Due to the complex nature of procurement, creating a compliance checklist is one of the most important things your company can do. It’s vital for your risk management strategy, as well as to outline the procurement process and protect it from fraud and corruption.

A well-designed compliance checklist reflects good practices in procurement and provides a set of indicators used to assess and ensure adherence to your organization’s procurement rules and regulations. For successful implementation of a compliance checklist, it should be designed to be user-friendly and easy to apply and supported. To get started, it’s necessary to understand the content and structure of the checklist as well as how to implement it.

 

Content and Structure

Compliance checklists are usually a part of a broader set of measures implemented by your company to establish clear reporting procedures, effective complaint reporting, protection and internal and external controls. The checklist provides the piece of the puzzle that focuses on effectively monitoring your procurement processes and identifying and detecting fraud and corruption. There are four key elements to the content and structure of the compliance checklist: procurement guidelines, transparency, fairness and recourse strategy.

Transparency

A compliance checklist is only effective if all of your procurement procedure steps are outlined and based on open, predictable, known and written procedures. It should include, but is not limited to:

  • All processes and criteria necessary for obtaining and awarding contracts, to ensure that all bidders are treated equally
  • How to notify the public of bidding opportunities
  • Details on documenting the contract award decision and notification

Fairness

Your compliance checklist should also guide your procurement officers through the process of ensuring all competent suppliers are provided equal opportunities to participate in your contracts. The compliance checklist should include, but is not limited to:

  • Information on the impartial evaluation and comparison of bids
  • Documents clearly outlining the contracting process, terms and conditions and criteria for award
  • How to implement effective supervision of contract implementation

Recourse Strategy

It’s also just as important for your compliance checklist to include a transparent procurement process that outlines how bidders and contract winners can openly and independently contest decisions. The contestation mechanism should be publically shared so all bidders have the opportunity and ability to share complaints.

Implementing the Checklist

Compliance checklists are usually structured around the key stages of the procurement cycle from identifying the need, defining the contract, tendering the process, awarding the contract and managing its implementation. The format, purpose and implementation of the checklist make implementation seamless.

Format

There is no default format for a procurement checklist. It should be tailored to each organization and your particular procurement policies and guidelines. Make the list as user-friendly as possible. A compliance checklist that is easy to use and follow, and that makes the procurement process even simpler, is one that is more likely to be used.
The format should provide a practical step-by-step approach throughout each stage of your procurement process. It can consist of simple yes/no questions, as well as more elaborate lists or details on objectives, risks, criteria and policy references. As long as the format matches your guidelines with each step in the process, it will be useful for your staff.

Ensuring It Gets Used 

To ensure successful implementation, you should make the design of a checklist a participatory development process. Involve key experts and staff in the development of your list—particularly those who will be directly affected by the new processes—so they can provide input on the format, risk rating and reports throughout the project cycle.
In addition, it’s important to regularly raise awareness about the importance of using the compliance checklist tool. Training new employees should not only focus on procurement rules and procedures, but also on how to use the checklist to identify fraud and corruption, and why that is vital to the business. The more the compliance checklist can be woven into every part of your procurement department, the easier it will be to implement.