Procurement Internal Controls Audit Work Program

Written by Administrator

Wednesday, 19 August 2009 03:09

This sample work program can be downloaded and reviewed for ideas and comparison with your own work programs. Audit Step 1. Are purchase orders based on authorized requisitions? 2. Are purchase orders properly coded to identify the cost objective (direct, indirect or inventory)? 3. Are purchase orders serially controlled and accounted for? 4. Is the use of standardized purchase orders required? 5. Are effective numerical document controls or status reports maintained to record the receipt of purchase requisitions? 6. Does the purchasing department maintain specifications for all materials and services used by the contractor? 7. Are requirements combined where appropriate? 8. Are make-or-buy decisions adequately documented? 9. Does the purchasing department have adequate controls to prevent unauthorized use of canceled or voided purchase requisitions? 10. Is the purchasing department independent of other departments and responsible for procuring all materials, supplies, and equipment? 11. Are the receiving and inspection functions separate from the purchasing function? 12. Are copies of purchase orders furnished at the time of issuance to the receiving, accounts payable, and when appropriate, to the expediting departments? 13. Do procedures require complete history files for items purchased frequently and for all major procurements? 14. Are prices established at the time the order is placed for goods manufactured to order, rather than on an "advise price" or not-to-exceed basis? 15. Is purchasing required to develop and maintain lists of potential bidders or offerers for particular types of materials? 16. Are periodic independent checks made to verify existence of suppliers on the bidder list? 17. Is documentation required from engineering, quality or the requesting source to support the purchase from a single or directed source? 18. Do procedures require maintenance of adequate documentation in purchase order files? 19. Is there a formal bid control system in place? 20. Do procedures require appropriate justification when the low bidder in a competitive solicitation is not selected? 21. Are there clearly defined responsibilities for negotiating price and terms and conditions? 22. Are practices in place to assure procurement at competitive prices including development of purchase requirements to achieve maximum competition? 23. Do non-competitive procurements require documented justification? 24. Is certified cost and pricing data obtained from subcontractors when required and is appropriate price analysis or cost analysis performed? 25. Is a listing of debarred suppliers maintained and checked against potential and existing suppliers? 26. Is there a supplier performance rating system that evaluates price, quality, and delivery performance? 27. Does a system exist to "flow down" required clauses? 28. Are subcontractors reviewed for clauses which conflict with provisions of the prime contract (i.e., pricing and payment, patent rights, warranty, quality technical data, quality assurance requirements, etc.)? 29. Are processes in place to monitor subcontractors with progress payments? 30. Is approval of subcontracts obtained or notice and consent obtained when required? 31. Do procedures require that prompt payment discounts be obtained and utilized? 32. Do procedures prohibit splitting orders to avoid dollar thresholds for approval, cost analysis, cost accounting standards and submission of cost or pricing data? 33. Are delivery dates required on purchase requisitions? 34. Is the purchasing department required to follow-up on orders to assure timely delivery? 35. Do procedures require final purchasing packages to be reviewed by appropriate personnel? 36. Are approval levels defined for purchase orders and supplements to purchase orders? 37. Do competitive pricing policies exist for inter-entity orders? 38. Are inter-entity transactions handled in accordance with company policy? 39. Is there a system of reports and controls that reflects performance and provides the means through which the purchasing organization reports its performance to management? 40. Is receiving or giving gratuities, favors, or kickbacks prohibited? 41. Are there awareness programs to advise purchasing personnel of the consequences of accepting or soliciting kickbacks? 42. Are there requirements for purchasing personnel to certify annually that they have not engaged in any prohibited activities, such as kickbacks and gratuities? 43. Are procurement personnel required to complete an annual conflict of interest certification, including disclosure of financial or ownership interest in suppliers? 44. Is a standard of conduct policy for suppliers disseminated to suppliers annually? 45. Are suppliers required to provide representation that no kickbacks are provided, solicited or offered? 46. Is provision made for periodic rotation of procurement personnel? 47. Does the purchasing department conduct self-audits on a regularly scheduled basis? 48. Is there a program for education and training of purchasing personnel?