Public Procurement and Finance — Undated papers

KNEC Diploma in Supply Chain Management, Module II. Original theory examination questions with explained model answers for revision.

Undated supplied paper

Paper codes: Not shown in supplied scan
Time: Not shown in supplied scan
Instructions: Not shown in supplied scan

Question 1(a) — 10 marks

Explain the ways in which the finance department can facilitate procurement operations in a public entity.

Model answer

  1. Budget alignment: finance confirms that planned purchases are affordable and properly funded.
  2. Timely payment: coordinated invoice checks and payment schedules support reliable supplier relationships.
  3. Accurate costing: shared price, tax and commitment data improve evaluation and expenditure control.
  4. Cash-flow planning: procurement schedules help finance arrange funds when contract payments fall due.
  5. Accountability: matching orders, receipt evidence and invoices reduces errors, duplicate payments and unauthorised expenditure.

Question 1(b) — 10 marks

Outline the role of the Auditor General in public procurement in Kenya.

Model answer

  1. Audit financial records and procurement-related expenditure independently.
  2. Examine whether public resources were applied lawfully and for authorised purposes.
  3. Assess relevant controls and identify unsupported, irregular or wasteful expenditure.
  4. Report audit findings to the appropriate constitutional oversight bodies.
  5. Recommend corrective action and support accountability through evidence for follow-up by responsible authorities.

Question 2(a) — 10 marks

Many contested tender awards in Kenya are referred to the Public Procurement Administration Review Board (PPARB). Outline the reasons that may necessitate the bidders to refer such tender awards to the Board.

Model answer

  1. Undisclosed evaluation criteria were introduced or published criteria were not applied.
  2. The applicant was treated unequally or subjected to discriminatory requirements.
  3. A non-responsive or unqualified bidder was improperly preferred.
  4. Required notices, reasons or procedural safeguards were not provided.
  5. Conflicts of interest, unlawful influence or other breaches of procurement duties affected the applicant or created a risk of loss.

Question 2(b) — 10 marks

The Efficiency Monitoring Unit (EMU) has been called to investigate the activities of a certain state corporation with regard to alleged misuse of funds allocated to it for procurement function. As the head of the investigating team, explain the aspects that the unit will consider in the investigation.

Model answer

  1. Budget and authority: establish what funds and approvals were available and what expenditure was permitted.
  2. Procurement compliance: examine planning, sourcing, evaluation, award and possible conflicts of interest.
  3. Contract performance: verify whether the agreed goods, works or services were actually delivered at the required quality.
  4. Payments and records: trace orders, receipts, invoices and bank transactions for unsupported or duplicate expenditure.
  5. Controls and responsibility: identify weaknesses, responsible decisions and corrective measures supported by the evidence.

Question 3(a) — 10 marks

Explain the role of user departments in the procurement process in a public entity.

Model answer

  1. Identify and justify the operational need.
  2. Prepare or contribute accurate technical specifications and quantities.
  3. Provide required dates and information for procurement planning and budgeting.
  4. Supply technical expertise for evaluation where properly appointed.
  5. Inspect or test delivered requirements and confirm satisfactory performance through the authorised acceptance process.

Question 3(b) — 10 marks

As a procurement officer in a public entity in Kenya, you have received quotations from prospective suppliers. Explain the factors that you should consider when evaluating the quotations.

Model answer

  1. Eligibility and responsiveness: check required documents and compliance with the disclosed instructions.
  2. Technical conformity: assess whether the offered goods or services meet the specification.
  3. Evaluated cost: compare prices using the published basis, including relevant taxes and delivery costs.
  4. Delivery and commercial terms: confirm required completion dates, payment, warranty and support arrangements.
  5. Supplier capability: verify the resources and performance evidence required by the quotation documents.

Question 4(a) — 10 marks

Outline the measures that an officer should take to ensure that procurement records are properly maintained in a public entity.

Model answer

  1. Create complete files for each procurement using consistent references and indexes.
  2. Record transactions and decisions promptly and accurately.
  3. Restrict access and control changes to preserve confidentiality and integrity.
  4. Store records securely and back up electronic information.
  5. Retain, retrieve and dispose of records according to applicable legal and records-management requirements.

