Public reports pack Thursday 09-Jul-2015 19.00 Corporate Committee

Internal AuditReport 2014/2015Page 42FINAL7) Purchasing before Oracle 12’s implementation – operating effectivenessFindingOpen purchase order reportsPrior to the migration to Oracle 12, a report listing all open purchase orders was sent to managers that staffclose purchase orders which were no longer needed.We selected a sample of two months between April 2014 and July 2014 and examined email correspondence toconfirm that these reports had been sent out. We noted the following operating effectiveness issue:In 1/2 months, no open purchase order report was sent out for review.Upon investigation, this was because an exercise had taken place to close all open purchase orders which werenot needed before year end. This was done at a time when Lambeth Living had expected to migrate betweenOracle 11i and Oracle 12. When the migration was delayed, management decided not to continue sending thesereports until the migration took place.Cut-over periodDuring the period when Lambeth Living’s did not have access to Oracle 11i or Oracle 12, known as the “cut-overperiod”, a process was put in place to allow CHAPS payments to be made to pay invoices which required urgentpayment. This process was used to make eight payments. Those invoices paid were then to be uploaded toOracle to ensure that duplicate payments could not be made.We examined a sample of the two payments made during the cut-over period to verify that the invoice had beenincluded on Oracle 12 to prevent duplicate payments. We noted the following control operating effectivenessissue:1/2 invoices paid with value £6,624 had not been uploaded to Oracle 12. When brought tomanagement’s attention, they requested that the invoice was added to the payables ledger andconfirmed no duplicate payment had been made. Management were unable to confirm why this was notrecorded on the ledger.ImplicationsPayments may be made for goods or services not required or received if open purchase orders are not reviewedand closed.Duplicate payments may be made if invoices paid during the cut-over period are not recorded on Oracle 12.Internal audit report forLambeth Living Limited PwC 14