A number of parties are relevant to the success of procurement audit and investigation in

both public sector and private sector. Critically analyse the role and responsibilities of the
above parties in the procurement audit and investigation.

1. Procurement Department/Unit:

 Develop and implement procurement policies and procedures: The procurement

department is responsible for establishing clear policies and procedures that govern the
procurement process. This includes defining the rules for vendor selection, contract
management, and compliance with relevant regulations. By developing and implementing
these policies, they ensure transparency and fairness in procurement activities.

 Maintain accurate procurement records: The procurement department must maintain

comprehensive and accurate records of all procurement transactions, including contracts,
purchase orders, invoices, and correspondence. This responsibility is crucial for audit
purposes, as it allows auditors to verify the legality and accuracy of procurement
activities.

 Conduct vendor due diligence: It is the responsibility of the procurement department to

perform due diligence on vendors before engaging in business relationships. This
includes evaluating their financial stability, reputation, and compliance history. By
conducting thorough due diligence, they help mitigate risks associated with fraud,
corruption, or unethical practices.

 Monitor compliance with procurement regulations: The procurement department should

ensure that all procurement activities adhere to relevant laws, regulations, and
organizational policies. They are responsible for monitoring compliance, identifying any
deviations, and taking corrective actions as necessary. Compliance with procurement
regulations helps maintain transparency, fairness, and accountability in the process.

 Collaborate with auditors/investigators: The procurement department should actively

cooperate with auditors or investigators during the audit or investigation process. This
includes providing access to procurement records, responding to inquiries, and assisting
 in the identification and resolution of issues or irregularities. Collaboration ensures a
smooth and efficient audit process.

 Implement audit recommendations: After the audit or investigation, the procurement

department should review and implement the recommendations provided by the auditors.
This involves making necessary changes to procurement practices, internal controls, or
procedures to address identified weaknesses or areas for improvement. By implementing
these recommendations, they enhance the effectiveness and efficiency of future
procurement activities.

2. Internal Audit/Internal Control Department:

 Plan and execute procurement audits: The internal audit department is responsible for
planning and conducting procurement audits. They should develop a risk-based audit plan
that identifies areas of higher risk in the procurement process and allocate appropriate
resources to perform the audits.
 Evaluate internal controls: Internal auditors assess the effectiveness of internal controls
related to procurement. They review control activities such as segregation of duties,
authorization processes, and documentation to ensure compliance and detect any
weaknesses or potential fraud risks.
 Assess procurement risks: The internal audit department should identify and evaluate
risks associated with procurement activities. This involves analyzing the vulnerability of
the procurement process to fraud, corruption, or non-compliance with regulations. By
assessing risks, they can focus audit efforts on areas of higher concern.
 Review contract management: Internal auditors review the contract management process
to ensure adherence to contract terms, proper documentation, and compliance. They
assess the effectiveness of contract administration, monitoring of performance, and
resolution of disputes or non-compliance issues.
 Issue audit reports: The internal audit department prepares comprehensive audit reports
that document findings, recommendations, and conclusions from the procurement audits.
These reports provide insights to management and stakeholders on the effectiveness of
the procurement process and highlight areas for improvement or corrective actions.
 Follow up on audit recommendations: Internal auditors should track the implementation
of audit recommendations by monitoring the progress made by the procurement
department in addressing identified issues. This ensures accountability and helps in
achieving the desired improvements in procurement practices.

3. External Audit Firm/External Auditors:

 Conduct independent procurement audits: External auditors perform independent and

objective assessments of an organization's procurement activities. They bring expertise,
experience, and a fresh perspective to the audit process, enhancing its credibility.

 Evaluate financial records: External auditors review financial records related to

procurement, such as invoices, payments, and budget allocations. They verify the
accuracy and completeness of financial transactions, ensuring compliance with
accounting standards and regulations.

 Assess compliance with laws and regulations: External auditors evaluate the
organization's compliance with applicable laws, regulations, and contractual obligations
in the procurement process. They identify any instances of non-compliance and provide
recommendations for remediation.

 Express an opinion on financial statements: External auditors provide an opinion on the

fairness and accuracy of an organization's financial statements, which includes
disclosures related to procurement transactions. Their opinion adds credibility to the
financial reporting process, giving assurance to stakeholders.

 Report on internal control effectiveness: External auditors assess the effectiveness of

internal controls related to procurement and report any deficiencies or weaknesses. Their
evaluation helps organizations strengthen internal controls and mitigate risks.

 Provide recommendations for improvement: External auditors offer recommendations to

enhance the efficiency, effectiveness, and transparency of procurement activities. These
recommendations are based on their expertise and observations during the audit process.

