Materials Management Audit Program

By

Entellus Technology Group, Inc.

EntellusFL@aol.com

407-774-8397

I.                  Preliminary Steps

a).       Organizational Structure of the company as implemented in SAP                

b).          Corporate-wide Materials Management (MM) requirements

c).        Configuration documentation and system outputs which identify all selected constants, processing options and application controls

d).        SAP Materials Management (MM) manual(s), specifically for the following modules:

        -  Material Requirements Planning

        -  Purchasing and Procurement

        -  Inventory Management

            e). Materials Master

The material master contains descriptions of materials that an enterprise procures, produces, and stores.

Ensure that access to the data is restricted to the adequate activity (create, change, display) and by the appropriate functional areas: 

      •           Accounting

              •         Production Scheduling

      •           MRP

      •           Purchasing

      •           Storage

      •           Quality Management

f). Materials Requirement Planning

The main function of material requirements planning is to guarantee material availability and in the process, achieve a balance between optimizing the service level and minimizing costs and capital lockup.

Ensure that only authorized personnel has access to the MRP views of the Material Master.

Review the adequacy of the MRP groups. 

Ensure that groups have been set up at least for the following categories:

•   Raw materials

•   Finished goods

Review the adequacy of parameters set up at the MRP Group level.

Ensure that only authorized personnel can initiate MRP runs for their areas of responsibility only.

If possible, perform an MRP run for each of the MRP Types identified and review the results for accuracy.

g). Procurement

Ensure that the structure reflects the organizational levels of the company, specifically:

Master Data

Vendor Master

Ensure that only authorized personnel can display, create, update and delete the vendor master file.  Review the profiles and authorizations in the basis module.

Identify conditions defined in the system, both pre-defined and user defined.  Ensure that these conditions are adequate.

Ensure that limits have been defined.  Limits specify the extent to which manual changes to the price, discount or surcharge are permitted.

Purchasing Documents

Ensure that only authorized personnel can create and/or update all purchasing documents.  Review security profiles and authorizations for control of purchase document functionality and ensure that release strategies are properly assigned based on approval levels.

Ensure that value and quantity tolerance limits have been defined for acceptable over deliveries and under deliveries.

Ensure that only authorized personnel can create and/or update contracts and agreements.  Review security profiles and authorizations for control of contracts.

Ensure that only authorized personnel can create, update and/or delete source lists. 

h). Inventory Management

Review the adequacy of Goods Receipts procedures (by source, by location, by material)

Ensure that only authorized personnel have adequate access (create, update, delete) to the Goods Receipts modules.

Ensure that only authorized personnel have adequate access (create, update, delete) to Goods Issued modules.

Ensure that only authorized personnel have adequate access (create, update, delete) to reservations.

Ensure that only authorized personnel have adequate access (create, update, delete) to transfer postings and stock transfers.

i). Invoice Verification

Ensure that only authorized personnel have adequate access (create, update, delete) to the invoice verification functions:

Ensure amounts are posted accurately

j).    Obtain the following items:

·         Obtain a copy of all security policies and procedures.                      

·         Obtain a diagram of the SAP application architecture.                     

·         Obtain a copy of “problem tracking” or “incident report” for the Materials Management  

·         Obtain a copy of all system enhancements that are queued up for implementation.             

·         Obtain a copy of the application’s documentation.                           

·         Obtain a copy of the development methodology used to complete the system.(Business and Design Requirements Processes)                   

·         Obtain a copy of any service level agreements established for the application.                                

·         Obtain a copy of the contingency/backup plan for the application   

·         Determine which release of SAP is installed

·         Determine the interfaces to the Materials Management Module

·         Determine what level of custom programming in on-going

·         ABAP/4 programs

·         Data entry screens

·         Obtain a listing of all SAP clients

·         Table T000 has the SAP clients

·         SE16 or SE17

·         Table T001 has the companies

·         Obtain a listing of all group companies

·         List table T042G

·         Obtain a listing of all business areas

·         List table TGSB and TGSBT

·         Obtain a listing of all credit control areas

·         List table T014 and T014T

·         Obtain a list of all charts of accounts

·         List table T004 and T004T

·         Obtain a listing of all plants

·         List tables T001W and TVKWZ

·         Obtain a listing of storage locations

·         List table T001L

·         Obtain a listing of all purchasing organizations

·         List table T024W

·         Obtain a listing of all purchasing groups

·         List table T024

·         Obtain a listing of all sales organizations

·         List table TVKO and TVKOT

·         Obtain a listing of distribution channels

·         List table TVTW, TVTWT, and TVKOV

·         Obtain a listing of all divisions

·         List tables TSPA, TSPAT, and TVKOS

·         Obtain a listing of sales areas

·         List table TVTA

·         Obtain a listing of sales offices

·         List tables TVBUR, TVKBT, and TVKBZ

·         Obtain a listing of sales groups

·         List tables TVKGR, TVBVK, and TVGRT

II.               General SAP Controls

a).        Determine that proper segregation of duties is in place for profile, authorization-object generation and creation of user master records

