I've Heard that Mohave Audits Purchases, How Does that Work?

Sue Watts, Accounting Manager

I want to thank all the members who are responding so well to our requests to pay the invoices billed to them under the old process. The biweekly requests for information continue to go out to you. Remember, if there is a problem with an invoice, if the product was damaged or items were missing, if the work that has been billed has not been done, we don’t know it if you don’t tell us. As a result, we assume the invoice is correct, and it is due to Mohave within 25 days of the invoice date.

In addition to winding down the old procedure, the accounting staff is learning to audit contract compliance under the new Mohave procedures. Terry McClintock has written a detailed audit process, which will document compliance with the terms of the contract. The goal set for the Mohave's accounting specialists is to audit at least three purchase orders for each vendor and at least one purchase order for every member.

To reasonably satisfy contract compliance, the accounting specialist will select purchase orders to audit based on the dollar value and variety of product. This will ensure that we are seeing a sufficient representation of pricing and invoicing procedures by the vendor.

The accounting specialist will email the vendor audit contact requesting all documents pertaining to the selected purchase orders, with a specific date the documents are needed.

When the documents are received, they are date stamped and inspected to confirm that they are for the correct purchase order. These documents are compared to records Mohave already has that relate to the purchase order.
We will scan these documents into an Auditor’s File. This will provide a record of all documents in the original condition they were received. The accounting specialist will also build a paper file with working documents.

The accounting specialist first pulls and reviews the contract book and the price book. These books provide the Terms and Conditions, Best and Final Pricing, freight and tax information and any Special Terms and Conditions and Scope of Work. After the accounting specialist has reviewed and understands the terms of the contract, specific pricing for the product on the documents requested is pulled and compared to the pricing on the vendor invoices. The specific file name, page number and/or line number is recorded on the working document for pricing on every product on the vendor invoice. All documents will be examined to determine that the Terms and Conditions, pricing, product on contract, freight, and ancillary charges have been billed according to the contract and that sales tax appears to be reasonable for the location and product provided.

When the audit is complete and any problems discovered have been resolved, the accounting specialist completes a checklist to ensure that all steps of the audit have been finished. This checklist along with all the working documents becomes a part of the paper file and is reviewed by Terry McClintock, Audit Specialist II, or Sue Watts, Accounting Manager.

This audit procedure has been established to ensure contract compliance and to provide the level of service that Mohave has always provided to both vendor and member. We anticipate that this procedure will be reviewed and clarified as we perform audits.

If you have questions or comments, please email Sue Watts, Accounting Manager, at sue@mesc.org.

3/3/08, SW