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The control objectives (in determination of procurement need) are due to be achieved as follows.
The internal control element concerned is mentioned in the parenthesis.
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| (1) |
Procurement proposition is made on a form, updated version of which is
continuously available in the procurement system (accounting systems).
The form serves also as a checklist ensuring
that all essential matters are considered in each acquisition.
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| (2) |
The form is filled in by an employee who is competent in determining
the need for the procurement (control environment).
In order to fill in the form the employee has to log on the procurement system (control)
and be authorized to fill in the form (control).
These steps are recorded in a log (accounting systems),
and the log is analyzed afterwards on a regular basis (control).
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| (3) |
When making the proposition the employee has findings about the factors
effecting the procurement need.
In addition, the employee is shown by the procurement system
information on product titles, appropriations left for procurement, the average delivery time
of the commodity etc. (accounting systems).
When comparing that information with findings of his own the employee
makes an assessment – perhaps unconsciously – about the effectiveness of
the internal control of procurements (determination of risks).
The information might help him or her, too, to invent how procurement cycle can be improved.
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| (4) |
The form is filled in within the procurement system.
The system checks the logicality and integrity of the input data (control).
The system can provide the user with relevant remarks (accounting systems).
Some of the remarks are displayed only to the person that the form is sent to.
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| (5) |
The form is sent to the supervisor of the employee within the procurement system.
The form is sent only if all the mandatory information is included on it (control).
The act of sending is written on the log (accounting systems).
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| (6) |
The supervisor receives a message telling about the procurement proposition.
Nobody has had a possibility to learn about the proposition and interfere with it (control).
The supervisor checks the proposition and accepts or rejects it (control).
The measure is logged (accounting systems).
When viewing the form the supervisor is displayed remarks made automatically
by the procurement system when such remarks exist (accounting systems).
This information helps the supervisor identify risks of the procurement,
and to assess those risks, and to form an opinion about them (risk determination).
Depending on the opinion the supervisor might e.g. ask additional information
from the warehouse (ad hoc control). If the procurement exceeds
certain price level the supervisor submits the procurement
to his own superior for acceptance (control).
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