Memorandum
TO: All Employees
FROM:
DATE:
SUBJECT: Audit of Approved Vendors List
Findings
At least 20 percent of the vendors currently used by Sedco are not on the approved vendors list as required by written procedures.
Recommendations
We recommend the objectives and procedures of this vendor control be re-communicated to all involved individuals. Accounts Payable should compare invoices to the approved list and return invoices from unauthorized vendors to the appropriate manager for proper handling. The manager in charge must approve all additions to the vendors list. All departments should update their approved lists by September 30.
Background
Sedco’s written procedure states: “Corporate business will be conducted only with vendors or contractors that are on Sedco’s approved vendors and contractors list. Any additions to this list must be made by the appropriate manager.”
The purpose of this control is to ensure we are doing business with reputable, established vendors. Therefore, all departments should take care to see that their lists are updated and that decisions about additions to the list remain with the appropriate managers rather than first-level supervisors.
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