommend that the capabilities of the Banner software be fully utilized to capture relevant data such as quantities of items purchased so that additional information is available for use in alternate purchasing methods.

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2003-13 Procurement - Utilization of Alternate Purchasing Methods (Continued) Agency’s Comments:

We agree with the recommendation. The Director of Purchasing is currently participating on the two alternative purchasing committees established by the Higher Education Policy Commission (HEPC) Central Office. We will continue to work with the Central Office on this initiative.

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2003-14 Procurement - Central Website Benchmark/Criteria West Virginia State Code Section 18B-5-9(3)(f) states: “Each institution

shall establish a consortium with at least one institution in the most cost-efficient manner feasible, to consolidate the following operations and student services:…(7) Any other operation or service appropriate for consolidation as determined by the commission.”

Condition/Context: Currently, the various institutions of higher education maintain individual

websites with a variety of information related to the procurement process. Information that varies by website includes purchasing policies and procedures, current contracts available, statewide contracts available, resource links to additional purchasing resources, etc. The total cost and time of maintaining each individual website is currently not available.

Recommendation: The establishment of a central website could enhance the procurement

process users’ ability to access procurement related information at one location. Furthermore, centralizing the maintenance of the majority of the website content will reduce time and effort as duplicated processes will be minimized. In addition, more current and up-to-date information can be made available in a timely manner. We recommend that the institutions of higher education work with the central office and consider establishing one centralized website for all higher education procurement functions in the State. At a minimum, the website should include the procurement policies and procedures, standardized forms, statewide contracts available, higher education contracts available, and links to additional resources. In addition, the website could be utilized to post bid notices and awards which could reduce the time and cost of mailing information to potential users. Further, if established, this website should be maintained daily and all users of the procurement function should be informed of the benefits and how to use the site.


We agree with the recommendation. Purchasing currently has a website that makes bids available to vendors, lists open-end contracts available to departments, and provides for detailed policies and procedures. Further action on a central website for all institutions will require Central Office leadership and funding.

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2003-15 Procurement - Notification of Available Contracts Benchmark/Criteria West Virginia State Code Section 18B-5-9(3)(f) states: “Each institution

shall establish a consortium with at least one institution in the most cost-efficient manner feasible, to consolidate the following operations and student services:…(6) Standard and bulk purchasing; and (7) Any other operation or service appropriate for consolidation as determined by the commission.”

Condition: There is no coordinated notification process being utilized to notify the

various user departments of available purchasing contracts and other procurement related information.

Context: Notification of new statewide contracts and/or other contracts available

through the institutions of higher education could minimize duplication of effort and provide users with more informative data regarding the use of the procurement process.

Effect: The establishment of a notification method could enhance the various

department’s uses of the procurement function and reduce duplicated effort. In addition, more current and up-to-date information can be made available in a more timely manner.

Cause: There is no centralized method in use of notifying individual departments of

available purchasing contracts and other procurement related information. Recommendation: We recommend that notice of all new contracts be sent to individual

departments via email. This could be accomplished through the use of a centralized website as noted previously. If properly developed, individual departments could register to receive automatic updates regarding the contracts posted to the website that may be useful for the department.


We agree with the recommendation. Purchasing will implement a contract notification process. Use of a centralized website by all institutions will be dependent upon actions taken by the Central Office.

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2003-16 Surplus Property - Internet Surplus Auctions Benchmark/Criteria Section 10.1 of the West Virginia Higher Education Purchasing Procedures

Manual establishes the policies and procedures as prescribed by West Virginia State Code Section 18B-5-7. Specifically Section 18B-5-7(a) states: “(a) The commission and the governing boards shall dispose of obsolete and unusable equipment, surplus supplies and other unneeded materials, either by transfer to other government agencies or institutions, by exchange or trade, or by sale as junk or otherwise.”

Condition/Context: Currently, most surplus property is disposed of either through a public

auction and/or through the State of West Virginia Surplus Property Division. The University should consider using alternatives such as internet auctions for certain types of disposals.

