Audit Program for Agencies_ Universities_ and Colleges by lonyoo

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									STATE OF SOUTH CAROLINA BUDGET AND CONTROL BOARD PROCUREMENT SERVICES DIVISION OFFICE OF AUDIT AND CERTIFICATION

AGENCY NAME

AUDIT PERIOD

AUDIT PROGRAM Last Updated 2-25-09

INDEX A. B. C. D. E. F. General Control Program Code Compliance - General Compliance - Sole Source and Emergency Procurements Compliance - Supplies and Services, IT and Consultants Surplus Property Compliance - Architect/Engineer and other related Professional Services and Construction Services

A.

GENERAL CONTROL PROGRAM

Step # 1 Arrange for entry conference with agency officials to discuss upcoming audit. Prepare a memo if necessary. 2 Review A&C correspondence files, CPO ratification, CPO and Procurement Review Panel contract controversy and protest files to date since the prior engagement. Review working papers (including auditor's suggestions for program changes at A-11) from the last audit. Prepare a memo. 3 Obtain answers to questionnaire (ICQ) on internal controls and efficiency and effectiveness. Prepare an evaluation. 4 Inquire if there are any transactions between Foundations or Eleemosynary or 501 C3 groups. Inquiry about Gifts between these entities. Determine if those transactions are subject to 11-35-40. Prepare a memo. 5 Review all audit reports from internal and external audit organizations since the previous engagement. Review scope of audit program in the procurement area and their resulting reports. Prepare a memo if necessary. 6 Have agency prepare and sign standard representation letter. 7 Prepare memo for next audit listing pending matters, suggested changes in audit procedures or other items which will be of help in preparing the next audit. N/A if not necessary.. 8 Complete working paper index. Make certain that all working papers are properly headed, initialed and dated and that they accurately support the conclusions reached. Review all workpapers of audit team members. 9 Prepare, in good form, draft report (management letter) pointing out out weaknesses noted during our audit our recommendations for improvements in the system and any recommended certification limits.

DONE BY AND DATE

W/P REFERENCE A-4

A-5

A-3

A-6

A-7

A-9 A-11

A-1

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10 Prepare the time summary and track time for the audit. Include all post fieldwork time. 11 Arrange and conduct an informal exit conference to advise agency officials of probable audit exceptions. 12 If agency is requesting certification, obtain a written request identifying the areas and amounts of their request. Have agency include employee certifications, experience and expertise. 13 Obtain MMO/ITMO transaction activity report for agency. 14 Arrange and conduct an exit conference to go over the results of our audit with agency personnel. Document any changes to the draft report. 15 Arrange and conduct follow-up review if necessary to determine if corrective action has been taken and prepare supplemental report. 16 Review managers notes. 17 Submit certification request and draft audit report to CPOs for consideration.

A-12 A-10

A-14

A-15 A-8

A-13

A-16

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B. CODE COMPLIANCE - GENERAL Step # 1 Obtain copy of agency Internal Procurement Procedures Manual and review. Update the office file. Determine posting location of list of procurement officers and their level of authority 19-445.2005 (A)(1) DONE BY AND DATE W/P REFERENCE B-1

2 Minority Business Enterprise (MBE) Utilization a. Check to see that annual plans were approved and submitted timely. b. Determine that quarterly reports were filed timely. c. Compare goals versus results and include in audit report 3 Determine if credit card purchases are being managed in compliance with the Code and internal procedures. Review agency training program. Review Procurement Card Manual. 4 Review blanket purchase agreement files or lists. Test BPA procedures and a sample of release files. 5 If bid files are not adequately tested (Small Purchases, IFB, RFP, BVB, FPB), on a judgmental basis, review an additional sample of sealed bid and quotation files. Include procurements managed by Agency under any specialty procurement certifications.

B-2

B-3

B-4

B-5

6 Review a block sample from the numerical purchase order file. Check for: a. splitting of orders b. favored vendors c. any questionable procurements

B-6

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7 If necessary, combine memos from all areas to identify common compliance issues. 8 Determine that procurements of revenue generating contracts such as vending/concessions management, trademark management, television/radio management, etc. were done in accordance with the Code. Inquire if quid-pro-quo contracts exist and test for compliance. 9 Obtain agency ratification files. Review to determine that the agency’s ratifications were done in compliance with Reg 19-445.2015 and ratified by an appropriate official. Determine that the agency is submitting quarterly reports of ratifications. to our office.

B-7

B-8

B-9

10 Determine if agency has satellite locations with procurement authority. Test a sample of transactions from those locations. If necessary, visit satellite offices to test field procurements.