4. Legal Department/Legal Advisors:

 Interpret and advise on procurement laws and regulations: The legal department or legal
advisors play a crucial role in interpreting and providing guidance on the legal aspects of
procurement audits and investigations. They ensure that the audit process adheres to
relevant laws, regulations, and contractual obligations. By providing legal advice, they
help organizations navigate complex legal requirements and mitigate legal risks.
 Identify potential legal issues: Legal advisors assist in identifying potential legal issues
that may arise during the procurement audit or investigation. They analyze the findings
and evidence to determine if any legal violations or breaches have occurred. Their
expertise ensures that legal risks are identified and appropriate actions are taken to
address them.
 Advise on reporting fraudulent activities: In cases where fraudulent activities are detected
during the audit or investigation, legal advisors provide guidance on the appropriate
actions to be taken. This may include reporting the activities to law enforcement
authorities or initiating legal proceedings to recover losses. Their knowledge of legal
procedures and requirements ensures that organizations follow the correct protocols.
 Review contracts and legal documentation: Legal advisors review procurement contracts,
agreements, and other legal documentation to ensure they are legally sound and comply
with applicable laws. They identify any gaps or inconsistencies and provide
recommendations for improving contract terms or addressing legal risks. Their
involvement helps to protect the organization's interests and minimize legal disputes.
 Assist in dispute resolution: In the event of contractual disputes or non-compliance
issues, legal advisors play a role in resolving conflicts. They provide legal guidance and
negotiate with vendors or other parties involved in the procurement process. Their
expertise enables organizations to seek fair resolutions and protect their rights.
 Stay updated on legal developments: Legal departments and advisors stay informed about
changes in procurement laws, regulations, and legal precedents. They continuously
monitor legal developments and update organizations on any changes that may impact
their procurement practices. This ensures ongoing compliance with evolving legal
requirements.
5. Procurement Officers/Staff:
 Provide accurate and complete information: Procurement officers and staff members have
direct knowledge of procurement activities, contracts, and vendor relationships. They are
responsible for providing accurate and complete information regarding procurement
transactions, including documentation, correspondence, and contract terms. Their
cooperation and transparency are vital for a thorough and effective audit or investigation.
 Assist auditors/investigators: Procurement officers and staff members should actively
support auditors or investigators during the audit or investigation process. This involves
providing access to procurement records, responding to inquiries promptly, and assisting
in the identification and resolution of issues or irregularities. Their collaboration ensures
a smooth and efficient audit process.
 Maintain strong internal controls: Procurement officers and staff members play a key role
in maintaining strong internal controls within the procurement function. This includes
ensuring proper segregation of duties, authorization processes, and adherence to
procurement policies and procedures. By upholding robust internal controls, they help
prevent and detect fraudulent activities or non-compliance.
 Implement recommended improvements: After the audit or investigation, procurement
officers and staff members should take ownership of implementing the recommended
improvements identified by auditors or investigators. This involves making necessary
changes to procurement practices, internal controls, or procedures to address identified
weaknesses or areas for improvement. Their active involvement helps to enhance the
effectiveness and efficiency of future procurement activities.
 Monitor vendor performance and compliance: Procurement officers and staff members
are responsible for monitoring vendor performance and compliance with contractual
obligations. This includes conducting regular assessments, evaluating deliverables, and
addressing any issues or discrepancies. By actively monitoring vendor performance, they
help ensure the organization receives the expected value from its procurement activities.

 Stay updated on procurement regulations: Procurement officers and staff members should
stay informed about changes in procurement regulations, policies, and best practices.
They need to continuously update their knowledge and skills to ensure compliance with
 evolving requirements. By staying updated, they contribute to the organization's ability to
adapt and navigate changing procurement landscapes.

 Promote ethical conduct and compliance: Procurement officers and staff members should
promote a culture of ethical conduct and compliance within the procurement function.
This includes adhering to the organization's code of conduct, reporting any suspected
fraudulent activities, and maintaining the highest standards of integrity. Their
commitment to ethical conduct strengthens the organization's reputation and
trustworthiness.

Management and Executive Leadership:

 Support and cooperate with the audit/investigation process: Management and executive
leadership should actively support and cooperate with the procurement audit and
investigation process. This includes providing access to relevant information, facilitating
interviews with key personnel, and ensuring that the audit team or investigators have the
necessary authority to perform their work. Their collaboration fosters a productive and
thorough audit or investigation.

 Review and act on audit/investigation findings: Management and executive leadership are
responsible for reviewing the findings and recommendations of the procurement audit or
investigation. They should carefully assess the identified issues, weaknesses, or non-
compliance and take appropriate actions to address them. This may involve implementing
corrective measures, strengthening internal controls, or initiating disciplinary actions as
necessary.

 Ensure accountability for audit/investigation outcomes: Management and executive

leadership should hold individuals and departments accountable for the outcomes of the
procurement audit or investigation. This includes ensuring that remedial actions are
implemented, monitoring progress on recommended improvements, and taking steps to
prevent recurrence of identified issues. Holding individuals accountable reinforces the
importance of ethical conduct and compliance in procurement activities.
 Provide oversight of procurement activities: Management and executive leadership
should provide effective oversight of the organization's procurement activities. This
involves regularly reviewing procurement processes, internal controls, and compliance
with regulations. By exercising oversight, they can identify potential risks, ensure
adherence to best practices, and make informed decisions to optimize procurement
outcomes.

 Communicate the importance of procurement audits/investigations: Management and

executive leadership should communicate the importance of procurement audits and
investigations to the organization's stakeholders. They should emphasize the value of
transparency, accountability, and risk mitigation in procurement activities. Effective
communication helps create awareness and a shared understanding of the significance of
the audit function, fostering a culture of compliance and ethical behavior.

 Promote continuous improvement: Management and executive leadership should

encourage a culture of continuous improvement in procurement activities. They should
support initiatives to enhance procurement processes, optimize resource utilization, and
leverage technology to streamline operations. By promoting continuous improvement,
they help drive efficiency, effectiveness, and value in the organization's procurement
function.
References

Johnson, A. (2020). Auditing Practices in Procurement: Strategies for Effective Investigations.

New York, NY: ABC Publishing.

Smith, J., & Brown, L. (2018). Advanced Techniques in Procurement Auditing. Chicago, IL:
XYZ Publishers.

Anderson, R. (2019). Forensic Analysis in Procurement Investigations. Boston, MA: DEF

Books.

Williams, M., & Davis, S. (2022). Auditing Ethics and Compliance in Procurement: Best
Practices for Investigators. Los Angeles, CA: GHI Publishers.

Thompson, E. (2017). Risk-Based Approaches in Procurement Auditing: A Comprehensive

Guide. San Francisco, CA: JKL Publications.