State Of Connecticut Accountability Directive Number 1 (Revised) State Agency Internal Control Questionnaire - Procurement and Payables

YES NO N/A Notes
Reference
PART A: This section should be completed by all applicable agencies
PROCUREMENT (Purchasing)
Statutory References - CGS 4-98
1. Are separate individuals responsible for the following functions?
a. Requisitioning ______ ______ ______ ______
Requisition Approval ______ ______ ______ ______
Purchasing ______ ______ ______ ______
b. Receiving ______ ______ ______ ______
c. Invoice Preparation and Processing ______ ______ ______ ______
d. Accounts Payable ______ ______ ______ ______
e. General Ledger Functions ______ ______ ______ ______
Disbursement Approval ______ ______ ______ ______
In the absence of compensating controls, if you answered "NO" to more than one item on this list, there is an indication of lack of segregation of duties and your internal control structure may be weak.
Procedural Controls
Requisitioning:
2. Is the initiation of goods and services purchases properly approved using requisitions bearing the authorization of officials designated for this duty? ______ ______ ______ ______
3. Are prenumbered requisitions used and accounted for? ______ ______ ______ ______
4. Is the appropriation to be charged on the purchase requisition indicated by the person requesting the purchase? ______ ______ ______ ______
5. Before commitment, does the accounting or budget department verify that there are sufficient unobligated funds remaining under the appropriation to meet the proposed expenditures? ______ ______ ______ ______
6. Do technical specifications accompanying requests for special purpose (nonshelf items) materials or personal services? ______ ______ ______ ______
Purchasing:
7. Are purchase orders used for all purchases? ______ ______ ______ ______
8. Are purchases made in accordance with applicable legal requirements? ______ ______ ______ ______
9. Are purchasing authorizations structured to give appropriate recognition to the nature and size of purchases and the experience of purchasing personnel? ______ ______ ______ ______
10. Do procedures exist to prohibit splitting orders to avoid higher levels of approval? ______ ______ ______ ______
11. Are competitive bids required and bid copies retained on file? ______ ______ ______ ______
12. Do procedures exist for public advertisement of nonshelf item procurements in accordance with legal requirements, if any? ______ ______ ______ ______
13. Are an adequate number of price quotations obtained before placing orders not subject to competitive bidding? ______ ______ ______ ______
14. Are price lists and other appropriate records of price quotations maintained by the purchasing department? ______ ______ ______ ______
15. Are purchase orders:
a. Prenumbered and used in sequence? ______ ______ ______ ______
b. Initiated on the basis of purchase requisitions approved by a responsible employee? ______ ______ ______ ______
16. Are copies of purchase orders distributed to:
a. Vendors? ______ ______ ______ ______
b. The acquiring department and placed in historical vendor files? ______ ______ ______ ______
c. Accounting? ______ ______ ______ ______
d. Receiving? ______ ______ ______ ______
e. Others? (list) ______ ______ ______ ______
_______________________________________ ______ ______ ______ ______
_______________________________________ ______ ______ ______ ______
17. Are purchase orders required to have independent approval that:
a. An appropriation exists for the purchase contemplated? ______ ______ ______ ______
b. A sufficient amount is available in the appropriation account to which the purchase is chargeable? ______ ______ ______ ______
18. Is the numerical sequence of purchase orders checked and appropriate action taken on those open beyond the usual processing time by an employee independent of initiation of purchases? ______ ______ ______ ______
19. Is there is a proper cutoff of purchases at the end of the fiscal year? ______ ______ ______ ______
20. Are changes to contracts or purchase orders subjected to the same controls and approvals as the original agreements? ______ ______ ____________
21. Is an adequate record of open purchase orders and agreements maintained? ______ ______ ______ ______
22. Do procedures exist that prohibit or adequately control purchases made for the accommodation of employees? ______ ______ ______ ______
Receiving:
23. Are receiving reports prepared for all purchased goods, and is the receiving department properly notified? ______ ______ ______ ______
24. Are steps taken to ensure that all goods received are accurately counted and examined to see that they meet quality standards? ______ ______ ______ ______
25. With respect to procurements of special purpose materials, services, or facilities, is a State technical representative assigned to monitor and evaluate contractor performance and approve receipt of services? ______ ______ ______ ______
26. Do procedures exist for the filing of claims against carriers or vendors for shortages or damaged materials? ______ ______ ______ ______
27. Does the receiving department report shortages, rejections, etc., to:
a. Purchasing? ______ ______ ______ ______
b. Accounting? ______ ______ ______ ______
