Audit Requirements

Under the Single Audit Act, and OMB Circular A-133, auditors are required to assess internal control and compliance. In the area of procurement, this would include assessing the grantee agency’s written procurement procedures (including the approvals required, competition process, documentation records required, etc.), and may include reviewing a sample of actual purchases made during the audit year. However, since not all auditors perform their reviews in exactly the same way, the grantee agency may want to stipulate in the audit contract that the audit is to include assessment of the procurement process and controls.

Some of the types of audit findings in this area are:

• Not having required written procurement procedures (or having procedures that have not been updated to reflect the process actually in use).
• Not following grantee agency written procurement procedures.
• Not maintaining required supporting documentation in the procurement records.
• Not obtaining required approvals prior to purchase.
• Not determining whether a cost was allowable prior to purchase (which generally also results in a disallowance).
• Not providing open and free competition.