Contract Management is the management of contracts made with customers, vendors, partners, or employees. The personnel involved in contract administration are required to negotiate, support and manage effective contracts which includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing on any changes or amendments that may arise during its implementation or execution.
CorProfit assists you to have the ideal solution to align Contract Management to ERM since ERM strengthens potential weaknesses in contracts to your advantage.
- A contract register is to be maintained
- Each contract may have common aspects to other controls as well as differences, the risks associated with each contract are to be identified and assessed. Any high risks identified should be reviewed and reported accordingly.
- Contracts should be adequately reviewed prior to signoff. The review should not be just on legal terms and obligations. A business review should also be performed to ensure that the contract is in the best interest of your company and does not undertake any unnecessary risks.
- Approval of contracts are to be governed by the Delegation of Authority
- Certain contracts require renewal (e.g. annual renewal), a contract renew schedule should be included in the contract register. Procedures are in place to ensure sufficient time is allowed for renewal prior to the expiry date of the contract.
- Insurance Cover – For some contracts, insurance covers may be required to mitigate the risks. Ensure that such insurance covers are in place.
- Fraud Risk – Collusion between employees and contractors in granting contracts. Controls are in place to ensure contracts are granted independently and for the best interest of your company.
- Contractor Performance – Ongoing monitoring of the performance of the contractor(s) to raise any red-flags.
- Contract Awarding – the risks of inappropriate contract awarding are identified and assessed to ensure policies and guidelines of selection and awarding contracts are being followed.