28. Is a permanent record of material received maintained by the receiving department, along with a permanent chronological record of receipts? ______ ______ ______ ______
29. Are copies of receiving reports sent directly to purchasing, accounting and, if appropriate, inventory record keeping? ______ ______ ______ ______
30. Are controlling receiving reports accounted for numerically (or otherwise) to ensure that all are reported to the accounting department? ______ ______ ______ ______
31. a. If a receiving department is not used, are adequate procedures in place to ensure that goods that have been paid for have been received? ______ ______ ______ ______
b. Is the verification that goods have been received and meet quality standards done by someone other than the individual approving payment? ______ ______ ______ ______

payments flowchart

PAYABLES (Payments)
Statutory References - CGS 3-25, 3-112, 3-117, 4-69, 4-86, 4-89, 4a-71
Invoice Processing:
1. Are there invoice processing procedures that ensure that:
a. Copies of purchase orders and receiving reports are received directly from issuing departments? ______ ______ ______ ______
b. Invoice quantities, prices, and terms are compared with those indicated on purchase order? ______ ______ ______ ______
c. Invoice quantities are compared with those indicated on receiving reports? ______ ______ _____ ______
d. Accuracy of calculations is checked,as appropriate? ______ ______ ______ ______
2. a. Are all copies of vendors' invoices:
Routed directly to accounting from the mail room? ______ ______ ______ ______
Duplicate invoices are destroyed or stamped to indicate that they are duplicates? ______ ______ ______ ______
b. Are original vendors' invoices:
Invoiced and listed/recorded in an invoice/purchases register immediately on receipt? ______ ______ ______ ______
Maintained in the accounting department and only copies distributed when required? ______ ______ ______ ______
3. Do procedures exist to ensure that the accounts payable system is properly accounting for unmatched receiving reports and invoices? ______ ______ ______ ______
4. Do procedures exist for processing invoices that do not involve materials or supplies (for example, lease or rental payments, utility bills)? ______ ______ ______ ______
5. Do procedures exist to ensure accurate account distribution of all entries resulting from invoice processing? ______ ______ ______ ______
6. Is access to EDP master vendor file limited to employees authorized to make changes? ______ ______ ______ ______
7. Does the accounting department maintain a current list of those authorized to approve expenditures? ______ ______ ______ ______
8. Do procedures exist for submission and approval of reimbursement to employees for travel and other expenses? ______ ______ ______ ______
9. Is control established by the accounting department over invoices received before releasing them for departmental approval and other processing? ______ ______ ______ ______
10. Are the distribution of charges in the accounting department reviewed by a person competent to pass on the propriety of the distribution? ______ ______ ______ ______
11. a. Are vouchers (CO-17 document type)invoices prenumbered and in numerical sequence? ______ ______ ______ ______
b. Are invoices periodically checked byan employee independent of voucher preparation? ______ ______ ______ ______
12. Are invoices (vouchers) reviewed and approved for completeness of supporting documents and required clerical checking by a senior employee? ______ ______ ______ ______
13. In processing the invoice and related payable:
a. Are all data thereon checked to approved copies of the purchase order and receiving report? ______ ______ ______ ______
b. Are all extensions, footings, discounts, and freight terms checked for accuracy as required by established policy? ______ ______ ______ ______
c. Is the performance of (a) and (b) clearly indicated on the face of the invoice? ______ ______ ______ ______
14. If an invoice is received from a supplier not previously dealt with, are steps taken to ascertain that the supplier actually exists? ______ ______ ______ ______
15. Are payments made only on the basis of original invoices? ______ ______ ______ ______
16. Is responsibility fixed for seeing that all cash discounts are taken and, if applicable, that exemptions from sales, federal excise, and other taxes are claimed? ______ ______ ______ ______
17. Are differences in invoice and purchase order price, terms, shipping arrangements, or quantities referred to purchasing for review and approval? ______ ______ ______ ______
18. Are partial deliveries recorded and followed up by the accounting department? ______ ______ ______ ______
19. Are the accounting and purchasing departments promptly notified of returned purchases and are such purchases correlated with vendor credit advances? ______ ______ ______ ______
20. Are debit memos for returned goods shortages, etc.:
a. Issued only on receipt of proper authorization? ______ ______ ______ ______
b. Controlled numerically? ______ ______ ______ ______
21. Are vendor debit balances periodically reviewed and collected? ______ ______ ______ ______
22. Are the program and expenditure account to be charged reviewed for propriety and budget conformity? ______ ______ ______ ______
