Question

1. Do you think it is practicable to use blind copy PO as a form of internal control? Explain.

2. Must all purchases be approved or authorized by the Purchasing Department head? Explain.

Answer 1

1. Internal control is strengthened by the use of a blind purchase order. A blind copy of the PO contains no quantity or price information about the products being received. The purpose of the blind copy is to force the receiving clerk to count and inspect inventories prior to completing the receiving report.

2.  The Contract Manager represents the Purchasing department’s approval. Approval at this workflow node indicates the following has taken place: • The Purchase Order has been processed and approved. • The bidding process “if required” for quotes has occurred. • Vendor selection has been finalized. • Each line item is identified with the correct commodity code. The Contract Manager will transmit the PO to the vendor only after the final approvals have taken place. Printing and transmission of the Purchase Order occur after all approvals. When the Contract Manager approves it, it may or may not be transmitted immediately; dependent upon any additional approvals needed.