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Procurement Audit for Better Procurement Control

29-30 Sep, 2021, Virtual Classroom Training

IPA Training is Registered with

Venue Details

Virtual Classroom Training


Contact us

FOR COURSE DETAILS

Juliany,

Office: 03 2283 6109

Mobile: +60 122281247

juliany@ipa.com.my

Phoebe,

Office: 03 2283 6100

Mobile: +60 193637822

phoebe@ipa.com.my

Bee Teng,

Office: 03 2282 6112

Mobile: +60 172566121

beeteng@ipa.com.my

FOR CUSTOMISED IN-HOUSE TRAINING

Jane,

Office: 03 2283 6101

Mobile: +60 129418251

jane@ipa.com.my

Keith,

Office: 03 2283 0000

Mobile: +60 162272735

keith@ipa.com.my

ADDRESS

A-28-5, 28th Floor, Menara UOA Bangsar,
No.5, Jalan Bangsar Utama 1,
59000 Kuala Lumpur

FOCUSING ON
  • Module 1 – A Brief Understanding Of The Procurement Framework
  • Module 2 – Analysing Internal Procurement Processes
  • Module 3 – What To Audit In Procurement
  • Module 4 – Establishing Procurement Process Risks
  • Module 5 – Risk Management And Mitigation
  • Module 6 – Understanding Fraud In Procurement
  • Module 7 - Fraud In Contracting
  • Module 8 – Review And Conclusion
INTRODUCTION

Procurement is a critical business activity for many organizations and it is a significant contributor to organizational value and competitive advantage.

 

The efficacy and efficiency in managing this activity with other team members such as accounts payable, production, finance, warehousing, and engineering can have an impact on strategic decision making, compliance and the ability to compete effectively.

 

Procurement’s role is to ensure materials are available when required in the right quantity, right quality and from the right source of supply for either consumption or in the production of value added outputs. This would entail sourcing activities, creating a database of qualified suppliers, setting in motion the purchasing processes that enable seamless buying activities such as the requisition for quotation, invitation to tender, selection of right suppliers, negotiating with suppliers, contract formulation, and monitoring and evaluating suppliers.

 

As the procurement activities cover a wide area and scope, loopholes, defects, deviations and fraud may permeate through standard operating procedures that are hardly tested for the efficacy of control mechanisms. Hence, procurement design and operations need to be investigated by carrying out tests of controls so that potentially fraudulent activities can be averted continuously.

 

This two-day course is designed to provide businesses with the confidence that the procurement processes in place have been thoroughly tested for compliance to best practices, conform to accounting standards, reduce risk, and deter malfeasance or fraudulent activities.

OBJECTIVE
  1. Ensuring that procurement controls are in place and are effective (compliance testing).
  2. Understanding the weaknesses of processes and controls (substantive testing).
  3. Determining the effectiveness of the procurement function – process analysis.
KEY BENEFITS OF ATTENDING THIS COURSE
This course offers ample, practical real life situational analysis that provides the following benefits:
  1. Tried and tested control systems in procurement for better compliance
  2. Confidence in the efficacy and efficiency of the procurement function
  3. Ways to monitor and scrutinise processes and standard operating procedures that conforms to procurement policies
  4. Methodologies to analyse risk and take corrective actions
  5. Methodologies to detect process deviation and deter fraudulent activities
WHO SHOULD ATTEND
  • Internal Auditors
  • External Auditors
  • Procurement Executives and Managers
  • Purchasing Executives and Managers
  • Finance Executives and Managers
  • Anyone who is interested in Understanding Procurement Auditing, Procurement Processes, and Fraud
METHODOLOGY
  • Interactive Lectures
  • Practical Case Studies
  • Class Participation and Exercises
DAY 1
9:00

MODULE 1 – A BRIEF UNDERSTANDING OF THE PROCUREMENT FRAMEWORK

  • Procurement – policies and process analysis
  • Purchasing – establishing needs and requisition processes
  • Sourcing – selection criteria and supplier database


10.45

MODULE 2 – ANALYSING INTERNAL PROCUREMENT PROCESSES

  • The Procurement Process - analysis of policies & procedures, detecting loopholes and abuses
  • The Requisition Process - authorization, verification and approval for various forms of assets purchase
  • Asset Receipt - analysis of the receiving procedures of inventories, fixed assets, parts, rejected materials, transfer of assets, etc.
  • Asset Deployment - fixed assets deployment, inventories and materials tracking to the end user, parts & MRO user acceptance and acknowledgement.
  • Material Disposal - process flow, authorization, documentation, physical management
1:00 Lunch
2:00

MODULE 3 – WHAT TO AUDIT IN PROCUREMENT

  • Compliance Testing – testing compliance with control procedures and company policies
  • Substantive Testing – checking for integrity of contents, designed to obtain evidence to ensure accuracy of data
  • Processes
    o Supplier selection – evaluation criteria and database management
    o RFx – RFI, RFQ & RFP
    o User needs establishment – maverick behaviour, and recalcitrant activities by certain departments
    o Tendering and Contracts – SOW and specifications
    o Performance monitoring
    o Payment monitoring
3:45

MODULE 4 – ESTABLISHING PROCUREMENT PROCESS RISKS

  • Supplier related – selection, non-conformance to quality, delivery and procedures, collusion & conflict of interests, etc.
  • Supply related – force majeure, supply-demand situations, price manipulations
  • User related – over specifications, cosy relationships, maverick purchase
  • Process and system related – manual/computer limitations, SOP’s, authorisation and approval loopholes, etc.
5:00 End of Course
DAY 2
9:00

MODULE 5 – RISK MANAGEMENT AND MITIGATION

  • Risk assessment – using risk matrix and understanding Kraljic Matrix
  • Risk mitigation plans – service levels and minimising risk exposure


10.45

MODULE 6 – UNDERSTANDING FRAUD IN PROCUREMENT

  • Fraud – the basics
  • Facts about fraud
  • The fraud triangle – Triangle, Diamond & MICE
  • Factors contributing to fraud
  • Conflict of interest, bribes, gifts and illegal gratuities
  • Characteristics of people committing fraud
  • Cost of fraud to organizations
1:00 Lunch
2:00

MODULE 7 - FRAUD IN CONTRACTING

  • RFI, RFQ, RFP and Tender – open and closed; how it works and what to look out for
  • The normal contracting process – drawbacks and potential for fraud
  • Performance based contracting – a better approach to contracting
  • Identifying and eliminating fraud in the contracting process – pre, on-going and post measures
3:45

MODULE 8 – REVIEW AND CONCLUSION

  • Physical audit and physical controls – difficulties and remedies
  • Process deviation and maverick behaviour – how to address this
  • Technology and controls – SOP and policies
  • Supplier relationship management and procurement risks – changed supplier relationships
  • Probity and fraud – ethics in procurement and control systems
  • Fraud – detection and prevention
5:00 End of Course