B-10

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C. SOLE SOURCE, EMERGENCY AND TRADE-IN PROCUREMENTS

Step # To determine the validity of sole source, emergency and trade-in procurements reported to MMO and their Code compliance. Obtain copies of all Determinations and Findings and related purchase orders or vouchers for period being reviewed. 1 Determine who is authorized to sign sole source and emergency procurements for the agency. 2 Review each sole source and emergency determination and finding. Determine that each procurement is: a. justified b. properly approved c. accurately reported to MMO 3 Review file of trade-ins for: a. Proper approvals if the original cost is greater than $5,000. b. accurate reporting 4 Prepare a memo on what quarters were tested, the dollars tested and our findings. State the number of transactions and total dollars tested in the memo.

DONE BY AND DATE

W/P REFERENCE

C-1

C

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D. COMPLIANCE - GOODS AND SERVICES, IT AND CONSULTANTS

Step # 1 Establish that procurement authority and responsibility is vested in the purchasing department, or, if not, it is clearly defined and logically delegated. Determine posting location of list of procurement officers and their level of authority 19-445.2005 (A)(1) 2 Select and test a sample of transactions, using the standard matrix. 3 Determine that agency has an approved Information Technology Plan 4 Prepare memo of findings. Update the sampling plan.

DONE BY AND DATE

W/P REFERENCE

D-1

D

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E.

SURPLUS PROPERTY

Step # 1 Determine that the agency has properly reported surplus personal property to the Surplus Property Section of the Office of General Services as required by Section 11-35-3820. 2 Determine if the agency has conducted sales of surplus property, scrap or junk during the audit period. If so, check for SPMO involvement and approvals.

DONE BY AND DATE

3 Prepare a memo covering the work performed and findings.

W/P REFERENCE

E

D. COMPLIANCE - A/E, CONSTRUCTION AND INDEFINITE DELIVERY

Step # 1 Assure that sample items for construction or architect services are in compliance with The Manual for Planning and Execution of State Permanent Improvements, Part II. Prepare a schedule and test using Major Construction Matrix or A&E and Related Professional Services Matrix. If project began before audit period and contract has been tested previously, test change orders that occurred during the audit period. Expand sample as necessary to assure adequate coverage of contracts awarded under certifications. 2 Inquire if agency uses IDCs. Select a sample and test for compliance with The Manual for Planning and Execution of State Permanent Improvements, Part II. 3 Prepare memo of findings. Update the sampling plan.

DONE BY AND DATE

W/P REFERENCE F-1 & F-2

F-3

F

EXHIBIT A STANDARD MATRIX For D-1 (A) The properly approved requisition agrees with the purchase order and the vendor invoice for items procured and amount. Invoice and purchase order amounts agree. The voucher is supported by the proper receiving reports which are signed and dated by receiving personnel. Dates of documents indicate that the procurement was properly . (B) Discounts were taken and payment was made in a timely manner. Only S.C. sales taxes were paid. (C) All changes to the purchase order (i.e., price and quantity changes) were properly documented and approved. (D) Materials Management Office term contracts were properly utilized. If term contract prices beaten by 10%, determine that term contract vendor was offered chance to match price. (E) The procurement was handled in accordance with the Consolidated Procurement Code and Regulations. -Small Purchases (< $50,000.00) -< $2,500.00 - Price was fair and reasonable -$2,5000.00 - $10,000.00 - Solicitation of three written quotes requested and documented -$10,000.00 - $50,000.00 - Written request for quotations documented - Written responses documented - SCBO advertisement documented - Preferences correctly applied Check for clarifications made by buyers -Competitive Sealed Bids (>$50,000.00) -Written invitation for bids documented -Written responses documented and tabulated -Award to lowest responsive & responsible bidder or written determination if not -SCBO advertisement documented - Preferences correctly applied -Notice of award or intent to award documented, posted, & distributed to each respondent -Competitive Sealed Proposals (>$50,000.00) -Same as competitive sealed bids above; and -Determinations to do RFP's and award RFP's prepared -Evaluation factors in solicitation and applied to responses -Evaluation committee's score sheets, confidential statements -Award to highest ranked offeor

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-Competitive Fixed Price (>$50,000.00) -Same as competitive sealed bids above; and -Determintation to do fixed price solicitation -Competive Best Value (>$50,000.00) -Same as competitive sealed bids above; and -Evaluation factors in solicitation with cost at a minimum of 60% -Competitive On Line Bidding (>$50,000.00) -Same as competitive sealed bids above; and -Review solicitation and award to Section 11-35-29 -Sole Source -Written determination prepared in advance and approved by authorized official -Single source was appropriate -Transaction reported to MMO -Emergency -Written determination prepared and approved by authorized official -Emergency was justified -Competition, as practicable was sought -Transaction reported to MMO (F) All other aspects of the procurement appear proper.