b).        Determine that proper segregation of duties is in place for program development

c).        Determine that proper segregation of duties is in place for System Administration

d).        Determine that proper segregation of duties is in place for table maintenance

e).        Obtain a copy of the system control parameters to ensure that proper access control parameters are established.  These are in Table RS38M.  Path: SYSTEM - SERVICES - REPORTING - Enter RSPARAM - Scroll down to each parameter.

login/password_expiration_time

·         Changing of password after a certain number of days (default = 0)

login/min_password_ing

·         Sets the minimum password length (default = 3)

login/fails_to_session_end

·         Number of attempts before SAP stops the session (default = 3)

login/fails_to_user_lock

·         Number of attempts before SAP locks the User Master record (default = 12)

rdisp/gui_auto_logout

·         Inactivity parameter (default = 0, parameter not active)

f).        Determine if additional password checks for specific passwords have been implemented

Path: SYSTEM - SERVICES - TABLE MAINTENANCE - USR40 – DISPLAY

g).        Ensure that all default passwords have been changed for all clients (000, 001, and 066) and of course the production client.

SAP*                     - (default password = 06071992)

DDIC                    - (default password = 19920706)

SAPCPIC             - (default password = admin)

EarlyWatch           - (default password = support)

Sys              (DBMS)        - (default password = Change_On_Install )

System (DBMS)   - (default password = Manager )

SAPr3  (DBMS)   - (default password = SAPr3 )

h).        Obtain a listing of the following:

SAP users                                - Table USR01

SAP activity codes                 - Table TACT

SAP profiles (both SAP supplied and user defined) - USR04

SAP authorization-objects      - Table TOBJ

SAP transactions                     - Table TSTC

·         Path: SYSTEM - SERVICES - TABLE MAINTENANCE - Enter TSTC - Select - DISPLAY

·         Also Transaction SE16 or SE17

Custom Transaction (User defined start with a ‘X’, ‘Y’, or ‘Z’

g).        Integrity Checking

·         Evaluate sensitive or critical on-line transactions to ensure that they perform according to the established integrity standards.                           

·         Evaluate sensitive or critical batch jobs to ensure that they perform according to the established integrity standards.

                                   

h).        Evaluate any sensitive or critical derived data to ensure that it is created according to the established integrity standards.

·         Review the final edit process to ensure the integrity of the process

·         Review all system interfaces to determine that data integrity is properly maintained.

                                   

i).         Evaluate the outputs of the system to ensure that sensitive or critical output is properly handled.

                                   

j).         Evaluate any recent application failures to ensure that an adequate contingency plan exists.

           

k).        Evaluate several recent application changes to ensure that proper procedures were followed.

                                   

l).         Evaluate the level of system documentation to ensure that it is adequate.                           

m).       Interview the user to ensure that they are satisfied with the current system and that it meets the organization’s business needs.

                                   

n).        Review the management reports to see if additional reports are needed:                             

III.           Key Transactions

a).        Create internal purchase requisition (via MRP or manually)

·         Logistics > Materials Management > Purchasing > Requisition > Create

·         Transaction Codes

·         ME51

·         ME52

·         ME54

·         MMD1 – Create MRP Profile

·         MD02  - Online MRP single item

b).        Determine possible vendors (from vendor source list, quota arrangement contracts, and purchase info records)

·         Transaction Codes

·         ME01 - Maintain

·         ME11 – Create Purchase Information Record

·         ME12 – Change Purchase Information Record

c).        Select Vendor

·         Logistics > Materials Management > Purchasing > Master Data > Vendor > Purchasing > Create

·         Transaction Code

·         MK01

d).        Create purchase order (from purchase requisition or new purchase order)

·         Logistics > Materials Management > Purchasing > Purchase Order > Create > Vendor Known (Vendor Unknown or Assigned Requisition Exists)

