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Procurement is the process of acquiring goods, works or services by an organization.
Audit is the examination of books of account and financial statements of an organization by an independent person known as an auditor.
Auditing is the independent examination of books of account, vouchers and financial statements of the business entity by the auditor to ascertain whether they reflect a true and fair view of the organization state of affairs as at the end of the financial period.
The examination of accounting records undertaken with the view to establish whether they correctly and completely reflect the transactions to which they relate.
An audit is an appraised activity undertaken by an independent practitioner e.g. Auditor to provide reasonable assurance to a principal e.g. Shareholders
Audit involves performing procedures to obtain evidence about the amounts and disclosures in the financial statements and it includes evaluating appropriateness of accounting estimates made by the management as well as the overall presentation of financial estimates.
An audit is an instrument of financial control which acts as a safeguard on behalf of the owners of a business entity against extravagance, carelessness or fraud on the part of the owners, agents or servants the realisation and utilization of money/assets bestowed to them.
Procurement Audit is the examination and scrutiny of the whole procurement process/system of an organization to assess the appropriateness and effectiveness of the management control framework in place to support its procurement activities in compliance with the legal framework of procurement activities and standards of good professional practice.
It is a systematic and independent analysis to determine whether the procurement activities and results of those activities correspond to the planned demands and whether those demands are effective and suitable to achieve organization objectives.
It is the process of gathering and evaluating sufficient audit evidence on government procuring activities to ascertain and report whether specified, laid down procedure, guidelines and regulations have been complied with.
Procurement audit is conducted with the aim of reviewing and examining the whole procurement process, systems and activities undertaken in an organization to find out the extent of compliance with the established laws, regulations and guidelines.
It encompasses setting out audit objectives, sample selection, risk mapping (assessment), obtaining, obtaining sufficient audit evidence, drafting, findings and making recommendations in a procurement audit report. It aims to provide reasonable assurance that:

  • An adequate management control framework is in place to effectively support procurement activities of an organization.
  • Procurement activities are processed in a manner compliant with applicable policies, procedures, law and guidelines.
  • Procurement award procedures are legal and public resources are being spent in line with applicable criteria.
  • Procedures followed are likely to achieve value for money and have safeguarded competition, transparency, equal treatment and accountability.

A sound and compliant process significantly reduces the risk that inappropriate and unauthorized procurement transactions are made by an organization.

Purpose of the procurement audit

The main purpose of procurement audit is to assess compliance and value for money in procurement processes for goods, works and services of procuring entities in accordance with the legal framework of public procurement in the country and the standards of good professional practice.
The goal is to assess appropriateness and effectiveness of the management control framework in place in support contracting and procurement activities in organization.

Objectives of the Procurement Audit

The main objective of procurement audit is to ensure the procurement activities are done in an efficient, effective and economic manner within the provisions of the relevant regulations in the guidelines.
The objectives can be viewed in 4 dimensions as follows:

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