Abstract:
Internal control plays an important role in an organization. To show whether a organization is minimized from fraud or not is shown from the strength of continuous internal control conducted. Management has a responsibility to design, update, and change the policies in the organization in order to meet an effective internal control which is in line with the organization’s objectives. The purpose of this thesis is to review the internal control applied in Center for International Forestry Research Headquarter (CIFOR-HQ), specifically in the procurement procedure.
In conducting the research, author conducts several types of research method to collect the data such as inquiries of client, observation, documentation, and physical examination. Moreover, author also used Internal Control Questionnaires (ICQ) based on COSO as the foundation of the research.
Based on the thesis result, the implementation of internal control of procurement procedure in CIFOR-HQ is already adequate. Author would like to emphasize on some items found inappropriate, such as the employees are found being dependent on the procedure of Non Standard Method, Procurement Unit doesn’t have an updated list of goods purchased, no segregation of duties between the person who makes the purchase order and receives the goods, and Procurement Unit in making purchasing does not check the stock in the warehouse. CIFOR-HQ should pay attention and take action on these items which could decrease the internal control of the organization.
The author would like to purpose some recommendation to overcome the lack of internal control, which are to update SOP of Procurement, make a system to list and update goods, inventories, and assets bought by the organization, hire an employee to be positioned as the Warehouse Custodian, and update inventories in the warehouse to avoid spoilage and obsolescence.
