The procurement function is responsible for the purchasing of goods, works and services. Also in charge of spending the company’s capital, a well-run procurement department follows processes to ensure integrity each time a purchase is made. An audit reviews the procurement process to reduce fraud and offer suggestions for improvement.
According to INTOSAI Task Force public procurement audit guide the audit objectives may be detailed according to the stages of the goal-oriented procurement process. INTOSAI give some Important issues to be audited at the several stages of the public procurement cycle include:
1. At the stage of substantiation of the procurement:
• Legality and validity of the identified need for procurement, in quantitative and qualitative terms
• Provision of the procurement with the necessary resources in accordance with the plans
• Degree in which experience gained in previous procurements has been taken into account in following procurement planning
• Was needs assessment performed to ensure that goods or services are acquired in order to address the need;
• Are requirements are linked to the budget
2. At the stage of preparation of the procurement:
• Correctness of the procurement procedures’ choice
• Compliance of the procurement procedures’ implementation with applicable standards and objectives
• If there is a certain classification of contracts, correctness of the contract type choice
• Has the supplying industry has been analyzed to determine the appropriate procurement strategy.
• Have the specifications for a particular procurement been determined
3. At the stage of implementation of the procurement:
• Evaluation of the contract implementation management process; identification and management of implementation risks
• Control of contract deliveries: compliance to the contract and to regulations; timeliness and quality, process of acceptance
• Compliance, timeliness and/or efficiency of the payments’ process
• Evaluation of the procurement results
4. At the stage of the usage of the procurement results:
• How the actual qualitative and quantitative characteristics of the product obtained as a result of the procurement correspond to the planned indicators and standards
• Procurement outcomes: assessment on whether procurement results are used in accordance with the intended goals and on how the consumers are satisfied with them
• Minimization of “the cost of ownership”
• Results of analysis and assessments on the procurement implementation, including measures to eliminate identified deviations
5. At the stage of completion of the use:
• Organization and performance of the disposal procedure in terms of minimization of expenditure and impact on environment
• Implementation of the possible reutilization of certain components of the product used
• Results of analysis and assessment of the procurement implementation and experience gained and how it is used for the planning of forthcoming ones
