Insight
Procurement in Iraq: creating a transparent and auditable purchasing process
The problem with local purchasing is rarely dishonesty. It is that entirely proper purchasing cannot be evidenced afterwards.
When head office raises a concern about Iraqi spend, the concern is almost never that the wrong thing was bought. It is that nobody can reconstruct how the supplier was chosen, what else was quoted, who approved it and whether the goods arrived.
That is a control problem, and it is solvable with four decisions taken before the first purchase.
Decision one: set thresholds in writing
A threshold says what level of purchase requires competition. Below it, a single quotation is acceptable; above it, a minimum of three written quotations. Without a written threshold, every purchase becomes a judgement call, and judgement calls cannot be audited.
Set two thresholds, not one: a competition threshold and an approval threshold. They are different questions — whether the price was tested, and who was entitled to commit the money.
Decision two: separate the buyer from the approver
The person who sources cannot be the person who approves. This is the oldest control in procurement and the first one that disappears when an operation is small and busy. Using an external desk makes the separation structural rather than a matter of goodwill.
Decision three: screen the supplier before the order, not after the problem
- Commercial registration and tax registration verified
- Ownership and beneficial ownership checked where appropriate
- Due diligence checks on the supplier, its owners and its bank
- Conflict-of-interest and related-party screening
- Licence, certification and insurance verification
- Bank details verified by an independent call-back to a number obtained separately from the invoice
That last point prevents the most common fraud in the market: an invoice arriving with amended bank details. A call-back to a number taken from the invoice itself verifies nothing.
Decision four: define what the file contains
A complete procurement file contains the requirement, the specification, the quotations received, the comparison, the recommendation, the approval, the purchase order, the delivery note, the inspection record and the invoice. If any of those is missing, the purchase cannot be fully evidenced.
The photographic inspection record is the most frequently omitted document and the most useful one. It is the only proof that what was specified is what arrived.
Exceptions are normal; hiding them is not
Urgent purchases and single-source purchases happen in every operation. What distinguishes a controlled process is that they are documented as exceptions, approved as exceptions and reported monthly as exceptions.
An operation with no exceptions is not more disciplined; it is usually one where the thresholds are set too high to be triggered.
What good looks like after six months
Monthly spend visible by category, supplier and entity. Price benchmarking against previous purchases. An exception report that is short but not empty. And an audit file per purchase that somebody who was not there can read.
Where this touches legal work. Supply contract terms and any dispute with a supplier sit with Salt & Associates. Salt & Associates can be engaged separately.
Test it on one purchase.
Send a requirement and judge the file that comes back.