Recommendation: Data accumulated by the Center for Advanced Purchasing Studies indicates

that internet auctions for retail related items typically sell for higher dollars than other methods of disposals. Furthermore, various third-party companies can administer the internet auction such as U.S. General Services Administration, E-Bay, or Yahoo to name a few. We recommend that the University work with the central office and consider piloting an internet surplus auction.


We agree with the recommendation. The Central Office is currently reviewing the legality of on-line auctions such as E-Bay within the constraints of the State Code. Should it be determined that the institutions can dispose of surplus property in this way, the University will utilize cost benefit analysis to decide which commodities may sell at a premium.

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2003-17 Procurement - Comparison to Center For Advance Purchasing Studies

Benchmarks Benchmark/Criteria The Center for Advanced Purchasing Studies (CAPS) data provides the

following benchmarks for institutions of higher education:

• The average institution budget per professional purchasing employee is $46,130,591.

• The average purchase dollars per professional purchasing employee

is $6,129,051.

• The total professional purchasing employee head count as a percent of total institution employee head count is .31%.

Condition: Information provided by the University indicated the following:

• The average institution budget per professional purchasing employee

was less than the benchmark established by CAPS.

• The average purchase dollars per professional purchasing employee was less than the benchmark established by CAPS.

• The average total professional purchasing employee head count as a

percent of the total institution employee head count was greater than the benchmark established by CAPS.

Context: The University’s budget per professional purchasing employee was

$27,888,817, as determined by dividing the total institution budget of $195,221,720 by the total number of professional purchasing employees of 7, as reported by the University. The University’s purchase dollars per professional purchasing employee was $5,961,624, as determined by dividing the total institution purchase dollars of $41,731,365 by the number of professional purchasing employees of 7, as reported by the University. The University’s total professional purchasing employee head count as a percent of the total institution employee head count was .44%, as determined by dividing the total number of professional purchasing employees of 7 by the total institution employee head count of 1,600, as reported by the University.

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2003-17 Procurement - Comparison to Center For Advance Purchasing Studies

Benchmarks (Continued) Cause: The lower average institution budget per professional purchasing employee

may be the result of additional tasks assigned to professional purchasing employees or the purchasing process may need to be evaluated for improvements.

Recommendation: We recommend that the University monitor the additional tasks assigned to

professional purchasing employees to determine the full time equivalent professional purchasing employees to be compared with the CAPS benchmark. Furthermore, the University should monitor the process utilized to determine if improvements to the procurement process are necessary.


We agree with the recommendation. Purchasing will monitor the activities of the staff to determine the appropriate FTE of its purchasing professionals.

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2003-18 Procurement - Total Institution Purchase Dollars as a Percent of the

Total Institution Budget Benchmark/Criteria The Center for Advanced Purchasing Studies (CAPS) data indicates that for

institutions of higher education, the total institution purchase dollars as a percent of the total institution budget is 22%.

Condition: Information provided by the University indicated that their average total

institution purchase dollars as a percent of the total institution budget was less than the benchmark established by CAPS.

Context: The University’s total institution purchase dollars as a percent of the total

institution budget was 21%, as determined by dividing the total institution purchase dollars of $41,731,365 by the total institution budget of $195,221,720 as reported by the University.

Effect: The University approximates the CAPS benchmark. Cause: Purchases made by the procurement department approximate the CAPS

benchmark. Recommendation: We recommend that the University continue to monitor this average as

compared to the CAPS benchmark. Agency’s Comments:

We agree with the recommendation. Purchasing will continue to monitor this average.

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2003-19 Procurement - Training Hours and Budget Benchmark/Criteria The Center for Advanced Purchasing Studies (CAPS) data indicates that for

institutions of higher education, the average training hours per professional purchasing employee should be 39 hours per year.

Condition: The University does not have a formal training program including a budget

established for professional purchasing employees. Furthermore, the number of training hours per professional purchasing employee was less than the average benchmark per CAPS.

