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Procurement Policies, Procedures and Controls Policies, Eliminiating fraud, spend limits, authorisations, transactional reporting.

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  #1  
Old 08-24-2006, 05:12 PM
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Default Authorisation Levels

We're trying to get some consensus on the process (incl number of quotes) that buyers should obtain based on the value of items to be purchased.

A mining company I dealth with recently had the following process:
  1. A requisition is generated in SAP for non-contract goods or services
  2. The requisition follows the release approval process within SAP.
  3. If items in requisition is not on material master, a codifier creates an item on the materials master.
  4. The approved requisition is forwarded via SAP to the appropriate buyer coordinator.
  5. The buyer coordinator issues an request for proposal to approved suppliers:
  6. To one approved supplier for items below R5000
  7. To three approved suppliers for items between R5000 and R10,000
  8. Suppliers respond verbally (items below R5000) and by fax (items between R5000 and R10,000)
  9. Buyer adjudicates and places order via SAP
  10. Receiving and accounts payable follows

Any ideas on doing it differently? Point 3 could be quite hard to implement?
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Last edited by bernievn : 08-24-2006 at 05:18 PM.
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Old 08-28-2006, 11:51 AM
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Default Re: Authorisation Levels

1. Regular investigation of non-stock requisitions will provide info re repetative items for possible coding/contract (Need good reporting though)
2. Alternative: Items can be loaded as "order as required" and from movement history decisions can be made whether to carry stock (need constant material master management, should do this for selective items only to prevent unmanageble catalogue.)
3. RFQ method OK but not verbal quote - disputes arise frequently
4. 2 quotes between 5000-10 000
5. 3 quotes above 10 000 & tender procedure above 100 000

Last edited by bernievn : 08-28-2006 at 02:46 PM.
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Old 08-28-2006, 02:46 PM
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Default Re: Authorisation Levels

Thanks for a good comment.

By the way, what percentage of no items does your company have codified?
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Old 08-28-2006, 03:45 PM
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Default Re: Authorisation Levels

Still getting to know this site - reply might find you twice.

60% coded - not ideal am in process of streamlining processes to change this figure.

Should you be interested in how, etc. I would gladly share some info & would welcome any views, comments.
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Old 08-31-2006, 03:59 PM
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Default Re: Authorisation Levels

<5000 - 1 quote, either verbal/written
>5000 to 100000 - 3 written quotes
>100000 - tender proces
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Old 09-04-2006, 10:00 AM
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Default Re: Authorisation Levels

Company policies should control such processes. If an appropriate delegation policy exist, then the process should be aligned to the delegation policy. Therefore it is key that the SCM (supply chain management) guidlines should be followed to align our policies and processes to it.
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Old 09-05-2006, 07:24 PM
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Default Re: Authorisation Levels

Government:
< 5000 Petty cash - 3 Verbal quotations/fax etc.
>5000 to 30 000 3 hardcopy quotations - Cheapest price evaluation.
>30k <200k 3 hardcopy quotations - 80% price 20% equity
> 200k Tender 90% price 10% equity.

However our tender module can easily be customised to include anything ie functionality, locality or any such as evaluation criteria.

We implement a whole solution suite that totally eliminates or at the least gives full control and traceability on all exclusions etc. therefore eliminating fraudulent awards of contracts/quotations.
Username will be linked to a profile/s depending on his status ie. buyer or controller which will influence his ability to exclude, adjudicate and award tenders/quotations and to what amount a full audit trail is also available at any time. Suppliers in the quotation module are also rotated to facilitate equal opportunities to all suppliers in the supplier database.

etc etc etc
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Old 04-04-2007, 03:59 PM
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Default Re: Authorisation Levels

Nomatter what process to put in place please be cost effective because procurement is a money saving profession.
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Old 05-22-2007, 11:30 AM
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Default Re: Authorisation Levels

Dear Member

My suggestion is as below:

The procurement policies and procedure governs the purchase of such goods and services. Procedural lapses in public sector organization leads to serious consequences during auditing.

Regards

Nagarajan
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Old 05-22-2007, 02:33 PM
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Default Re: Authorisation Levels

Dear Ngarajan,
I quiet agree with you because the ethical conduct in purchasing and supply is in support of 100% accountability be it in private or public sector. In the same vein some organization if not all try to inculcate while formulating their policies and procedures.
Best regards,
Bennett.
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