Non/ Incorrect capturing of Bank Details of Vendor Master Sample Clauses

Non/ Incorrect capturing of Bank Details of Vendor Master. The vendor master database contains information about the vendors that supply an enterprise. This information includes vendor name, vendor account number (vendor ID), bank account number etc. A review of the data of bank details of vendor master revealed that out of 1,57,804 records, the account holder’s name was not captured in 2,206 records and the bank account number was not captured in 1,176 records. In two cases, it was noticed that the unique vendor ID was linked to more than one person and with different bank account numbers. For enabling digital payment, bank key is used for identifying the individual branches for electronic banking in India, which is either MICR code (9 digits) or IFSC code (11 digits). Audit observed that in seven records under country code IN, the bank keys are neither in MICR code format nor in IFSC code format. In 457 records, the vendor name and address were same though the vendors’ IDs were different, indicating presence of duplicate vendors. The risk of fraud/ incorrect payments is accentuated by the presence of duplicate vendors/ fictitious records in the vendor master. Thus, the assurance provided during the previous audit on cleaning of duplicate vendors has not been acted upon. Management replied (April 2019) that the bank details of the vendors having invalid bank key (IFSC) or blank bank account number have been reviewed and removed from vendor masters and vendors having blank account holder name have been blocked. Bank Account numbers of two vendors were rectified on the basis of HR master, being employee vendors. Further, a proper centralised process for creation of vendors has been put in place. It has the required validations for preventing duplicate vendors, different vendors with same address, same bank detail with valid IFSC etc. Audit recommended Management to take a comprehensive review and address incorrect/ incomplete entries in master records by placing appropriate controls. Ministry accepted (August 2019) that in 457 records, vendor name and address were same though vendor IDs were different indicating presence of duplicate vendors. Work centres were advised to review the records and block the vendor codes which are duplicate. Ministry further stated that corrective action has been taken after a comprehensive review of the vendor masters and appropriate and adequate controls for vendor masters have been ensured through Vendor Management System. The corrective action taken at the instance of current Audit ...