AUSTIN INDEPENDENT SCHOOL DISTRICT INTERNAL AUDIT DEPARTMENT PROCUREMENT AND CONTRACTING AUDIT PROGRAM

Transcription

1 GENERAL: The purchasing function is among the most important business activities of the District. The primary objective of a good purchasing system is providing quality materials, supplies, and equipment in the right quantity in a timely, cost-effective manner. This audit will focus on the overall purchasing system, including: Policies and procedures, Bidding practices, Purchase orders, Internal controls, warehousing, P-cards, Contracted services, Online ordering for delivery of just-in-time supplies, and Compliance with applicable laws and regulations. In addition, this audit will focus on other areas the department is responsible for which includes mail and print shop services of the District. AUDIT OBJECTIVES: 1) Comprehensive written policies and procedures governing the procurement process have been established and are updated to reflect the current process and rules; 2) 3) 4) 5) Verify that transactions are processed in accordance with purchasing laws, District policies and procedures, performance guidelines, and best practices; Ensure that adequate internal controls have been implemented to limit exposure to unauthorized or inappropriate transactions; Validate that there is proper segregation of duties within the purchasing department; The Department operates within budgetary constraints. Page 1

2 AUDIT PROCEDURES: 1) General Obtain: i. Policies and Procedures ii. Prior Audit Reports iii. Reports from external auditors, the Texas Education Agency, and any other oversight agencies iv. External auditor management records v. Regulatory Examination Reports vi. Job Descriptions and Organizational Chart vii. Related Information of Laws and Regulations Review policies and procedures to determine adequacy. Ensure policies and procedures have been communicated to appropriate personnel. Review prior reports to determine whether corrective action has been implemented for noted deficiencies. Review related laws and regulations to become familiar with requirements. 2) Contracts and Purchasing Select a sample of purchases over $50,000. Perform testing for the following: i) Determine which method was used to secure the selection. (1) Competitive Bid (2) Competitive sealed bid (Invitation for Bid- IFB) (3) Inter-local contract (4) Request for Proposal (RFP-services purchases) (5) Request for Quote (RFQ-services purchases) (6) Request for Information (RFI-services purchases) ii) Ascertain if the proper method was utilized and how the vendors were evaluated. iii) iv) Ensure bids were properly advertised. Board approval was obtained. Page 2

3 v) Ensure documentation is original, free from alteration and available to support the selection process. Select a sample of purchases between $10,000 and $49,999. Perform testing for the following: i) Ensure that written quotations were solicited from at least three vendors (if applicable). (1) Vendors should be furnished with written specifications. (2) Quotes should include freight terms and costs Select a sample of purchases for $9,999 or less. Perform testing for the following: i) Determine which method was used to secure the selection. (1) Single informal quote (2) P-Card Purchase Select a sample of consulting agreements. Perform testing for the following: i) Determine if purchasing guidelines were followed (see above). ii) Consultant agreement includes scope of work, payment terms, conditions and timeline. iii) A criminal background check has been completed for individuals that may come in contact with children. iv) All agreements have appropriate signatures (Principal/Director; Associate Superintendent/Executive director; Director of State, Federal and Private Accountability; Contractor) (1) Agreements in value range of $10,000-$49,999 (Chief Officer; CFO, District Legal Counsel, Superintendent) (2) Agreements for $50,000 and above (Board President) v) For agreements over $10,000, a consulting agreement must include a Contract Authorization Request form. A Superintendent Correspondence form is also required if Superintendent Signature and approval is necessary. If the provider of services is an individual, an Independent Contractor checklist form must also be included. e) American Express Corporate Purchasing Card (P-Car i) Determine that p-cards are issued to employees with the role and responsibility for acquisition of goods and services necessary for the effective and efficient operation of school, academic, and administrative departments. Page 3

4 ii) iii) iv) v) Ensure that the Austin ISD purchasing card agreement is on file for employees with a p-card. Ascertain if p-card holders received training on the program. Ascertain whether adequate controls are in place over unissued cards and cards returned or collected. Ensure that the District has implemented a procedure to cancel p-cards for individuals who have transferred or terminated employment immediately. 3) Print Shop Determine the print shop's workflow. Ascertain if machine operators have proper licensing, skills, and/or certification, if applicable. Test for operational efficiency. e) Test a sample of transactions for accuracy, reasonableness, and adequacy of supporting documentation. f) Determine if services are provided to other districts or outside entities. 4) Mail Services Determine mail room workflow. Ascertain if all drivers have the appropriate licensure. Test for operational efficiency. i) Determine if the mail scheduling/routing provides optimal service. e) Review complaint logs. Page 4

5 5) Warehouse Determine if all drivers have the appropriate licensure. Determine if warehouse staff are certified machine operators, if applicable. Review the process of selling materials to other districts and charter schools. e) Determine the process for asset tagging. i) Security ii) Storage f) Test for operational efficiency. i) Determine if the delivery scheduling/routing provides optimal service. ii) Determine if warehouse floor space is adequately utilized. (1) Frozen (2) Dry goods (3) Surplus (4) Records 6) Budget Obtain the Contract and Procurement Department's budget reports. Review for unusual transactions, significant overdrafts, or serious fluctuations from amounts initially budgeted. Evaluate overtime expenditures to determine justification. Page 5