goods_and_service_procurement_practice_guide.doc

65 ver december 2017 appendix a probity auditors role

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65 Ver. December 2017 Appendix
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A probity auditor’s role is more generally an ‘after the event’ role, auditing the process after completion or at key stages during the process. The process and associated documentation are audited and any probity issues are identified. These may then be addressed in a probity audit report. A probity auditor must be completely independent, and therefore cannot be the legal adviser or other person already involved in the project. The role of Finance in procurement activities Finance is required to be involved in most public authorities’ procurement activity when the procurement is valued at $250,000 or above. In this way, Finance is an independent third party involved in the process and is able to provide you with guidance on matters of probity and accountability. There is a great deal of overlap between the role performed by probity service providers and Department of Finance Government Procurement staff. 66 Ver. December 2017 Appendix
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Appendix – Foreign Exchange Risk Management When public authorities purchase products and/or services directly from overseas, or purchase high value products and/or services domestically with a large imported content, the potential impact of foreign exchange risk should be considered. The following guide provides an overview of how to identify foreign exchange risk within the procurement and when to consider a change to standard Request template pricing. Should foreign exchange risk be assessed as significant or high during the procurement planning phase, it may be necessary to ask for greater pricing detail in the Request. It is important that should foreign exchange risk be deemed significant or high, or you are uncertain of the approach to take, that you contact Western Australian Treasury Corporation (WATC) at www.watc.wa.gov.au or on (08) 9235 9100 to assist with your procurement planning. What is foreign exchange risk? Foreign exchange risk is the risk of a transaction’s value changing due to movements in exchange rates. In the case of a public authority procuring products and/or services, exposure to foreign exchange risk means that the Australian dollar (AUD) cost of your purchase is at risk of changing due to the impact of changes in an underlying exchange rate. Why does purchasing products and/or services from overseas create foreign exchange risk? When purchasing from overseas, a public authority is, in fact, purchasing two things – the product and/or service itself and the foreign currency necessary to pay for the products and/or service. Whilst the purchase of the product and/or service is visible, quite often the purchase of the foreign currency is not. Remember that when a product and/or service originates from overseas, its cost-base will be denominated in another currency. If payment is made in AUD, at some point, this payment will need to be translated back into the original cost-base currency.
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