Context: The University indicated that there was no budget for training and that very

little training hours were provided for each professional purchasing employee. These individuals are responsible for oversight of procurement purchases of approximately $41,800,000.

Cause: Management indicated that due to reductions in funding, professional

purchasing employees have been unable to receive adequate and sufficient training to meet the CAPS benchmark.

Recommendation: Correctly administered training of professional procurement employees is an

investment in the future of the procurement department. Properly trained employees are often more aware of current policies and procedures, more efficient in their day-to-day responsibilities, are more aware of current technology enhancements in the procurement process, and may generate additional efficiencies and quality enhancements to the overall procurement process. We recommend that the University establish a formal training plan and training budget for all professional purchasing employees. This plan should be tailored to the various employees and their specialty areas to ensure maximum utilization of the training budget.


We agree with the recommendation. Severe budget limitations eliminated professional development training in FY 03. Fortunately Purchasing is blessed with a very experienced staff whose years of purchasing service at the University range from 8 to 27.

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2003-20 Procurement - Average Purchase Order Cycle Benchmark/Criteria The Center for Advanced Purchasing Studies (CAPS) data indicates that for

institutions of higher education, the average purchase order cycle time is 5.90 days for public institutions. The average purchase order cycle is the number of days from the initial requisition by the department to the issuance of a signed purchase order.

Condition/Context: Information provided by the University indicated that their average purchase

order cycle time was greater than the benchmark established by CAPS. Specifically, the University’s average purchase order cycle time was 8.87 days. This average includes all purchases that have purchase orders, including those that require formal bidding.

Recommendation: We recommend that the University monitor the length of time it takes to

complete purchase orders for both over and under $5,000 for each buyer. Furthermore, the University should monitor the process utilized to determine where the process may need improvement to improve the average purchase order cycle time.


We agree with the recommendation. Purchasing will continue to monitor the processing time.

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2003-21 Procurement - Performance Measures Benchmark/Criteria West Virginia State Code Section 18B-5-9(l)(1) requires that the

Commission, “conduct a performance audit of the policies, procedures and results of the procurement of goods and services by the state institutions of higher education.”

Condition: Currently, the University does not accumulate certain data for measuring the

performance of the purchasing process. Some information that could be maintained and tracked include, but is not limited to:

• Average purchase order processing time • Average change order processing time • Total purchasing dollars per employee • Average purchase cycle time • Average training hours per professional purchasing employee • Total purchase orders processed (by type) per employee

Context: Performance measures, when properly developed and maintained, can

strengthen the employee evaluation process, increase efficiency and effectiveness, and provide the University with a useful management tool.

Effect: By monitoring purchasing performance, trends could be identified that could

improve the effectiveness of the purchasing function. Cause: Information necessary to monitor the performance measures is not readily

available and may not be tracked in the current information systems. Recommendation: We recommend that the University develop policies and procedures for

developing and tracking at a minimum the various performance measurements identified above.


We agree with the recommendation. Purchasing will pursue this effort within the available budget and cost benefits to be derived from the process.

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2003-22 Purchasing Card - Utilization Benchmark/Criteria Section 1.2 of the West Virginia State Auditor’s Office Purchasing Card

Policies and Procedures Manual states that: “The purchasing card provides an opportunity to streamline procurement methods for small dollar transactions. The card effectively manages expenses and cuts program costs by offering agencies increased control and monitoring of payments while reducing the time and paperwork associated with the use of purchase orders.”

Condition: The University does not have procedures in place to ensure that purchasing

cards are utilized to the fullest extent. Context: According to information provided by the National Association of

Purchasing Care Professionals, the University could realize savings of approximately $101 per transaction by utilizing the purchasing card instead of the regular procurement and accounts payable process.

Effect: The University may have expended additional resources when a more

efficient method of purchasing was available. Cause: The purchasing card has not been fully utilized for allowable purchases and

small dollar transaction purchases. Recommendation: We recommend the University develop policies, procedures, and provide

training to purchasing cardholders in an effort to increase the utilization of the purchasing card. Furthermore, we recommend that the University develop a monitoring plan which includes the periodic monitoring of cardholder credit transaction limits and purchasing card utilization by cardholders in an effort to monitor necessary changes that may need to be made to increase utilization of the purchasing card.


