Internal Policy and Procedures

Audit of Purchases

POLICY:

Agents will review purchases to develop better contracts, educate departments, ensure fair market pricing and compliance with policies and procedures.

PROCEDURES:

A. Post Audit Procedures - Open Vendor

NOTE

The timing of the review is important because you will be using the Payment Books located in Vendor Relations (Rm. 302) and these books are not available until Mid August (after the yearly "books" close in Accounting).

1. Prior to starting, you must determine which campus department you would like to review.

1.1 Enter the Business Services home page

1.2 click on Accounting Services page

1.3 click on the Coding Information button

1.4 click on UDDS Lists, click on Madison and then the WEB page will give you the Unit, Division, and Dept. (UDD’s)

1.5 click on the Division you want, to break it down far enough to go to the next step. (Appendix #1, 3 pages , page 1, page 2, page 3).

2. The next step is to enter the Purchasing System, Order Inquiry Screen. Enter the dates that you are looking for (example; 07011998 to 06301999), then enter the UDDs that you determined you wanted to look at (example: A036500). This will then provide you with a listing of all purchase order for that time period for that department (Appendix #2). Please identify the open vendor blanket order(s) (vendor number 16908). This is the blanket order(s) that you would want to gather information on. You should review a minimum of one open vendor order for each UDDS.

3. Before going onto the next phase of the research, you must determine the criteria that you will be using. This criteria will allow you to determine which vouchers (invoice payment record) you will be looking at. Some suggested criteria is:

3.1 Many payments to the same vendor on the open vendor blanket order and therefore they should have had their own blanket order.

3.2 Orders to any vendors that are contract vendors and therefore making the open vendor order inappropriate.

3.3 Making small purchases from the same vendor to perhaps avoid the procurement process etc. (serial purchasing)

3.4 Order totals that exceed $25,000.00.

4. After determining your criteria, you would then go to Vendor Relations (Rm. 302) to check out the payment books by purchase order number to obtain all the purchases against that purchase order. Do not check these books out until you have time to get the information your need. It is very important to return these books promptly and do not let them sit on your desk. These books will provide the purchase order number, the amount of the original purchase order, vendor names, invoice numbers, amount of invoice payment and the voucher number involved (Appendix #3).

5. Once you have the invoice payment information on the purchase order involved, you should look for any orders that meet the criteria you have selected to do your review.

6. If you find any violations, you contact the department responsible for the purchases to inform them of your findings. You can recommend solutions that are pertinent to each violation.

B. Post Audit Procedures - Blanket Order

NOTE

1. Prior to starting, you must determine which campus department you would like to review.

1.1 Enter the Business Services home page

1.2 click on Accounting Services page

1.3 click on the Coding Information button

1.4 click on UDDS Lists, click on Madison and then the WEB page will give you the Unit, Division, and Dept. (UDD’s)

1.5 click on the Division you want, to break it down far enough to go to the next step. (Appendix #1, 3 pages , page 1, page 2, page 3).

2. The next step is to enter the Purchasing System, Order Inquiry Screen. Enter the dates that you are looking for (example; 07011998 to 06301999), then enter the UDDs that you determined you wanted to look at (A036500). This will then provide you with a listing of all purchase order for that time period for that department (Appendix #2). Identify the blanket order(s) that you would want to gather information on. You should review a minimum of one blanket order for each vendor order for each UDDS.

3. Before going on to the next phase of the research, you must determine the criteria that you will be using. This criteria will allow you to determine which vouchers (invoice payment record) you will be looking at. Some suggested criteria is:

3.1 Orders to vendors that are on an existing contract

3.2 Making small purchases from the same vendor to perhaps avoid the procurement process etc. (serial purchasing)

3.3 Many purchases for the same item (possible future contract)

4. After determining your criteria, you would then go to Vendor Relations (Rm. 302) to check out the payment books by purchase order number to obtain all the purchases against that purchase order number. Do not check these books out until you have time to get the information your need. It is very important to return these books promptly and do not let them sit on your desk. These books will provide the purchase order number, the amount of the original purchase order, vendor names, invoice numbers, amount of invoice payment and the voucher number involved (Appendix #3).

5. Once you have the payment information, you will want to pull vouchers to determine what they purchased on those invoices. You will need to either request copies using the Pull Form (Appendix #4) or fill out a check out card available in the Vendor Relations (Rm. 302) . These need to be filled out with the voucher number (including year), your initials, and date (Appendix #5). To determine the voucher year, add the year of the time period you are researching (example voucher from 5/99 would be 9-12345AA). Put all your voucher requests in numerical order and rubber band them together with a note asking the File Room Personnel to pull these vouchers and make sure you include your name on it and your office number. These are then put in the Accounting basket (not the Accounts Payable basket) located in the Purchasing hallway.

6. After you receive the voucher you need, you will need to locate the invoice(s) within the voucher that you wanted to look at. All invoices are in numerical order and many different purchase orders could be included on that voucher (Appendix #6). When you are done with the vouchers and they can be returned to file, put these in the same Accounting basket in the Purchasing hallway. Vouchers are the only official University payment record in existence. It is very important that these vouchers are returned as soon as you are finished with them. If you remove the staples to photocopy the invoices, make sure you put the voucher packet back together in the exact order it was in originally.