·         Transaction Codes

·         ME21

·         ME23

·         ME25

·         ME51

·         ME90

e).        Check/monitor purchase order (for future deliveries or past history)

·         Transaction Codes

·         ME2A – Monitor Confirmations

·         ME92

·         ME20 – Stock Monitoring (Vendor)

f).        Receive goods to inventory or receive goods to overhead

·         Logistics > Materials Management > Inventory Management > Goods Movement > Goods Receipt > For Purchase Order > PO Number Known

·         Transaction Code

·         MB01

·         MB1C

·         MB0A

·         MB02

·         MB31

g).        Verify invoice (3 way-against invoice) (2 way-against goods receipt)

·         Logistics > Materials Management > Invoice Verification > Invoice Verification > Further Processing > Release Invoice

·         Transaction Codes

·         MR02

·         MRHR

h).        Pay Invoice

·         Logistics > Materials Management > Purchasing > Master Data > Vendor > Central > Create

·         Transaction Code

·         XK01

·         FK01

·         Logistics > Materials Management > Invoice Verification > Invoice Verification > Document Entry > Enter Invoice

·         Transaction Codes

·         MRHR

·         F-43

·         Accounting > Financial Accounting > Accounts Payable > Periodic Processing > Payments

·         Transaction Codes

·         F110

·         MRHR

·         Enter Invoice

·         MR1M

i).         Create Materials Master

·         Logistics > Materials Management > Material Master > Material > Create

·         Transaction Code

·         MM01

·         MMZ1

·         MM02 – Change Material Master

·         Create Material via ALE

·         MAL1 - Create

·         MAL2 – Change

·         Inventory Management

·         MB00

·         Delete Material Document

·         MBAD

·         Return Delivery Per Material Document

·         MBRL

j).         Create Vendor

·         Transaction Codes

·         FK01 – Create Vendor

·         FK02 – Change Vendor

·         Transaction Codes – Purchasing

·         MK01 – Create

·         XK01  - Create Centrally

·         MK02 – Change

·         XK02  - Change Centrally

·         MK04 – Change

·         MK05 – Block Vendor

k).        Controlling Cost

·         Accounting > Controlling > Project Cost Accounting > Order-Related Production > Planning > CO Production Order > Create/Change Plan

·         Transaction Codes

·         KKF4

·         KKE2

·         VA02

·         Cost Element

·         Create Primary

·         KA01

·         Create Secondary

·         KA06

·         Change

·         KA02

·         Cost Center

·         Create

·         KS01

·         Change

·         KS02

l).         Goods Issued for Production Orders

·         Logistics > Materials Management > Inventory Management > Goods Movement > Goods Issue

·         Transaction Codes

·         MB1A

·         MB01

·         VL01

m).       Goods Receipt Processing from Production

·         Logistics > Materials Management > Inventory Management > Goods Movement > Goods Receipt > For Order

·         Transactions

·         MB01

·         MB1C

·         MB31

n).        Overhead Calculation

·         Tools > Business Engineering > Customizing > Controlling > Product Cost Controlling > Product Cost Planning > Basic Settings For Product Costing > Overhead

·         Accounting > Controlling > Product Cost Accounting > Order-Related Production > Period-End Closing > Overhead > Individual Processing

·         Transaction Codes

·         KZS2

·         KZE2

·         KGP2

·         KGI2

o).        Determine Work in Process (WIP)

·         Accounting > Controlling > Product Cost Accounting > Order-Related Production > Period-End Closing > Work In Process > Individual Processing > Calculate

·         Transaction Code

·         KKAX

p).        Variance Calculation

·         Accounting > Controlling > Product Cost Accounting > Order-Related Production > Period-End Closing > Variance > Individual Processing

·         Transaction Code

·         KKS2

q).        Settlement of Production Order

·         Logistics > Production > Production Control > Period-End Closing > Settlement

·         Transaction Code

·         KO88

r).         Transfer of Production Variances

·         Accounting > Controlling > Product Cost Accounting > Order-Related production > Period-End Closing > Settlement > Individual Processing

·         Transaction Code

·         KO88

s).        Cost Center Analysis

·         Accounting > Controlling > Cost Centers > Information System > Choose Report

·         Transaction Code

·         SART

t).         Analysis of Profitability

·         Accounting > Controlling > Profitability Analysis > Information System > Choose Report

