Conduct Procurements Process Audit

A procurement audit is a project management process that reviews different contracts and contracting processes to determine the completeness, efficacy as well as the accuracy of the procurement process. It is a structured review that stems from the Plan Procurement Management process through the Control Procurements.

Meet with the managers

The first thing you’ll want to do before you start your audit of the procurement department is to schedule a meeting with the managers. Specifically the managers of that department.
You’ll want to discuss with them what they think areas of improvement could be. Discuss the processes that are occurring within the department. Getting a manager’s perspective can help you understand what to focus on.

Prioritize the Procurement Department

After hearing from the managers about the current state of the department. Start to prioritize the different processes. Each process may have different challenges. Prioritizing them can ensure that you are getting to the bigger challenges first.
The procurement process will take you through the process of making a company purchase with specific vendors. If you sense an issue with choosing the vendors, you may want to tackle that area first. If you feel as though the process is taking a bad turn in the very beginning then you’ll want to go through each step.
This is where the meeting with the managers comes into play. And why it is a vital step to the audit.

Purchasing Forms

Depending on where you’ll start your audit you will eventually get to purchasing forms. Or more commonly known as purchase orders. You will want to select a random group of these purchase forms to audit.

This will mean checking that each section is filled out correctly. Make sure that the signatures on this purchase order are valid as well. Finally, check the information on the final invoice and any other documents that should have the same information.

Review Procedures

As an auditor, you will also review the overall procedures taken by the employees in this department. Whether these procedures are signature reviewing or purchase order approval by a manager.

Review the steps that employees should be doing to ensure that the procurement process is done correctly. If there are steps being skipped or not done efficiently record them for your report.

Vendors and Selection

Every company has a process of putting vendors on an approved list. This is an area of the procurement process is likely to have fraud. Review this process to ensure that it is up to date and meets the standards that the company requires. Set aside any orders that are made without this process for your later report.

Next, look at the vendors on the approved list and review them by the criteria required once again. Set aside the vendors that don’t meet the criteria.

End Report

Now you will create your end report detailing your experience. This will be sent to higher management or the executives of the company. In it, you will include everything you have found as well as how they will be improved in the future.

It is important that you also include all instances of fraud found in the procurement department. And immediately report it to higher management as you find it.

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