Purchasing Audit Program by auditnet

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									Contributed (11-12-01) by (Cathy Clark at lilmarie28@hotmail.com) Purchasing Audit Program Audit Objectives: 1. To determine if written policies and procedures relating to the purchasing and vendor bidding processes exist and are being adhered to by departmental staff. 2. To determine if the Purchasing function is independent of the Receiving and Accounts Payable functions. 3. To determine if adequate controls exist within the Purchasing Department to ensure that purchases are made in the most cost effective and timely manner. 4. To ensure that there is a proper segregation of duties within the Purchasing Department. 5. To ensure that purchasing staff is independent of the vendors utilized for making Medical Center purchases. 6. To determine if Purchase Requisition forms are properly completed and approved before they are processed. 7. To determine if Medical Center departmental purchases are made within budgeted cost restraints. 8. To determine if capital equipment and project related purchases are requested through and approved by the proper channels. 9. To determine if adequate steps are made to repair equipment before purchases are made for new equipment. Preliminary Audit Steps: 1. Review any prior year's workpapers to gain an understanding of the purchasing function and to note any deficiencies that previously existed.

2. Obtain and review current written policies and procedures drafted by the Purchasing Department to include in the current year's workpapers. 3. Conduct interviews with key Purchasing Department staff members to gain an understanding of and document the purchasing process. The following are key areas: a. b. c. d. e. f. g. Bid Process, Vendor Selection and Performance Measures, Segregation of Duties, Vendor Relationships, Capital Equipment Purchases, Project Related Purchases, and Emergency Purchases.

4. Review and document the procedures followed for entering Purchase Requisition (PR) forms into the system. 5. Review and document how Purchase Orders (POs) are submitted to the vendor. 6. Review and document the procedures followed to ensure departmental purchases are made within budgeted cost restraints. 7. Review and document the procedures followed for handling repairs to equipment. 8. Determine how Purchasing Department management checks the accuracy of department staff (i.e., monitor performance). 9. Prepare detailed notes of the Purchasing Department processes and review these notes with the audit supervisor. Audit Procedures: 1. Select ____ purchase orders for testing purposes. A. Examine the POs and note whether: 1. They were properly approved. 2. The items purchased were charged to the proper account and appear appropriate. 3. The vendor selected appears on the Medical Center's vendor list.

B. Trace the POs to the appropriate PR form, noting agreement of all data. C. Trace the POs to the appropriate paid invoice, noting agreement of all data. D. Compare requisition dates, purchase order dates and invoice dates, noting the timeliness of purchasing activities. E. Trace POs to any existing bidding documentation, noting agreement and appropriateness of the vendor selected. 2. Select ____ capital equipment POs for testing purposes. A. Examine the POs and note whether: 1. They were properly approved. 2. The items purchased were charged to the proper account and appear appropriate. 3. The vendor selected appears on the Medical Center's vendor list. B. Trace the POs to the appropriate PR form, noting agreement of all data. C. Trace the POs to the appropriate paid invoice, noting agreement of all data. D. Compare requisition dates, purchase order dates and invoice dates, noting the timeliness of purchasing activities. E. Trace POs to any existing biding documentation, noting agreement and appropriateness of the vendor selected. 3. Summarize any findings in a detailed memo.


								
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