1. General
A control is an integral component of a public body that provides reasonable assurance that the objectives of the public body are being achieved in terms of efficiency and effectiveness of the operations, reliability of financial reporting, and compliance with applicable legislation and regulations. It is a series of actions and activities that occur throughout a public body’s operations and on an ongoing basis.
A public body shall ensure that the proper controls are in place for procurement respecting the security of bids, separation of duties and the authorization and approval of purchasing documents.
2. Security of Bids
Bid submissions for open and limited calls for bids shall be date and time stamped upon receipt and kept secure (i.e., locked box, locked file cabinet) that is only accessible to the staff responsible for competitive procurement control. Buyers or staff directly involved in the procurement process shall not hold a key to the locked facility or have access to the facility. Any submission received shall not be opened prior to the date and time of the opening. Bid submissions can only be retrieved by authorized staff if an open call for bids is cancelled or documents need to be accessed for some other justified reason. Management approval should be required prior to retrieving any bid submissions. Public bodies utilizing electronic bidding procedures shall ensure that protocols exist to maintain the security of bid submissions within the system.
3. Separation of Duties
Separation of duties is an essential internal control mechanism within the procurement process that helps prevent any fraud or misgivings from occurring. It reduces the exposure of inappropriate, unauthorized or unlawful expenditures and increases the integrity of the process.
There are primarily seven functional roles in the procurement process that should lie, to the extent practicable, with different departments or at a minimum, with different individuals. The purpose of separating responsibility for different activities among various personnel is to prevent one person from controlling the entire procurement process. It reduces the risk to the public body and protects against any improper activity.
Following is a chart displaying the typical procurement roles with the corresponding accountable party:
| Functional Role | Accountable Party |
|---|---|
| Preparation of Requisition | User requesting the commodity |
| Approval of Requisitions | Management/Budget Personnel |
| Issuance of Call for Bids | Procurement Personnel |
| Evaluation of Submissions | Procurement Personnel/End User |
| Issuance of Purchase Order | Procurement Personnel |
| Receipt of Commodities | End User |
| Payment of Invoices | Accounts Payable |
4. Approval Authorities
The purpose of an approval authority policy is to establish approval authorization limits for the procurement of goods, services, public works and lease of space to ensure that expenditures incurred by public bodies are approved by officials who have the responsibility, authority and accountability for such expenditures. Approval authorities are an internal mechanism used to control and monitor procurement activity.
The dollar value of the requirement will determine the level of approval that shall be obtained prior to commencement of any procurement process. It is important to ensure that the approval authorities are consistent with separation of duties.
Approval authorities are specific to each individual public body and it is necessary for each body to establish their own authority levels. The key items for which approval authorities are required are for authorization to purchase; approval of a requisition and issuance of a purchase order.