We agree with the recommendation. The university will continue it’s training efforts. Cardholder limits were reviewed this past summer to identify areas that may need adjustment to either credit or transaction limits. Efforts will continue to identify areas where purchase card use can be expanded to take advantage of efficiencies.

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2003-23 Purchasing Card - Credit Transaction Limit Benchmark/Criteria Section 1.4 of the West Virginia State Auditor’s Office Purchasing Card

Policies and Procedures Manual states that: “The current maximum transaction limit is $5,000. Individual transaction limits will be determined by each agency purchasing card coordinator.”

Condition/Context: Currently, the credit transaction limit utilized by the University is lower than

the allowable credit transaction limit permitted by the West Virginia State Auditor’s Office. The current credit transaction limit utilized by the University is $1,000, while the transaction limit at other similar size institutions of higher education is $5,000.

Recommendation: Increased credit transaction limits could result in a reduction of time and

paperwork associated with the use of purchase orders. We recommend that the University challenge the current credit transaction limits utilized for the purchasing cards.


We agree with the recommendation. There are currently 10 cardholders granted transaction limits higher than $1,000 up to $5,000. The University is sensitive to both the efficiencies to be gained by use of the purchase card balanced against the accountability such a tool requires. As the purchase card program has evolved and expanded the reviews of the past year have provided guidance in those areas where additional controls are needed so that as transaction limits increase we are positioned to safeguard the assets of the University and the State.

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2003-24 Purchasing Card - Travel Related Expenses Benchmark/Criteria Section 6.6 of the West Virginia State Auditor’s Office Purchasing Card

Policies and Procedures Manual states that: “Payment for the following items may not be made using the purchasing card:…Travel Related Expenses…”

Condition: The West Virginia State Auditor’s Office is responsible for establishing the

general purchasing card policies and procedures as allowed for in West Virginia Code; however, employees are required to use a separate card for travel related expenses.

Context: The current procedures list travel related expenses as restricted items, thus a

separate card must be obtained for travel related expenses. Effect: If controls with the purchasing card are properly established, the use of one

card could be more effective than requiring multiple cards and/or a manual travel expense reimbursement process.

Cause: Under current state laws and rules the West Virginia State Auditors’ Office

established policies and procedures as they relate to purchasing cards. Recommendation: We recommend that the University work with the West Virginia State

Auditor’s Office in an effort to review whether travel related expenses should be an allowable purchase utilizing the purchasing card.


We agree with the recommendation. As part of the Purchase Card Advisory Committee, the University has had discussions with both the State Auditor’s Office and the purchase card provider (BB&T) about use of a single card that could incorporate travel expenses. In addition we are monitoring the current pilot projects underway that are testing a single card system. Expanding the use of the purchase card to travelers for meals and lodging without additional controls or state procedures in place to avoid inadvertent use of the card in an inappropriate manner is being closely monitored. We support continued discussion on this topic and hope this feature can be placed into service.

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2003-25 Inventory Threshold Benchmark/Criteria Section 9.2.3(a) of the West Virginia Higher Education Purchasing

Procedures Manual states in part that the Chief Procurement Officer shall: “Account for all equipment and furnishings with a value at the time of purchase of $5,000 or more per unit. An institution may elect to inventory equipment and furnishings with a value of less than $5,000 per unit.”

Condition: Currently, the University utilizes a $1,000 inventory threshold to account for

inventory purchased. Context: The University’s net capital assets reported on the audited financial

statements for the year ended June 30, 2002 was approximately $203,000,000. Total assets reported as of June 30, 2002 was approximately $311,000,000.

Effect: The University may be utilizing a threshold that is smaller than necessary,

thus requiring additional administrative work with little benefit. Cause: Management has not increased the inventory threshold to the maximum

allowed per the West Virginia Higher Education Purchasing and Procedures Manual.

