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Procurement

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Procurement

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  1. Welcome to the Presentation OnThe Role of Supreme Audit Institution (SAI) in Ensuring Transparency And Accountability in Public Procurement: Bangladesh PerspectivePresented By-Ahmed Ataul Hakeem Comptroller and Auditor General

  2. Procurement Procurement means the purchasing or hiring of Goods or acquisition of Goods through purchasing and hiring and the execution of works and the performance of Services by any contractual means.

  3. Importance of Procurement Audit • Procurement as a category involves the largest volume of expenditure in the annual development budget of Bangladesh • About 75% of development budget and 25% of revenue budget of the government are spent on public procurement. • It is also the second largest category of expenditure in the revenue budget of the government. • The size of public procurement in Bangladesh is steadily increasing every year.

  4. The Legal RegimeProcurement Policy is guided by- • The Public Procurement Act 2006-73 Sections (Effective on January 31st 2008) • The Public Procurement Rules 2008- 130 rules (Effective from the same date as the Act i.e. from January 31st 2008) • Delegation of Financial Powers(Revenue) • Delegation of Financial Powers(Development) • General Financial Rules and Treasury Rules • Administrative Orders/Good Practices • Agreement with international bodies.

  5. Procurement Methods

  6. Procurement Methods for Services Quality & Cost Based Selection(QCBS) QCBS is the preferred method and it is based on the quality of the Proposal and the cost of the Services. Fixed Budget Selection(FBS) FBS is appropriate only when the assignment is relatively simple, precisely defined and the budget is fixed.

  7. Electronic Government Procurement (e- GP) • The e-GP is being introduced in the country to materialize the government’s vision for building a Digital Bangladesh. • This system will be introduced in two phases. In the first phase e-tendering will be introduced in the four targeted departments. In the second phase, e-Contract Management System (e-CMS) will be introduced. • Under the e-GP system the tenderers are not required to remain physically present to submit the tenders and thus the tenderers will be relieved from the coercive practices. • This will broaden competition and will usher a new era in ensuring transparency and accountability in public procurement.

  8. Some Miscellaneous Provisions • No restriction based on color, nationality, race etc. • Tender security is 1-3% of estimated cost. Mandatory in OTM but not in LTM. • Even a single responsive tender can be accepted. • No lottery except in case of price tie in Limited Tendering Method(LTM). • No negotiation except in procurement of service and procurement under Direct Procurement Method (DPM).

  9. Objectives of Procurement Audit • To ascertain whether the process of acquiring goods and services ensures quality, quantity, accurate time, right price and right source. • To ensure whether the objective with which the procurement of goods and services is made has been accomplished. ( This involves examination and assessment of requirements, placement of purchase orders, storage, consumption, utilization and cost recovery)

  10. Audit Procedure Audit mainly checks that: i) Adequate publicity is ensured. ii) Bidding documents clearly define the bid evaluation criteria ; iii) Performance security is in an appropriate form and sufficient; iv) Bids are opened in public, read aloud and recorded; v) The evaluation committee has been formed properly vi) contract has been awarded to the lowest bidder vii) Criteria and methodology for selection of successful bidder outlined in the bidding documents have been properly applied.

  11. Some Findings in Procurement Audit • Annual Procurement Plan (APP) is not prepared properly and procurement is made as and when required basis. • Tender Evaluation Committee(TEC) not formed properly with external representation. • Procuring Entities are not following the guidelines in the course of taking additional deliveries from original suppliers. • Appropriate procurement method is not followed.

  12. Some Findings in Procurement Audit contd. • Split up technique adopted to avoid the sanction of higher authority. • Wide circulation is not ensured in advertisement. • Exceed the allowable limit for a particular method. • Performance security not taken properly and not forfeited in case of non-performance.

  13. Some Findings in Procurement Audit contd. • Tender documents are not prepared properly or prepared so as to favour a particular bidder. • Acceptance of tender at a higher price as compared to the estimated cost. • Acceptance of tender at a much lower price than the estimated price resulting in the failure of the bidder to deliver goods.

  14. PAC deliberations on Audit Reports on Public Procurement • A procuring entity adopted unfairmeans in publication of advertisement in the daily newspaper. PAC recommended to recover a part of money spent from the persons involved. • Bangladesh Railway procured sub-standard slippers and PAC recommended to recover the money from person involved. • Medical and Surgical Requisites (MSR) procured at a cost much higher than market price and PAC recommended to recover the money from person involved.

  15. PAC deliberations on Audit Reports on Public Procurement contd. Goods were not received properly in a project of Primary and Mass Education Ministry, causing loss to the government. The matter is pending with the Anti Corruption Commission for long, the PAC in its 15th meting asked for explanation for the delay and recommended for the supervision and follow-up of the case by the Ministry also.

  16. Challenges in the audit of Public Procurement • Audit of public procurement requires special expertise on the part of the auditor. So attaining adequate knowledge is the biggest challenge. • Procurement rules are vibrant and so are the technicalities. So the auditors have to have proper expertise and up to date knowledge in this area. • E-procurement is being introduced and so auditors have to have knowledge on IT Audit.

  17. Conclusion Public Procurement Auditing is one of the most effective instruments of ensuring transparency and accountability in public procurement system and practice in Bangladesh. The OCAG Bangladesh has been striving hard towards fulfilling this constitutional obligation, thus ensuring maximum dividends for all the stake holders.

  18. Thanks to all. Questions are welcome

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