How to Stop Purchase Splitting: Approval Limits That Hold Up

Quick answer: Purchase splitting is breaking one need into two or more smaller requests so each stays under an approval limit. Stop it in three layers: a written rule that the limit applies to the whole need and to total spend per supplier in a period, an approval route that sends that total to the right person, and a monthly review of the records for patterns. Treat it as a signal that the process is too slow or unclear before treating it as misconduct.

The problem: the limit works on paper, not in practice

A business introduces an approval limit. Department heads may approve up to ₦250,000; anything above goes to the finance manager. Within weeks, finance notices something odd: the same supplier appears two or three times in a week, each request just under ₦250,000.

That is purchase splitting. The Office of Inspector General of Palm Beach County, a US local-government watchdog, defines a split purchase as "the intentional division of a purchase (splitting) into smaller purchases in order to stay within purchase limits and evade procurement requirements". The limit people avoid is not always an approver: it can be the point where three quotes are needed, where a purchase order is required, or a card's monthly limit.

The cost is not only the missing signature. The larger purchase never gets the scrutiny it needed, nobody compared prices for the full quantity, and the business may pay more than it would for one larger order. When an auditor later adds up the payments to that supplier, the business has to explain why the approval record does not match what it actually bought.

Why people split purchases

Splitting is often not fraud. It commonly starts with one of these:

• The higher approver is slow or hard to reach. A request under the limit is approved today; one above it waits a week. Staff learn the shortcut. (If this is your main cause, fix the delay first: see why purchase approvals take days.)
• Nobody explained what counts as one purchase. The policy says "₦250,000 per requisition", so two requisitions look compliant to the person raising them.
• The need really does arrive in parts. Items are needed in stages, or the budget is released monthly.
• The limit is out of date. Prices have risen and the limit now catches routine purchases it was never meant for.

The Palm Beach guidance also warns that splitting can hide fraud, such as payments to fictitious or unauthorised suppliers, and can lead to waste through unnecessary orders. That is why it still needs a firm rule and a regular check. Start with the rule and the route; most splitting stops once the honest reasons are gone.

What the public sector rules say

Nigeria's federal procurement law treats splitting seriously. The Public Procurement Act 2007 makes the accounting officer of a public body responsible for "ensuring that no reduction of values or splitting of procurements is carried out such as to evade the use of the appropriate procurement method" (section 20(2)(e)). Section 58(4)(d) lists "splitting of tenders to enable the evasion of monetary thresholds set" among the offences under the Act. The Act also tells public bodies to plan by "aggregating its requirements whenever possible" to obtain economy of scale (section 18(d)). The federal Financial Regulations add that a public officer involved in "splitting of contracts to circumvent tenders procedures" must answer a formal query within 21 days, and any loss may be recovered from that officer (regulation 3116).

These rules apply to federal public bodies and public officers, not to private businesses. We use them here as a reference point, not as a statement of what the law requires of your company. US federal purchasing rules make a useful distinction: they forbid breaking down requirements into purchases below a threshold "merely to" avoid the rules for larger purchases (FAR 13.003). The test is the purpose: buying in stages for a real reason is not the problem; dividing a purchase to avoid a check is.

How to stop it: policy, route, review

1. Write the rule: one need, one total

Add three sentences to your purchasing policy:

• One need is one requisition. Items for the same purpose, from the same supplier, needed at the same time go on one requisition, and its full total (including VAT and delivery) decides who approves it.
• Limits also apply per supplier per period. If requests to one supplier add up to more than an approver's limit within a calendar month, the next one goes to the next level, even if it is small on its own.
• Splitting is not allowed. Say so, give an example, and say what happens if it is found. The Palm Beach guidance recommends exactly that: prohibit it expressly, give examples and set consequences.

Then explain the rule to staff, including why it exists. The person who splits a purchase to beat a slow approver needs to hear that the fix is coming, not only that the shortcut is closed.