Recommendation: We recommend that the University review the current inventory threshold

utilized and evaluate the cost/benefit of increasing the threshold. Agency’s Comments:

We agree with the recommendation that inventory levels continue to be monitored. In the past year, the University has reviewed the inventory threshold of $1,000 and decided to maintain this dollar threshold. The majority of computers on campus cost between $1,000 and $1,500 and we believe that maintaining an inventory of this asset may be worth the extra effort at this time. We will continue to monitor the cost/benefit of maintaining this inventory threshold.

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2003-26 Procurement - State Purchasing Encumbrance Benchmark/Criteria West Virginia State Code requires each institution of higher education

purchase order greater than $15,000 to be encumbered by the West Virginia State Purchasing Division.

Condition/Context: Currently, the institutions of higher education are required to encumber all

purchase orders greater than $15,000 through the West Virginia State Purchasing Division. Furthermore, purchasing documents are required to be filed in hard copy and electronic copy with the West Virginia State Purchasing Department. Management has indicated that the average purchase order cycle is increased by two to three days and there is no value to the added process.

Cause: Legislation currently requires the University to encumber all purchase orders

greater than $15,000 through the West Virginia State Purchasing Division. Recommendation: We recommend that the University work with the central office, the West

Virginia State Purchasing Division and the West Virginia Legislature to determine the cost/benefit of the encumbrance requirement. Furthermore, we recommend that the University work with the West Virginia State Purchasing Division to determine the value of filing both electronic and hard copy purchase order documents.


We agree with the recommendation. This particular initiative is being actively pursued by the Central Office.

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EXHIBIT A USER SURVEY RESULTS

Marshall University

Summary of Purchasing Performance Benchmarking Questionnaire Responses

Procedure - A total of 23 questionnaires were e-mailed to various departments with a response

rate of 14 or 61%. Each respondent was asked to rate the purchasing function within the University on the following criteria using a scale of 1 to 7 where 1 = poor or disagree strongly and 7 = excellent or agree strongly. Below is a summary of the average ratings received by criteria:

Questionnaire Response Summary Service How happy are you with the range of services provided

by your Purchasing Department? 6.07

How happy are you with the methods you can use to access these services? 6.07

Website Do you find the website helpful? 4.93

Is the website easy to use? 4.93

Do you find it useful for information on suppliers? 4.79

Do you find it useful for information on products? 4.64

Do you find it useful for general purchasing advice? 5.00

Confidence Are you confident in the qualifications, knowledge, experience and abilities of Purchasing staff? 6.29

Responsiveness Do you believe Purchasing staff are aware of your needs? 6.14

Do you believe Purchasing staff respond to your needs in an acceptable timescale? 6.14

Do you believe Purchasing staff put themselves out to meet your requirements? 6.17

Would you like one of the Purchasing managers to contact you to discuss this or any other issues you have raised? 14-No

Results - Responses appear to be favorable in all areas, except regarding the website. Most

respondents gave lower ratings in this area due to their lack of use of the website, since the information wasn’t always up-to-date.

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EXHIBIT B

COMPARISON TO BENCHMARKS

Comparison to Benchmarks per CAPS a. Total institution purchase dollars $41,731,365b. Total number of purchasing employees 7.00c. Total institution purchase dollars per employee (a./b.) $5,961,624d. Benchmark per CAPS $6,129,051 e. Total number of institution employees 1,600f. Total purchasing head count as a percent of total institution head count (b./e.) 0.44%g. Benchmark per CAPS 0.31% h. Total institution purchase dollars $41,731,365i. Total institution budget $195,221,720j. Total institution purchase dollars/total institution budget dollars (h./i.) as a percent 21%k. Benchmark per CAPS 22% l. Average purchase cycle time for institution 8.87m. Benchmark per CAPS 5.9 n. Total institution budget dollars per purchasing employee (i./b.) $27,888,817o. Benchmark per CAPS $46,130,591 p. Average number of training hours per professional purchasing employee very littleq. Benchmark per CAPS 39

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