Question 4(b) — 10 marks

Explain the factors the may influence a county government in Kenya to adopt the e-procurement system in its operations.

Model answer

  1. Efficiency needs: slow manual work may justify electronic workflows.
  2. Transparency and control: traceable approvals and records can strengthen accountability.
  3. Cost-benefit assessment: expected savings must justify implementation and ongoing expenditure.
  4. Readiness: available skills, infrastructure, supplier access and management support affect feasibility.
  5. Integration and compliance: the system must fit financial controls and the applicable procurement framework.

Question 5(a) — 10 marks

Outline the conditions that a supplier should fulfil in order to participate in public procurement process.

Model answer

  1. Have the legal capacity to enter the proposed contract.
  2. Meet the published professional, technical and financial qualification requirements.
  3. Fulfil applicable tax obligations and provide required evidence.
  4. Not be debarred or otherwise legally disqualified from participation.
  5. Meet applicable solvency, integrity and conflict-of-interest requirements.

Question 5(b) — 10 marks

Explain the factors that an accounting officer should consider when appointing members to the tender evaluation committee in a public entity.

Model answer

  1. Relevant expertise: members need skills appropriate to the technical and commercial requirement.
  2. Independence: disclose and manage conflicts of interest.
  3. Integrity: select people who can protect confidentiality and apply criteria impartially.
  4. Availability: members must have time to complete the work within the required period.
  5. Proper composition: follow statutory appointment, membership and separation-of-duty requirements rather than appointing an arbitrary group.

Question 6(a) — 10 marks

Explain the disadvantages to a public health institution of using the internet when sourcing for its medical supplies.

Model answer

  1. Supplier-verification difficulty: a website may not establish that the seller is legitimate, authorised or capable.
  2. Product-assurance limitations: online descriptions alone cannot verify authenticity, storage history or conformity.
  3. Cyber risks: fraud, phishing and insecure platforms can expose funds or confidential records.
  4. Access and reliability problems: connectivity failures and limited digital skills can disrupt sourcing.
  5. Delivery and compliance uncertainty: remote offers may conceal lead times, total costs or necessary product and import requirements.

Question 6(b) — 10 marks

ABZ County is concerned about increased incidents of unethical behaviour by its procurement staff. Explain the ways in which the county may minimise such incidents.

Model answer

  1. Leadership example: managers should follow procurement rules themselves and refuse improper gifts or preferential treatment.
  2. Practical ethics training: staff should learn how to recognise conflicts, bribery and confidential information risks.
  3. Effective controls: segregation of duties, documented approvals and audit trails make concealed misconduct harder.
  4. Protected reporting: confidential channels and protection against retaliation encourage early reporting of suspected abuse.
  5. Fair enforcement: investigate complaints promptly and apply consistent sanctions and recognition for ethical conduct.

Question 7(a) — 10 marks

The Kenya Revenue Authority (KRA) has failed to meet its tax collection targets in the past few years. Explain the measures that the Authority should take to improve efficiency in tax collection.

Model answer

  1. Improve registration: identify liable taxpayers and maintain accurate records.
  2. Simplify compliance: clear guidance, accessible filing and convenient payment reduce avoidable non-compliance.
  3. Use suitable technology: integrated records and electronic systems improve processing and detection of discrepancies.
  4. Apply risk-based enforcement: focus audits, debt collection and investigation on material non-compliance.
  5. Strengthen integrity and staff capability: training, supervision and reliable controls reduce errors, leakage and collusion.

Question 7(b) — 10 marks

The Public Procurement Regulatory Authority (PPRA) prepares general procurement manuals for use by public entities in Kenya. Explain five ways in which the entities can utilise such manuals.

Model answer

  1. Develop consistent internal procurement procedures using the applicable guidance.
  2. Train and induct procurement staff and committee members.
  3. Use appropriate checklists and standard documentation when planning and processing purchases.
  4. Clarify responsibilities and control points across the procurement cycle.
  5. Review compliance and improve operations using the manual together with the current governing law.
PreviousNext