Overcoming Audit Challenges by Mastering Compliance in Contract Management
Are compliance issues becoming a constant source of stress in your organization? Compliance procedures provide guidance amidst complex regulations and laws for seamless operations. Ensuring consistent adherence to these regulations is critical in maintaining the operational integrity of any public sector organization. This is where the essence of a compliance audit comes into play.
What is a Compliance Audit and Why It Matters?
As defined by NIGP, a compliance audit is "an audit conducted to determine the degree of adherence to established laws, regulations, policies, and procedures relative to accounting, financial, and business processes." This emphasizes the vital role of consistent audits in managing and maintaining compliance in procurement operations.
However, compliance audits often unravel common issues such as requirements occasionally being split to avoid competitive bidding, vendor non-performance not being adequately tracked, and problems persisting even after corrective actions were implemented. These findings underscore the need for stringent internal controls, effective compliance management strategies for your procurements, and the data attached to each contract.
Following Best Practices Is Your Key to Streamlined Compliance
Navigating the challenges of compliance in public sector procurement demands a strong framework of best practices. Below are some practices, as shared in a presentation at the NCMA 2023 conference, that serve as guiding principles for ensuring consistent adherence to compliance requirements.
Develop a Comprehensive Compliance Checklist or Matrix
As recommended in the presentation, the first step toward effective compliance management is creating a detailed compliance checklist or matrix. This checklist encompasses all compliance requirements and serves as a systematic documentation of adherence. It also acts as a powerful tool during audits, reducing the risk of oversights and potential non-compliance.
Tailor Training for Unique Contracts and Policies
Every organization possesses unique contracts and company policies requiring specific understanding and adherence. Recognizing the distinct roles between the buyer and seller and adapting training accordingly can ensure efficiency and seamless compliance.
Promptly Implement Corrective Actions
The presentation emphasized the need for immediate action post audits. Timely implementation of corrective actions after audits ensures that the same issues do not persist. This promotes continual improvement in compliance standards.
Collaborate with Like Organizations/Companies
Collaborating and sharing best practices with similar organizations provides valuable insights. It allows you to understand their compliance approach, learn from their experiences, and adapt successful strategies to your own organization. Associations like NIGP, NPI, and NCMA allow you to network and talk with your peers about the tools they utilize to help. These associations usually have yearly events that will give you a chance to meet with suppliers within the industry to learn about the solutions to your tracking problems.
Seek Clarification from Government Agencies
Organizations are encouraged to seek clarification from government awarding agencies or the Office of Management and Budget (OMB) for any complex regulations or policies. This can provide essential guidance and ensure the correct interpretation and application of these regulations.
Gaining Compliance Confidence with a Contract Lifecycle Management Solution
Implementing these best practices can significantly improve your organization's compliance management. However, to truly fortify your compliance confidence and overcome audit challenges, consider pairing these practices with a comprehensive Contract Lifecycle Management (CLM) solution, ensuring your procurement operations stay on the right side of the policies.
Bidnet Direct’s CLM functionality supports the development of configurable workflows and approvals and enables systematic tracking of all contracts and related supplier, addendum, COI and other related documents. Clean data management is integral to your operation and ensuring you are complying with policies and best practices; the solution supports accurate and comprehensive reporting, thereby reducing the risk of non-compliance.
The San Diego Association of Governments is one of the many public sectors that benefited from streamlined contract management using CLM. Since they utilize a CLM solution, they have cleaner data to pull for auditors, a streamlined approval process, and increased compliance. This ultimately led them to get recognition from the FTA Triennial Review for a structured audit.
Learn more about SANDAG’s CLM experience.
Compliance doesn't have to be a hurdle in your public procurement process. Embrace the simplicity and reliability of a modernized CLM solution. Step into the future of efficient and compliant contract management with Bidnet Direct's CLM solution today and steer your organization towards a future of compliance confidence.
Find out how BidNet Direct can help your government organization improve compliance! 
