Observation :

Lack of segregation of duties in procurement of administration and utility services w.r.t. selection, negotiation and finalization of service vendors. Vendors selection and negotiations of commercial terms is independently handled by user department without involvement of Sourcing team.

Souring team is involved only for making Outline Agreements and creating PO is SAP based on details of vendor and agreed commercial terms provided by user department.

 

 

Root cause :

  1.  Lack of clearly defined roles and responsibilities to ensure adequate segregation of duties

  2.  

 

Risk / Impact :

  1.  Risk of favoritism, misappropriations and unethical practices in the process of vendor selection and negotiations 

 

Recommendation :

  1.  Define clear roles and responsibilities for procurement of services to ensure segregation of duties w.r.t. selection, negotiation and finalization of service vendors.

  2. Authorize Sourcing team to select and finalize services vendors in consultation with user department