SD10 - A Study of Electronic Commerce: Auditability and Obstacles


Executive Summary:
We have determined that audits of public accounts can satisfactorily occur in an environment using electronic procurements, contracts, and transactions.

We identified several statutory and regulatory obstacles that are contained within this report. The success of e-commerce relies on addressing these obstacles. Some of the recommendations are as follows:

• The Secretary of Technology must establish information technology guidelines and standards for agencies to follow when implementing ecommerce.

• The General Assembly should re-evaluate the assessing of fees when citizens pay taxes, licenses, and other revenues by credit card, particularly where agencies can demonstrate that the use of credit cards can reduce administrative costs.

• The General Assembly may wish to determine if the Virginia Freedom of Information Act should provide additional protection of credit card information.

• The Virginia Public Procurement Act provides policy statements, such as encouraging competition and facilitating small business participation, The General Assembly should determine the most appropriate action to take concerning these policies in light of e-commerce.

• The Departments of General Services and Accounts should update their manuals to allow for the use of e-commerce.

• Agencies should recognize the need for continuous training of managers and internal auditors on e-commerce and the changes in business processes and internal controls that can result.

• To successfully implement the Commonwealth's e-procurement solution, there is a need to: develop data integrity, authentication and non-repudiation controls; mandate that agencies transfer purchase data to the central data warehouse; and include EDI as a payment method within the e-procurement system.

Senate Joint Resolution 72 required our office to study electronic commerce to:

• Determine whether audits of public accounts can be satisfactorily conducted using electronic procurements, contracts and transactions; and, Identify any statutory or regulatory barriers or obstacles, which may prevent the implementation of electronic contracting and electronic procurement processes that are envisioned for the Commonwealth.