23. Do responsible officials determine that restricted revenues are expended only for restricted purposes? ______ ______ ______ ______
24. If applicable, do procedures exist to ensure that the reserve for encumbrances (obligations) is adjusted when invoices are prepared for payment? ______ ______ ______ ______
Accounts Payable and Encumbrances:
25. Is there a monthly reconciliation of outstanding purchase orders to the reserve for encumbrances? ____________ ______ ______
26. Is the recording encumbrance entries based only on approved purchase orders? ______ ______ ______ ______
27. Do procedures exist to ensure that accounts payable and encumbrances are applied against the appropriate account? ______ ______ ______ ______
28. Do procedures exist to ensure that department heads are notified of the payments made against accounts payable and encumbrances? ______ ______ ______ ______
Common Ledger:
29. Are trial balances of reserve for encumbrances and accounts payable prepared regularly? ____________ ______ ______
30. Does an employee other than the accounts payable clerk checking the footing and test the trial balances to the individual items as well as compare the total to the general ledger balance? ______ ______ ______ ______
31. Are posting transactions between funds in all affected funds done in the same accounting period and on a timely basis? ______ ______ ______ ______
Purchasing:
32. Are policies regarding conflicts of interest and business practice policies (code of conduct) established, documented, and distributed? ______ ______ ______ ______
33. Are procedures for issuing and approving purchase orders and contracts established? ______ ______ ______ ______
34. Are bid and performance bonds considered when awarding construction contracts? ______ ______ ______ ______
35. Are selection criteria predetermined for awarding personal service or construction contracts and is adequate documentation of the award process required? ______ ______ ______ ______
36. Are purchase prices reviewed periodically by a responsible employee independent of the purchasing department? ______ ______ ______ ______
37. Are recurring purchases reviewed periodically and is the justification for informal rather than competitive bids documented? ______ ______ ______ ______
38. Is a record of suppliers who have not met quality or other performance standards maintained by the purchasing department? ______ ______ ______ ______
39. If practicable, is there rotation of contract or purchasing officer's areas of responsibility on a regular basis? ______ ______ ______ ______
Invoice Procedures:
40. Are requests for progress payments under long-term contracts related to contractor's efforts and are they formally approved? ______ ______ ______ ______
PROCUREMENT AND PAYABLES PART B: This section to be completed only by agencies that administer grants or entitlement payments.
Grants and Contracts:
1. Are procedures modified when grant or loan agreements and related regulations impose requirements that differ from the organization's normal policies? ______ ______ ______ ______
2. Are procedures instituted to identify costs and expenditures not allowable under grant (federal/state) program before orders are entered? ______ ______ ______ ______
3. Do contracts contain provisions for materials, services, or facilities acquired on other than a fixed price basis and for an audit of contractors' costs, with payments subject to audit results? ______ ______ ____________
Grant and Entitlement Monitoring:
4. Are grants disbursed only on the basis of approved applications? ______ ______ ______ ______
5. Are reporting and compliance requirements defined (e.g., in regulations) and communicated to grantees? ______ ______ ______ ______
6. Do procedures exist to monitor grantee compliance with grant terms? ______ ______ ______ ______
7. Are the financial operations of grantees subject to periodic and timely audit? ______ ______ ______ ______
8. Does sufficiently timely monitoring of recipients exist to permit curtailment of any abuse before complete funds disbursement? ______ ______ ____________
9. Are funds disbursed to grantees only on an as needed basis? ______ ______ ______ ______
10. Is there a level of grant approval authority that appears appropriate? ______ ______ ______ ______
11. Is the failure by grantees to meet financial reporting requirements investigated on a timely basis? ____________ ______ ______
12. Are grantees required to evidence correction of previously detected deficiencies before approval of an extension or renewal of a grant? ______ ______ ______ ______
13. Do entitlement procedures exist to ensure that statistics or data used to allocate funds are accurately accumulated (for example, census bureau forms)? ______ ______ ______ ______
14. Are statements of recipient compliance with entitlement conditions required to be filed and are they reviewed by a responsible official? ______ ______ ______ ______
15. Are audited financial statements or other compliance requirements of entitlement recipients reviewed on a timely basis and are unusual items investigated? ______ ______ ______ ______
DO NOT WRITE IN THIS BOX --AUDITORS USE ONLY
Preliminary opinion on the above Internal Control matters:
Procurement and Payables
Good Fair Poor

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