Study On The Internal Control System Of Procurement Operations Of A Foundation

Non-profit organization (NPO) plays an important role in the increasingly social and economic development process of China, and also attracts more public attention and support. However, in the course of its rapid development, due to the lack of internal management mechanism, there has been a series of problems. Such as "Guo Meimei Event" occurring in recent years, Henan Soong Ching Ling Foundation lend the donations for profit and Wenzhou Red Cross asset management is in chaos. The frequent occurrence of NPO have made suspicion cover its public welfare and purity as well as the declining of social credibility. Among these problems, the lack of internal control system of procurement has become one of the most important reasons hinder its rapid development. A foundation as a government-sponsored national public foundation, its internal controls of the procurement is also insufficient. In order to play its greater degree of social utility, increase its operational efficiency and improve operating conditions, NPO need to improve its internal control system of procurement as soon as possible and promote disclosure of operational information to solve credibility problems, so as to maintains a good reputation.By means of analyzing a case study of A Foundation,this paper,based on the internal control theory have found many problems including its poor control environment, the lack of a unified management system as well as relevant systems, low internal efficiency, and insufficient of internal oversight. Referring to existing system including Basic norms of internal control, Application Guidelines for Enterprise Internal Control "and" Administrative Internal Control Institutions (Trial), this paper will also sort out A foundation’s purchasing process and grasp the key risk points of A Foundation’s procurement business processes with the aim of building A Foundation purchasing internal control system and the proposal of its practical embodiments.Through the improvement of the internal control systems of procurement of A foundation, its procurement performance will be greatly improved. In addition, it will further safeguard legitimate procurement, promote transparency and public information on funds and enhance social credibility. The internal control systems of procurement and embodiments proposing are generally applicable and it can also be a reference for other non-profit organizations to improve its internal control system of procurement.