Follow-Up of Change Order Processes, November 2018

2. Compliance with SOP #7 – Processing Change Orders . Observation SOP #7 stipulates that when a procurement analyst is notified of a Change Order request assignment via the electronic Help System, the Change Order Request Form and supporting documentation are to be downloaded and saved in the departmental electronic filing system. The procurement analyst is responsible for reviewing the documents, verifying that the supporting documentation matches the request and the contract’s fee schedule, if applicable. Validating that the request, if processed, would not exceed the procurement amount that was approved or the not-to-exceed amount, if applicable, is to occur. Additionally, SOP #7 requires that if the request is to reduce a line item on the purchase order, the procurement analyst is responsible for verifying that if the change order was processed, the amount on the line item would not be reduced by more than the payments already made for that line item. If the change order is to increase the amount of an issued purchase order with an associated Term Contract, the procurement analyst must ensure that a Term Contract Authorization Form (TCAF), signed by the Financial Agent responsible for managing the Term Contract, has been submitted via the Help System. During review of the 442 change orders in the sample, the auditor identified: • nine (9) processed change orders lacked documentation to support the approval of the change order. • two (2) instances where the processed change order did not match the Change Order Request Form. • two (2) instances where the processed change order reduced a line item by more than the payments already made for the line item. • three (3) instances where the change order request did not include the required TCAF. Recommendation To ensure compliance with SOP #7, develop and implement quality assurance processes to ensure that: • adequate documentation is received and retained to support change order requests, • processed change orders match the Change Order Request Form, • requests to reduce a line item by more than payments already made on that line item are not processed, and, • requests to increase an issued purchase order associated with a Term Contract includes an approved TCAF. 8 | A u d i t o f C h a n g e O r d e r P r o c e s s e s M a y 2 0 1 7