2. Fix the route so the honest path is quick

A rule that makes everything slower will be bypassed again. For limits by amount and a one-page matrix of who approves what, see who can approve what. Two points matter for splitting:

• Recurring purchases need a standing approval. If a site buys diesel from the same supplier every week, four ₦300,000 orders a month are ₦1,200,000. Have that monthly figure approved once, at the level it deserves, instead of approving four "small" orders.
• Raise or lower limits deliberately. If honest staff keep landing just above a limit, review the limit rather than letting them split around it.

3. Review the records every month

Policy without review fails quietly. Once a month, the finance manager or owner (not the people who approved the purchases) looks for the patterns below and asks about each one. Ask "what was this for?" first; most answers are innocent and teach you where the process needs work.

Red flags to review monthly

Copy this checklist into your month-end routine. The first three follow the indicators in the Palm Beach guidance; the rest are practical checks of our own.

• Two or more requests to the same supplier for similar items within a few days, each just under an approval limit.
• Requests for one job split by type, such as labour on one request and materials on another, that together exceed the limit.
• Sequential requests or purchase orders (consecutive numbers or dates) from the same requester or department, each below a limit.
• Total spend with one supplier in the month above the approver's limit, even though each request was below it.
• Several requests whose amounts sit just under the limit (for example ₦240,000 to ₦249,999 under a ₦250,000 limit).
• The same requester and approver on a run of similar small requests.
• Requests raised days apart for items that were obviously needed together, such as a desk and its chair.

A worked example (illustrative)

The company, supplier and figures below are illustrative. The limit for department heads is ₦250,000.

Each request is below ₦250,000, so the department head approved all three. Together they are ₦468,000: one need (six chairs for a new team), one supplier, one week. Under the rule above, this should have been one requisition approved by the finance manager, who would probably have asked for a second quote on the full quantity.

The monthly review would also catch a slower pattern: three printing jobs from the same supplier at ₦240,000, ₦235,000 and ₦245,000 in one month add up to ₦720,000.

How RequisitionPro helps

The rule is yours to write; the platform helps with the route and the review. Be clear about the limits first: RequisitionPro does not route requisitions by amount and does not detect or block split purchases. Every requisition from a department follows that department's approval steps whatever its total, and the review below is done by a person.

Difficulty: approvals depend on who happens to be asked. A Company Admin sets up an approval workflow for each department, with each step assigned to specific people or a role such as the department head. Requests follow the same route every time, so the approver who applies your limit is always on it.

Difficulty: you cannot see spend by supplier. The requisition form has an optional Vendor field, with the hint "Create separate requisitions for different vendors". Make choosing the vendor compulsory in your policy, because the app does not force it. Each vendor's page then shows an "Approved Reqs" total: the combined value of approved requisitions linked to that vendor. It is a running total, not a monthly one, so use it to spot suppliers worth a closer look.

Difficulty: patterns hide in a long list. On the requisitions list you can filter by status, category, priority and date range (such as the last 30 days), and a Company Admin can also filter by department. Sorting by amount or created date then brings a run of near-limit requests from one department to the surface. A Company Admin can also export a Requisition Detail Report for a chosen period and department, as an Excel file or a printable PDF view, listing each requisition's number, requester, title, department, dates and amount. That export does not include the vendor, so pair it with the vendor totals above.

Difficulty: proving who did what. The audit log, open to Company Admins, records requisition and user activity, such as who created a requisition and when. Filter it to requisitions and a date range when a red flag needs a closer look.

Together this gives you policy, approver review and reports. The judgement about whether three requests were one need stays with your reviewer.

Related questions

Is buying from the same supplier twice in a week always splitting? No. Two genuinely separate needs, such as stationery on Monday and a broken printer part on Thursday, are not one purchase. The question is whether the requests were one need divided to stay under a limit.

Should we punish staff who split purchases? Start by asking why. If the cause was a slow approver or an unclear rule, fix that and explain the new rule. Repeated or concealed splitting after the rule is clear is a disciplinary matter, and a pattern linked to one supplier deserves a closer look for fraud.

What period should we use to add up spend per supplier? A calendar month is simple and matches most month-end reviews. Use a week for fast-moving purchases, or the length of a project for project work.

Next step

Watch the "Reports, Analytics & Exports" video (3:00) on our tutorials page to see the reports and exports you can use for the monthly review.