12:54 PM
Internal Control of Procurement Cycle
Write down below mentioned all Procurement Checklist Cycle points into a table having title Topics (below points), Yes, No, N/A.
General:
1. Are responsibilities for the requisitioning, purchasing and receiving functions segregated from the invoice processing, accounts payable, and general ledger functions?
2. Are responsibilities for the purchasing function segregated from the requisitioning and receiving functions?
3. Are responsibilities for the invoice processing and accounts payable functions segregated from the general ledger functions?
4. Are responsibilities for the disbursement preparation and disbursement approval functions segregated from those for recording cash disbursements and general ledger entries?
5. Are responsibilities for the disbursement approval function segregated from those for the disbursement preparation function?
6. Are responsibilities for entries in the cash disbursement records segregated from those for general ledger entries?
7. If EDP is used, is the principle of segregation of duties maintained within processing activities?
Requisitioning:
1. Are purchases of goods and services initiated by properly authorized requisitions bearing the approval of officials designated to authorize requisitions?
2. Are requisitions prenumbered and are those numbers controlled?
3. Is the appropriation to be charged indicated on the purchase requisition by the person requesting the purchase?
4. Before commitment, are unobligated funds remaining under the appropriation verified by the accounting or budget department as sufficient to meet the proposed expenditure?
5. Are requests for special purpose (nonshelf items) materials or personal services accompanied by technical specifications?
Purchasing:
1. Are purchasing authorizations structured to give appropriate recognition to the nature and size of purchases and the experience of purchasing personnel?
2. Do approval procedures exist for purchase order and contract issuance?
3. Are purchase prices periodically reviewed by a responsible employee independent of the purchasing department?
4. Are competitive bidding procedures used?
5. If practicable, are contract or purchasing officer's areas of responsibility rotated on a regular basis?
6. Do provisions in contracts for materials, services, or facilities acquired on other than a fixed price basis provide for an audit of contractors' costs, with payments subject to audit results?
7. Do procedures exist for public advertisement of nonshelf item procurements in accordance with legal requirements?
8. Are recurring purchases and documentation of the justification for informal rather than competitive bids periodically reviewed?
9. Are policies regarding conflicts of interest and business practice policies established, documented and distributed?
10. Are purchase orders and contracts issued under numerical or some other suitable control?
11. Are an adequate number of price quotations obtained before placing orders not subject to competitive bidding?
12. Is splitting orders prohibited to avoid higher levels of approval?
13. Are price lists and other appropriate records of price quotations maintained by the purchasing department?
14. Is a record of suppliers who have not met quality or other performance standards by the purchasing department maintained?
15. Are procedures modified when funds disbursed under grant or loan agreements and related regulations impose requirements that differ from the organization's normal policies?
16. Are procedures instituted to identify, before order entry, cost and expenditures not allowable under donor financed programs?
17. Is an adequate record of open purchase orders and agreements maintained?
18. Are purchases made for the accommodation of employees prohibited or adequately controlled?
19. If construction contracts are to be awarded, are bid and performance bonds considered?
20. Does predetermining selection criteria exist for awarding personal service or construction contracts and is adequate documentation of the award process required?
21. Are changes to contracts or purchase orders subjected to the same controls and approvals as the original agreement?
Receiving:
1. Are receiving reports prepared for all purchased goods?
2. Do procedures exist for the filing of claims against carriers or vendors for shortages or damaged materials?
3. Are steps taken to ensure that goods received are accurately counted and examined to see that they meet quality standards?
4. Is a permanent record of material received by the receiving department maintained?
5. Are receiving reports numerically accounted for or otherwise controlled to ensure that all receipts are reported to the accounting department?
6. Are copies of receiving reports sent directly to purchasing, accounting, and, if appropriate, inventory record keeping?
7. Is a government technical representative assigned to monitor and evaluate contractor performance and approve receipt of services with respect to procurements of special purpose materials, services, or facilities?
8. If a receiving department is not used, do adequate procedures exit to ensure that goods for which payment is made have been received and are verified by someone other than the individual approving payment that goods have been received and meet quality standards?
Invoice Processing:
1. Do invoice processing procedures provide for:
a) obtainment directly from issuing departments of copies of purchase orders and receiving reports?
b) comparison of invoice quantities, prices, and terms with those indicated on the purchase order?
c) comparison of invoice quantities with those indicated on the receiving reports?
d) as appropriate, checking accuracy of calculations?
2. Are all invoices received from vendors in a central location, such as the accounting department?
3. Do procedures exist ensuring that the accounts payable system is properly accounting for unmatched receiving reports and invoices?
4. Are requests for progress-payments under long-term contracts related to contractors' efforts and are they formally approved?
5. Do procedures exist for processing invoices not involving materials or supplies (for example, lease or rental payments, utility bills)?
6. Do procedures exist ensuring accurate account distribution of all entries resulting from invoice processing?
7. If applicable, is access to the EDP master vendor file limited to employees authorized to make changes?
8. Does the accounting department maintain a current list of those authorized to approve expenditures?
9. Do procedures exist for submission and approval of reimbursement to employees for travel and other expenses?
10. Is control established by the accounting department over invoices received before releasing them for departmental approval and other processing?
11. Is the distribution of charges in the accounting department reviewed by a person competent to pass on the propriety of the distribution?
12. Are invoices (vouchers) reviewed and approved for completeness of supporting documents and required clerical checking by a senior employee?
13. If an invoice is received from a supplier not previously dealt with, are steps taken to ascertain that the supplier actually exists?
14. Are payments made only on the basis of original invoices?
15. Is responsibility fixed for seeing that all cash discounts are taken and if applicable, that any exemptions from applicable taxes are claimed?
16. Are differences in invoice and purchase order price, terms, shipping arrangements, or quantities referred to purchasing for review and approval?
17. Does the accounting department record and follow up partial deliveries?
18. Are the accounting and purchasing departments promptly notified of returned purchases, and are such purchases correlated with vendor credit advices?
19. Is the program and expenditure account to be charged reviewed for propriety and budget conformity?
20. Do check signers or other responsible officials determine that restricted cash funds are expended only for restricted purposes?
21. If applicable, do procedures exist to ensure adjustment of the reserve for encumbrances (obligations) when invoices are prepared for payment?
Accounts Payable, Encumbrances or Obligations:
1. Are statements from vendors compared on a regular basis with recorded amounts payable?
2. If an encumbrance (obligation) system is used, are outstanding purchase orders reconciled to the reserve for encumbrances (obligations) on a monthly basis?
3. Are encumbrance (obligation) entries recorded only on the basis of approved purchase orders?
4. Do procedures exist ensuring that accounts payable and encumbrances (obligations) are applied against the appropriate account?
5. Do procedures exist ensuring that department heads are notified of payments made against accounts payable and encumbrances (obligations)?
6. Are trial balances of reserve for encumbrances (obligations) and accounts payable prepared on a regular basis?
7. Are trial balances footings checked and traced to the individual items as well as comparing the total to the general ledger balance by an employee other than the accounts payable clerk?
8. Are transactions between funds in all affected funds posted in the same accounting period and on a timely basis?