Identify the existing internal controls within SVCs purchase/payment process, and then recommend any control suggestions you have for increasing operational efficiency. What changes would you suggest to the current process to take advantage of information technology controls and databases specifically?

Senni Valley College (SVC) is a mid-sized campus employing approximately 200 fulltime faculty and 250 staff. Enrollment for the 2022-2023 academic year equals 12,023 students.

Purchasing Process: The college has an annual budget of about $18 million for purchasing equipment and supplies. Tim Hecker is the head of the Purchasing Department, and reports directly to the colleges Vice President of Finance. Hecker supervises 4 purchasing clerks and 5 receiving personnel. The department is responsible for purchases of all equipment and supplies except for computer equipment and software, and plant purchases or additions.

Payment Process: Various departments across campus manually fill out paper purchase requisition forms when they need equipment or supplies. Each department forwards these forms to the Purchasing Department. If the request is for computer equipment or software, the requisition is forwarded to the Department of Information Technology. Purchase requisitions are assigned to one of the three purchasing clerks by department. For instance one purchasing clerk makes purchases for all university departments beginning with the letters A through H (Accounting History). Purchasing clerks check the requisition to make sure that it is authorized and then consult the Approved Vendor Listing to find a supplier. The clerk may contact a supplier for pricing and product specifications. Once this task is complete, the purchasing clerk enters the purchase requisition and vendor and price information into the computer system, which prints out a multiple part purchase order. Clerks send copies of the purchase order to the Receiving Department, to the vendor, and to the Accounts Payable Department.

When Receiving receives an order, a receiving clerk consults the Purchase Order file to make sure that the correct product and quantity have been delivered. The clerk also checks the product for damage. Receiving does not accept any over-shipments. Receiving clerks forward accepted shipments to the adjacent warehouse for distribution to the appropriate department. Clerks file one copy of the Receiving Report, send one copy to the Purchasing Department, and forward a third copy to Accounts Payable.

Daniel Lopatin is the Supervisor of Accounts Payable. Two accounting clerks report to him. He assigns invoices to them for payment based on vendor name. One clerk processes payments for vendors A-M and the other clerk handles payments to all vendors with names beginning with letters N-Z. The clerks match each vendor invoice with a copy of the receiving report and purchase order before entering it into the computer for payment by due date. There are often discrepancies among the three documents. This requires frequent phone calls to the vendor, the Receiving Department, or Purchasing for resolution. As a result, the college frequently makes payments late and forfeits cash discounts.