An audit can be defined as a check or an examination and
when such a check or examination is applied to
procurement,
Purpose of Procurement Audits
• They police the extent to which procurement
policies are being adhered to by the public agencies
and enterprises.
• They help to ensure the organization is using
procurement techniques, procedures and methods
that conform to the best working practice.
• They monitor and measure the extent to which
resources are being used effectively
• Procurement audits assist in the prevention and
detection of fraud and malpractices prevalent in
procurement.
• It is also crucial in identifying problems and
opportunities, thereby facilitating the development
of action plans
Types of Audits
 Bid preparatory audits: procurement and disposal
audits during bid preparatory process.
 Contract audits in the course of the execution of an
awarded bid
 Performance audits after completion of any
procurement or disposal and to conduct follow up
audits
Roles of Proc. Audit & Investigations Department
• Conducting periodic inspections of the records and
proceedings of the PDEs to ensure and correct
application of the PPDA Act.
• Institute procurement and disposal audits during the
bid preparatory process.
• Institute contract audits in the course of the
exclusion of an awarded bid.
• Conduct performance audit after completion of the
contract in respect to any procurement or disposal
as may be required.
• Investigate any public procurement or disposal
process where a breach, wrong doing,
mismanagement or collusion has been alleged or
reported against the PDE.
• Establish and maintain institutional linkages with the
entities which have professional and related interest
in public procurement and disposal
Powers of Audit and investigation
 Require any information, documents, records and
reports in respect of any aspect of the public
procurement
 Summon witnesses, call for the production of books
of accounts, plans, document and examine
witnesses and parties concerned on oath
 Commission or undertake any investigations and
institute procurement or disposal contracts and
performance audits.
 Act upon complaints by PDEs, providers and any
other entity.
 Cause to be inspected any procurement or disposal
function to ensure compliance with a bid award by
a PDE
Who should conduct procurement audits?
 External audits
 Internal audits
 A central procurement function
 External management consultants
 Funding agencies
Best practices for Procurement Audits
• Be external to the function or department that is
being subjected to the audits
• Exercise due care and professional judgment
• Comprise officers and consultancies who are well
versed with the regulations in the PPDA
• Have a collective knowledge of the subject matter
and the auditing proficiency necessary to fulfill the
requirements of the audit.
• Ensure proper supervision of all of its members
• Seek from managers of the entity being audited
their views about critical elements of the audit and
• Obtain appropriate and sufficient consultation and
advice throughout the audit
Planning Audits
is the process of deciding what to audit from a wide range
of possible procurements and entities, given the resources
that are available for carrying out audits.
Steps in Audit Planning
 Information gathering on entities activities and
other issues
 General overview of the entity’s institutional
mandate
 Role and how it carries out its daily functions
Risk Analysis
Low- Procurement with weaknesses where resolution
within the normal management framework is considered
desirable to improve efficiency
High-Procurements with serious weaknesses which could
cause material, financial regulatory or reputation risks to the
Entity warranty immediate attention by Senior Management
Satisfactory Audits-the laid down guidelines where followed
and no deviations was identified.
Medium- Procurements with weaknesses which, although
less likely to lead to material, financial, regulatory or
reputation risk, warrant timely management action.
High Risks Examples
• PDE do not use procurement plans.
• PDE has failed to produce relevant documents.
• There has been failure to submit monthly reports to Fundamental principles of public sector auditing
PPDA by PDE.
• PDE carry out many high value procurements.
• There have been complaints from the public and
bidders
Documents required from the entity   an auditor should use professional skepticism and
• Ministerial policy statement, get details about the
PDE as regards to general operations.
• Procurement plan for the financial year under audit.
• Minutes of the contracts committee meetings. Why?
• Evaluation committee minutes. Why?
• List of prequalified documents and prequalified
providers?
• Copies of advertisement?
• Administrative reviews documents if any.
PUBLIC PROCUREMENT AUDIT: FUNDAMENTAL PRINCIPLES
AND ASSUMPTIONS
Integrity: acting honestly, reliably, in good faith and in the
public interest
Independence and objectivity: being free from
circumstances or influences that compromise
Competence: Acquiring and maintaining knowledge and
skills appropriate for the audit role
Professional behavior: Complying with applicable laws,
regulations and convention
Confidentiality and Transparency: Appropriately protecting Types of Audits
information
Stakeholders of Public Procurement Audit
 The auditor
 A responsible party: the public servants or
Government institutions responsible for the subject
matter
 Intended users: the ones for whom the audit report
is prepared. E.g. PPDA
 Entities that procure goods, services or works can be
central government, local government
 External consultants providing assistance and
studies
 Financing institutions to fund or co-fund
partnership projects
 All sorts of suppliers
 Owners and managers of electronic platforms
where procurement information is hosted.
 Associations of public and private entities with
interest in procurement (e.g: engineers or
constructors).
 Legislative and executive bodies
 Public sector auditing provides legislative and
oversight bodies
 Transparency and accountability are powerful
means for preventing and combating c
understand that in public procurement there could
be circumstances that entail material mis-
statement and make it inefficient or ineffective.
 thoroughly study any evidence, documents or
statements that are contradictory or cast any doubt
on their validity.
 an auditor should not rely upon the assumption
that the management of the audited entity is acting
dishonestly, but he/she should also not suppose
that the management is immaculate.
Objectives of Public Procurement Audit
 Provide all interested users with independent,
objective and reliable information, conclusions and
opinions.
 Enhance accountability and transparency
 Encourage improvement and confidence in the
appropriate use of public funds
 Reinforces the effectiveness of management and
oversight bodies at inducing change.
 Audit of financial statements
 Operational Audit
 Compliance Audit