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EXHIBIT B MAJOR CONSTRUCTION MATRIX A Establishment of a Permanent Improvement Project (A-1) 1 Land or building acquisition regardless of amount 2 State Agencies $100,000 3 Universities and Colleges $500,000 If project is bid other than low bid method, check for OSE approval of alternate delivery method. Determine if Construction Contract Award Authority Over Agency Authority, Then Do: 1 Advertised in official state publication 2 Contractor's Certificate of Insurance maintained to current 3 Approved "Request for Authority to Execute a Construction Contract" (SE-380) 4 Notice To Proceed (SE-390) issued after SE-380 approval (Except for IDC) Within Agency Authority, Then Do: 1 Advertised in official state publication 2 Bid form of low bidder with listing of subcontractors (SE-330) 3 Bid security of low bidder with power of attorney (5% of bid) 4 Certified Bid Tabulation sent to all bidders within ten (10) days 5 Notice of Intent to Award sent to all bidders (SE-370) 6 Fully Executed Construction Contract 7 Performance Bond and Labor and Materials Payment Bond with Power of Attorney (100% of contract) 8 Contractor's Certificate of Insurance maintain to current 9 Notice To Proceed (SE-390) issued after contract executed Change Orders (SE-480) 1 All change orders to construction contract approved by State Engineer's Office or by agency official if within certification 2 Compare change order approval dates with applications for payment Payment of Contractor 1 Application for payment for construction contract (SE-470) 2 Retention not to exceed 3.5% (5% reduced to 3.5% June 2005) Inquire if agency processed any procurements under an alternative delivery method under agency authority. Test project Request for sole source procurement Request for emergency procurement

B

C

D

E

F

G H

Indefinite Delivery Contracts for Construction A Agency must submit quarterly reports of all IDC activity (construction and A/E services) to the OSE

B

IDCs for construction limited to $750,000 over two years for start of work

C 1 2

Construction service IDCs are awarded through the competitive sealed bid process (SE380) Confirm Agency used one of two methods allowed to set up bid documents to determine base bid for award purposes a Cost Guide and multiplier (bidder's multiplier will be used for pricing work under this contract) or b Unit Prices (unit price list must be comprehensive) c When more than 20% of the work is not covered by the cost guide or unit prices, agency must solicit competitve quotes on the work from mutilple IDC contractors Bid Security based on maximum of single Delivery Order (DO) limit of $150,000 (Bid Security $7,500) Submit IDC to OSE for approval (SE 380) to award regardless of agency certification Delivery Order (DO) Award

3 4

D 1

Plans and specs on DOs for construction that are expected to exceed construction certification must be reviewed by the OSE before DO awards can be made. If the Agency has a single IDC for a needed service (mechanical, electrical, or roofing for example), the agency may make the DO award after the contractor makes a cost proposal. If an agency has multiple IDCs for a needed service, the Agency shall use a method that provides each contractor a fair opportunity to be considered for a DO award. Time permitting competitive bidding may be used for individual DOs. Performance and Payment Bonds are required for all DOs over $50,000. Delivery Order (DO) can not exceed $150,000, including amendments. Multiple DOs from IDC vendors on a single project can not exceed $300,000.

2

3

4 5 6

100% of contract)

bid for award purposes

EXHIBIT C A&E AND RELATED PROFESSIONAL SERVICES MATRIX A Advertised in official state government publication Response date must be at least 15 days (SE-210).

B

Evidence that Bidders used proper form in response A&E Service Questionnaires, Federal Standard Forms #254 and #255 or other form described in SCBO A&E Selection Approval Request 1 Submit SE-220 for approval of State Engineer. 2 Copy of executed agreement for A&E services. A&E Approval Request - Small Contracts (SE-230) 1 Procurement must be under $25,000 (Steps A-C do not apply). 2 Copy of executed agreement for A&E services. 3 Change Order 4 Maximum fees payable to one person or firm under small A/E selection shall not exceed $75,000 over a 24 month period. Sole Source of A&E (SE-550) Executed agreement must accompany (Steps A-D do not apply). Emergency Procurement of A&E (SE-560) Executed agreement must accompany (Steps A-E do not apply).

C

D

E

F

Indefinite Delivery Contracts for A/E & Related Professional Services A The Agency must submit quarterly reports of IDC activity (construction and A/E services) to the OSE.

B

IDC for professional services limited to 2 years for start of work.

C

IDC Contract for A/E and Related Professional Services (Over $25,000) 1

IDC award for large professional service contracts follow SE 220 process. See steps A, B and C above under A&E AND RELATED PROFESSIONAL SERVICES MAT Note: Small A/E contracts, $25,000 or less do not require OSE approval. SE 220 must include a contract with an hourly rate schedule. The schedule shall also include a multiplier not to exceed 1.1. Any single DO limited to $100,000 and total of IDC limited to $300,000.

2

3 4

DO fee shall be negotiated in accordance with the approved A/E hourly rate and reimbursables schedule

her form described in SCBO.

ssional Services

s) to the OSE.

ESSIONAL SERVICES MATRIX

shall also include a

and reimbursables schedule.


								
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