·         Transaction Code

·         KE30

u).        Close Periods

·         Transaction Code

·         MMPV

·         Allow Posting to Previous Periods

·         MMRV

v).        Maintain GR-IR Clearing Account

·         Transaction Code

·         MR11

w).       Enter Invoice Credit Memo

·         Transaction Codes

·         MR1G

·         MRHG

·         F-41

x).        Create

·         Raw Material

·         MMR1

·         Semi-Finished

·         MMB1

·         Finished

·         MMF1

·         Operating Supplies

·         MMI1

·         Trading Goods

·         MMH1

·         Packaging

·         MMV1

·         Configurable Material

·         MMK1

·         Services

·         MMS1

y).        Bill-of-Material

·         Create

·         CS01

·         Change

·         CS02

z).        Routing

·         Create

·         CR01

·         Change

·         CR02

aa).      Stock Requirements List

·         By Material

·         MMBE

·         MD04

·         MD05 – MRP List for a Single Material

bb).      Planning Table

·         Change

·         MC88

cc).      Rough-Cut Capacity Profile for Material

·         Create

·         MC35

dd).     Total Forecast for a Group of Materials

·         Execute

·         MP38

ee).      A Background Master Production Scheduling (MPS) Total Planning Run

·         Execute

·         MDBS

ff).       Planned Orders

·         Change/Display

·         MD12

·         MD13

·         MD16

·         Create/Change

·         MD04

·         Collective Order Release

·         CO05

gg).      Capacity Evaluations

·         Execute

·         CM00

hh).      Purchase Information Record

·         Create

·         ME11

ii).        Quota Arrangement

·         Maintain

·         MEQ1

jj).        RFQ/Quotation

·         Create

·         ME41

·         Maintain

·         ME47

kk).      Scheduling Agreement

·         Create

·         ME31

ll).        Scheduling Agreement – Delivery Schedule

·         Create

·         ME38

mm).    Physical Inventory Counts

·         Enter

·         MI04

·         MI07   - Differences

nn).      Other Transactions

·         XK03        Display Vendor

·         XD03        Display Customer

·         WR03        Display Plant

·         V_R2        Display List of Backorders

·         VOKR      Configuration of Credit Release

·         VOF2        Configuration of Invoice

·         VOF1        Configuration Collection Billing

·         VOF0        Configuration Billing Information

IV.           Key Profiles

a). Determine the MM profiles developed in-house and

review

b). Determine if any of the following profiles are in use

and the assigned user needs this level of access.

·         M_ALL       MM Materials Management: Universal  

Authorization

            

·         M_ANFR_ALL       MM Purchasing - RFQs: Maintenance

Authorization

             

·         M_ANFR_ANZ       MM Purchasing - RFQs: Display

Authorization

               

·         M_ANGE_ALL       MM Purchasing: quotations: maintenance

authorization

·         M_ANGE_ANZ       MM Purchasing: quotations: display

authorization

            

·         M_ANZ            MM Materials management - Display

everything 

              

·         M_BANF_ALL       MM Purchasing - requisitions:

Maintenance authorization

·         M_BANF_ANZ       MM Purchasing - requisitions: Display

authorization

·         M_BEFU_ALL       MM Inventory Management: Maintenance

authorization

·         M_BEFU_ANZ       MM Inventory Management: Display

authorization

              

·         M_BEST_ALL       MM Purchasing - purchase orders:

Maintenance authorization

·         M_BEST_ANZ       MM Purchasing - purchase orders:

Display authorization

·         M_BILA_ALL       MM Balance sheet valuation: Maintenance

authorization

·         M_BILA_ANZ       MM Balance sheet valuation: Display

authorization

            

·         M_EBEL_ANZ       MM Purchasing - Display order documents

                     

·         M_EINF_ALL       MM Purchasing: info records:

Maintenance authorization

·         M_EINF_ANZ       MM Purchasing: info records: display

authorization

·         M_EINK_ALL       MM Purchasing - complete: Maintenance

authorizations

·         M_EINK_ANZ       MM Purchasing - complete: Display

authorizations

            

·         M_ESTA_ALL       MM Purchasing - Edit vendor and

Material master 

           

·         M_ESTA_ANZ       MM Purchasing - Display vendor and

material master

·         M_LIS_ALL        MM Logistics Information System - All

Functions 

          

·         M_LPET_ALL       MM Purchasing: delivery schedules:

maintenance authorization

·         M_LPET_ANZ       MM Purchasing: delivery schedules:

display authorization

·         M_MATE_ALL       MM Material master: Maintenance

authorizations

              

·         M_MATE_ANZ       MM Material master: Display

authorizations

                  

