Eastern African Association of Public Accounts Committees (EAAPAC)

&Southern African Development Community

Organisation of Public Accounts Committees (SADCOPAC)

How to use Audit Reports to oversee Public Procurements

John F. S. MuwangaAuditor General-

UgandaKampala, 7 May 2013

Eastern African Association of Public Accounts Committees (EAAPAC)

&Southern African Development Community Organisationof

Public Accounts Committees (SADCOPAC)

How to use Audit Reports to oversee Public Procurements

John F. S. MuwangaAuditor General-Uganda

Kampala, 7 May 2013

LEGAL MANDATE OF OAG

The Mandate of the Auditor General (AG)The Constitution of Uganda - Article

163 ~ audit and report to Parliament on the public accounts of Uganda.The National Audit Act (NAA) 2008,~ section 21- conduct value for money audits of all projects involving public funds. ~ under section 13(e)- shall undertake procurement audits.

Objectives of the Procurement Audits

Ensure the Application of;◦ fair,◦ competitive, ◦transparent, ◦non-discriminatory ◦value for Money procurement and

disposal standards and practices are followed

Procurement procedures undertaken OAG

Inquire whether there has been a procurement audit by PPDA. Obtain the report and review its scope, methodology and where possible the qualifications of the auditor before relying on it.

Review audit issues raised and action taken by management to address them

Extract issues raised and not addressed and report on them

For complex procurement request for procurement expert

Procurement procedures for sample selected Procedure Risks (What can go wrong) Review the entity budgets and reconcile it with the procurement plans

Deliberate failure to plan for procurement leading to emergency requirements- Procurement planning is a mandatory requirement under Section 58 of the PPDA Act

Ensure appropriate documents are kept as required by the procurement laws and procedures

False documentation and Statements

Our experience is that there is still a big problem with record keeping and this is a very prone area procurement corruption.

Review for repetitive transactions in a year and confirm whether their procurement followed the procurement procedures

Splitting of procurements

Procurement procedures cont… Confirm whether the value of the procurements followed the PPDA threshold

The procurement guidelines provides thresholds as a basis for choice of procurement methods. The higher the value the more competitive methods of procurement that should be used. Rigged Specifications, terms of reference

Review the procedures for bid issuance and receipts to ensure compliance

Bid Rigging – this may happen even after bid submission

Review the contract awards patterns and review any circumstances that may indicate bid collusion

Bidders collusion in bidding instead of competing

Under the PPDA regulations – Bidders are required to adhere to the ethical code

For high value procurements, check whether post evaluation reviews were made to confirm previous works done (due diligence)

Brief case providers – unreliableEligibility requirements if adhered and due diligence could minimise this

Procurement procedures cont… Check whether each procurements had a different evaluation committee and properly instituted.

One Evaluation Team for all procurements

Ensure that sourcing of the procurement follow the PPDA guidelines

Unjustified single Source Awards or direct procurements

The PPDA regulations provides guidance on where direct procurement is applicable

Review the reasonableness of evidence for contract evaluation

Rigged contract amendments and variations

Review the code of ethics were signed as required and inquire whether there are circumstances they may have indicated conflict of interest

Conflicts of Interest

Confirm evidence that support the claims and re-compute the payments taking into account all deductions

False payments and claims

Real time procurement procedures Use of the procurement plans to

follow up procurements timely as they occur

Using a risk assessment, the Auditor General may appoint a person to seat on the procurement committees as an ex-official to observe the procurement processes and make an opinion thereafter.

Post Procurement Audit actions

◦The Auditor General may request the Accounting Officers to prepare Action plans for implementation of the audit recommendations.