Twelve Days to Raise an Order
At a district council, every purchase needs a paper requisition signed by the budget holder, then a finance check, then a procurement check, then a director's signature for anything above £1,000. Last quarter 71% of the 1,840 purchase orders raised were for less than £500. Average time from requisition to order was 12 working days. Staff report that they order first and raise paperwork later to avoid the delay. One team keeps a drawer of receipts. Finance has found 63 invoices last month with no matching order, and three suppliers have put the council's account on stop.
1. Diagnose what is wrong with the current process.
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The process is not proportionate to risk, and the maverick buying is a symptom, not the disease.
- 71% of 1,840 orders (about 1,300) are under £500. Four approval steps and up to 12 days for a £200 purchase is a control that costs more than the risk it manages.
- Duplicate checks: finance and procurement both reviewing the same low-value requisition adds a hand-off without adding a distinct control objective.
- Order-after-the-event behaviour is a rational response to a 12-day cycle - staff are not dishonest, they are working around a bottleneck.
- Downstream failure: 63 unmatched invoices a month is rework at the invoice stage, which is more expensive than the approval step it was meant to prevent.
- Supplier stoppages mean the failure now has an operational and reputational cost.
The process has pushed risk downstream rather than removing it: the council now has no order, no commitment data and damaged supplier relations.
2. Redesign the process. What would you change and what controls would you keep?
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Reshape around value bands, not around steps:
| Value | Route |
|---|---|
| Under £500 | Budget holder approval and an electronic order from a catalogue; no finance or procurement pre-check |
| £500–£5,000 | Budget holder plus finance confirmation of budget availability, electronic |
| Above £5,000 | Procurement involvement and a competitive process |
| Above the director's delegated limit | Director approval, electronic |
Remove: the duplicated finance/procurement pre-check on low-value items; paper as the default channel.
Keep or strengthen: segregation of duties (the person who raises an order does not approve it); delegated authority limits; three-way match of order, receipt and invoice; a no-order-no-pay rule that is enforced only once the fast route exists.
Key sequencing point: introduce the fast route before enforcing the rule. Enforcing first will fail and destroy credibility.
3. What new risks does your redesign create, and how would you mitigate them?
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- Order splitting to stay under the £500 threshold. Mitigate with spend analytics that flag repeat purchases from the same supplier within a period, plus review of supplier-level totals rather than single-order values.
- Loss of control / fraud at low value. Mitigate with segregation of duties, a supplier master file that only procurement can amend, and a random audit sample of low-value orders each month.
- Loss of visibility. Mitigate because the electronic route now captures data the paper route lost - the 63 unmatched invoices should fall sharply; track that as the proof.
- Budget holders approving beyond their budget. Mitigate with a real-time budget check in the system rather than a manual finance sign-off.
Agree the audit sample size and the escalation route with finance before go-live, so the new design has an agreed control framework rather than an improvised one.