Procurement compliance checklists are vital not only for your risk management strategies, but also your entire procurement process in regards to prevention and detection of fraud and corruption. A well-crafted compliance checklist can ensure that your staff stays transparent throughout the procurement process, and has the necessary guidelines in place to detect and report irregularities.
To help you craft an effective compliance checklist for your organization and to ensure your business adheres to the particular procurement rules and regulations in your areas of operation, we’ve compiled three compliance checklists from around the world: U.S. Organization of Economic Cooperation and Development, European Union and Hong Kong Independent Commissions Against Corruption. Each of these checklists outlines the different concerns in each region so that your company can successfully implement user-friendly and easy-to-apply checklists structured around the major phases of the procurement cycle.
U.S. Organization of Economic Cooperation and Development
The U.S. Organization of Economic Cooperation and Development (OECD) offers one of the most comprehensive checklists that has ever been developed. It’s meant as a practical tool that can be applied, adapted and developed for various organizations and in different legal contexts. There are two main parts to the checklist:
- Part 1: This part of the checklist is focused on guiding policy makers with 10 key recommendations for developing an adequate policy framework for enhancing integrity in public procurement.
- Part 2: The second part of the checklist is most vital and provides guidance on how your business can implement the framework at each stage of the procurement process from pre-tendering to order and payment.
The checklist created by the OECD is also focused on preventing bid rigging in public procurement by first reducing the risk of rigging with a checklist outlining how to design a procurement process and second by creating a list for detecting bid rigging. In particular, the bid rigging lists outline the seven most vulnerable areas of procurement, so your staff can practice extra vigilance. Finally, the OECD created a compliance checklist to help developing countries and donors identify the highest quality and most effective procurement systems.
The European Union created four unique procurement compliance checklists to guard and guide the procurement process. Each checklist was developed by a different facet or institution in the EU to focus on a different portion of the procurement process.
- Financial Audit Procurement: This checklist was developed by the Working Group (WG) on Public Procurement of the Contact Committee of the Supreme Audit Institutions of the European Union to be relevant and applicable to auditors operating within different frameworks, requirements and procedures. The compliance checklist first analyzes the procurement function throughout the major phases and focuses on fraud and corruption risks as well as works and supplies as a frequent form of direct contracting.
- EU Structural Instruments: This compliance list, developed by the DG regional policy of the EU, provides a list of fraud schemes and related fraud indicators that would be relevant in the area of structural action.
- European Social Fund: This checklist follows the various steps of the procurement process and provides a list of key questions and requests your business should use for documentation supporting procurement.
- First Level Control: To ensure that your business adheres to all EU directives and procurement rules, the European Territorial Cooperation developed this list.
Hong Kong Independent Commissions Against Corruption
The Hong Kong Independent Commissions Against Corruption (ICAC) crafted a single compliance checklist for use by small and medium businesses. The checklist is unique thanks to its target audience as well as its user-friendly and down-to-earth approach. The ICAC checklist provides tips and practical guidance for enterprises at each stage of the procurement process and helps those same businesses develop sound and competitive procurement processes by providing effective and practical measures of control at each stage. Companies are advised to adopt the recommended measures within the checklist regarding their organizational structure, resource capability, operational needs and risk exposures.
By understanding the different procurement compliance checklists used around the world, your business should be better able to develop its own effective checklist as well as adhere to the best practices of procurement in each region where your organization does business. Your business can take the best of each to create an effective compliance checklist.