In 2013 Kida Company purchased more than $ 10 million worth of office equipment under its “special” ordering system, with individual orders ranging from $ 5,000 to $ 30,000. “Special” orders entail low- volume items that have been included in an authorized user’s budget. Department heads include in their annual budget requests for the types of equipment and their estimated cost. The budget, which limits the types and dollar amounts of office equipment a department head can requisition, is approved at the beginning of the year by the board of directors. Department heads prepare purchase requisition forms for equipment and forward them to the purchasing department. Kida’s “special” ordering system functions as follows:
• Purchasing: Upon receiving a purchase requisition, one of five buyers verifies that the person requesting the equipment is a department head. The buyer selects the appropriate vendor by searching the various vendor catalogs on file. The buyer then phones the vendor, requests a price quotation, and gives the vendor a verbal order. A prenumbered purchase order is processed with the original sent to the vendor, a copy to the department head, a copy to receiving, a copy to accounts payable, and a copy filed in the open requisition file. When the buyer is orally informed by the receiving department that the item has been received, the buyer transfers the purchase order from the unfilled file to the filled file. Once a month the buyer reviews the unfilled file to follow up on and expedite open orders.
• Receiving: The receiving department receives a copy of the purchase order. When equipment is received, the receiving clerk stamps the purchase order with the date received and, if applicable, in red pen prints any differences between the quantity shown on the purchase order and the quantity received. The receiving clerk forwards the stamped purchase order and equipment to the requisitioning department head and orally notifies the purchasing department.
• Accounts payable: Upon receiving a purchase order, the accounts payable clerk files it in the open purchase order file. When a vendor invoice is received, the invoice is matched with the applicable purchase order, and a payable is set up by debiting the equipment account of the department requesting the items. Unpaid invoices are filed by due date, and at the due date a check is prepared. The invoice and purchase order are filed by purchase order number in a paid invoice file, and the check is then forwarded to the treasurer for signature.
• Treasurer: Checks received daily from the accounts payable department are sorted into two groups: those over $ 10,000 and those $ 10,000 and less. Checks for $ 10,000 and less are machine- signed. The cashier keeps the key and signature plate to the check- signing machine and records all use of the check- signing machine. All checks over $ 10,000 are signed by the treasurer or the controller.

Required:
a. Prepare a flowchart of Kida Company’s purchasing and cash disbursements system.
b. Describe the internal control weaknesses relating to purchases of and payments for “special” orders of Kida Company for the purchasing, receiving, accounts payable, and treasurer functions.