The objectives of this audit report are to obtain an overall, high-level understanding of the accounts payable process and related functions; evaluate the adequacy and effectiveness of key internal controls and overall operational effectiveness related to the accounts payable and disbursements process; assess the existence and adequacy of policies and procedures; and identify opportunities for process and control improvement.
Key issues noted in this review include:
- Access to the various systems utilized during the AP process is not adequately secured or monitored.
- Invoices are paid prior to the verification of the receipt of goods.
- There are no approval and authorization procedures for supplier selection prior to the purchase of goods.
- A purchase order system or other upfront approval process is not used for recurring expenses or non-merchandise related purchases.
- Proof of receipt is not required to be submitted with approved invoices prior to payment.
- Two versions of the vendor master file are utilized and maintained.