Ex-post facto review, procurement audits


Public sector procurement thresholds and to some extent, the source of funds define the procurement methods to be applied.

Procurement could be funded from the entity budget, national budget, loans and grants. Lower value procurement would be achieved using less stringent systems that include competitive quotations.

Some would be sourced from the local market and decision-making in procuring entities may be delegated.

Due to the cost associated with ex-ante review, it will not be economical for the public procurement office to review low valued purchases the same way as the high valued ones.

Ex-post facto review thereby provides the fiduciary duty of the public procurement office by monitoring the procurement of low value purchases after their conclusion.

Procurement, whether low value or high value, must be done in line with procurement principles and the procurement law. Ex-post facto review would provide valuable experience to the public procurement office on how public funds are used by procuring entities. Such experience would form the basis for improvements and reforms of procurement systems.

The review would only be possible if the public procurement office issues clear procurement guidelines to procuring entities in addition to the law and regulations.

The guidelines would unpack the law and regulations to assist entities on which guideline to apply on different procurement methods.

They will include procurement procedures and procurement best practices that achieve economy and efficiency in public procurement.

In order for the ex-post facto review to be effective, procurement plans should feed into the budgets. Procurement plans state the type of procurement required, the method to be followed, cost estimates and schedules of when the product or service is required. This is necessary to reduce maverick procurement in the public sector.

The procurement plans would need to be agreed upon by the procuring entity and the public procurement office.

An ex-post facto review has capacity to review the procurement capacity within procuring entities.

The results of the review may indicate inadequate procurement capacity that poses major procurement risks.

The recommendations could be capacity building, review of guidelines, review of thresholds or determination of level and frequency of required supervision.

On the element of high value purchases which the procuring entity would conclude after receiving a “conditional no objection” from the public procurement office, procurement audits are necessary to ensure the grey area of post award activities is highly monitored.

Such audits are different from accounting audit in that they are done by procurement professionals who have capacity to perform an audit trail and uncover procurement anomalies that accounting audit cannot expose. This is against the background that procurement fraud is performed while procurement process is followed and when all documentation and authorisation is available.

An effective review of public procurement would ensure that in the law, provisions for ex-ante and ex-post facto reviews are provided. In addition, the public procurement office would need to be capacitated with relevant skills and resources to perform this technical activity that would bring about public and investor confidence.

lNyasha Chizu is a Fellow of the Chartered Institute of Purchasing and Supply writing in his personal capacity. Feedback: nyashachizu@harleyreed.com; Skype: nyasha.chizu