·         M_MATE_AV        MM Material master: Maintenance profile

- Work scheduling

·         M_MATE_DISP      MM Material master: Creation profile –

MRP        

          

·         M_MATE_KON       MM Material master: Maintenance profile

- Engineering/design

·         M_MIPA_ALL       Backorder processing

                                        

·         M_MRES_ALL       Creation profile for reservations

                           

·         M_MTDI_PLA       MM MRP – Execute

                                            

·         M_MTDI_REP       MM MRP – display

                                            

·         M_OIW_ALL        Open Information Warehouse – Metadata

                       

·         M_ORDR_ALL       MM Purchasing: source list: maintenance

authorizations

·         M_ORDR_ANZ       MM Purchasing: source list: display

authorizations

·         M_ORG_ALL  

                                                            

·         M_PLAF_ALL       MM MRP - planned orders - maintenance

authorization

      

·         M_PLAF_BEA       MM Processing planned orders

                                

·         M_PLAF_UMS       MM Converting planned orders

                                

·         M_QUOT_ALL       MM Purchasing, quota arrangement:

Maintenance authorizations

·         M_QUOT_ANZ       MM Purchasing, quota arrangement:

Display authorizations

·         M_RAHM_ALL       MM Purchasing: outline agreements:

maintenance authorization

·         M_RAHM_ANZ       MM Purchasing: outline agreements:

display authorization

·         M_REPR_ALL       MM Invoice Verification: Maintenance

authorizations

·         M_REPR_ANZ       MM Invoice Verification: Display

authorizations             

           

V.               Key Objects/Authorizations

a).        See Supplemental Lists of Transactions with Associated Objects

VI.           Key Tables

a).        Material                                                           (A004)

b).        Customer/Material                                          (A008)

c).        Material Information Record - Plant              (A017)

d).        Material Information Record                          (A018)

e).        Material Purchase Group                                (A029)

f).        Material Per Plant                                           (A071)

g).        Taxes Per Material                                          (A080)

h).        Material Master – Batch Transaction              (BMM00)

i).         Material Master Valuation View                    (BWTAR)

j).         Price Change Table for Material                     (CKI_PAE_ML)

k).        BOM Explosion – Materials                           (CSCMAT)

l).         Posting Account for Materials                        (E1ACA2)

m).       Master/Material                                               (E1M1SLM)

n).        Master/Material – BOM                                  (E1MASTM)

o).        Shipping Material                                            (E1TPSHU)

p).        Index Sales Order – BOM                              (KAST)

q).        Vendor/Material                                              (KOTE005)

r).         Material Master View  – Sales                        (MAAPV)

s).        Material Master View  - Print GR/IR             (MABDR)

t).         Material Master View  - Costing                    (MACK1)

u).        Material Master View  - Valuation                 (MACK2)

v).        Hazardous Material                                         (MGEF)

w).       Terms of Payment                                           (V_TO52)

x).        Release Strategy                                             (V_161I, V_T16FS,     

                                                                                     V_T16SC, V_161F,               

                                                                                     V_161G)

y).        Tolerance Limits                                             (V_169G)

VII.        Key Reports

a).        Display Vendor Line Items                            (FBL1)

b).        Vendors FI-MM Master Data Comparison    (F.48)

c).        Vendors – Report Selection                            (F.98)

d).        List of Vendor (Purchasing)                           (MKVZ)

e).        Goods Movement                                           (MB11)

f).        Goods Withdrawal                                         (MB1A)

g).        Transfer Posting                                              (MB1B)

h).        List of Warehouse Stocks on Hand                (MB52)

i).         Display Plant Stock                                        (MB53)

j).         List of Warehouse Stock Balances                 (MB5L)

k).        Display List of GR/IR Balances                     (MB5S)

l).         List of Stock Values                                       (MB5W)

m).       Purchasing – Vendor Freqs. Selection            (MC$:)

n).        Material Log                                                   (MM60)

o).        Display Parked Invoices                                 (MR43)
p).        Valuation                                                        (MRBE)

q).        Display Materials Document                          (MB03)

r).         Display Planning                                             (MC33)

s).        Display Vendor Analysis                                (MCED)

t).         Display Material                                              (MM03)

u).        Display Material Change Document               (MM04)

v).        Display MRP Profile                                       (MMD3)

w).       Display Material                                              (CS03)

x).        Display BOM Level by Level                         (CS11)

y).        Display Billing Document                              (VF03)

z).        Display Invoice List                                        (VF23)