CORPORATE SERVICES Review of Tendering and Pre-Contract Stages At Glasgow Life. Final Report

Transcription

1 CORPORATE SERVICES Review of Tendering and Pre-Contract Stages At Glasgow Life Final Report INTERNAL AUDIT Glasgow City Council Internal Audit 1 NOVEMBER 2011

2 Corporate Services Review of Tendering and Pre-Contract Stages at Glasgow Life Table of Contents Section No Section Title 1 Introduction and Background 2 Audit Remit 3 Audit Opinion 4 Conclusions 5 Recommendations 6 Service Implications 7 Recommendations for Committee Action Plan Glasgow City Council Internal Audit 1

3 Corporate Services Review of Tendering and Pre-Contract Stages at Glasgow Life 1. Introduction and Background Glasgow Life is responsible for its own procurement exercises. However, as part of the Council family, Glasgow City Council can draw down on contracts tendered by Glasgow Life and from a governance perspective it is essential to ensure that Glasgow Life are adhering with relevant procurement regulations and best practice. This audit was undertaken as part of the 2011/12 Audit Plan to provide assurance to the Council that Glasgow Life is following appropriate procurement procedures. 2. Audit Remit The purpose of the audit was to gain assurance that the team within Glasgow Life are following and adhering to the Glasgow Life Manual during the tendering and pre-contract stages of procurement. The audit also assessed compliance with European procurement regulations and, where relevant, good practice identified by the CIPFA document A Risk-based Approach to the Audit of. 3. Audit Opinion Based on the audit work carried out a reasonable level of assurance can be placed upon the control environment. Ten further opportunities for improvement which management should address were identified. 4. Conclusions Based upon the work carried out, the conclusions reached during the audit were as follows: Appropriate documentation was retained for all contracts, either manually or on the Bravo e-tendering system; The notification of PQQ criteria and timescales, and the assessment used at ITT stage were found to be adequate; All officers preparing and approving the contract and tender documents are included on the register of procurement officers; The procedures for the recording of information in the CMS system have not been adhered to resulting in incomplete and inaccurate information being recorded; Glasgow City Council Internal Audit 2

4 Procedures for the financial vetting of suppliers require to be improved to ensure contracts are not awarded before a decision is taken on the financial results, and that requests for financial checks are only made for shortlisted companies; The requirements of the EU procurement process in relation to contract award notices have not been adhered with; One instance was noted where there was no signed copy of contract documents without this, there is no assurance that the supplier has agreed to be bound by the contract terms; No training or guidance has been issued to officers to help determine circumstances where collusion may have taken place, increasing the risk that collusion between tenderers may go unidentified, and There is no central record maintained of instances where quotes have been undertaken, and suppliers invited to quote have not been notified of the evaluation criteria (as detailed in the procurement manual). 5. Recommendations Resulting from the conclusions, 10 recommendations for improvement, 7 rated high priority, 2 rated medium priority and 1 rated low priority were identified. These recommendations and the organisation s responses are shown below. 6. Service Implications Legal Financial Personnel Service Plan Environmental None None None None None 7. Recommendation for Committee It is recommended that the Head of Audit and Inspection submit a further report to Committee, with an update on the implementation of the recommendations in due course. Glasgow City Council Internal Audit 3

5 Title of the Audit: High Key controls absent, not being operated as designed or could be improved. Urgent attention required. Risk Ratings for Recommendations Medium Less critically important controls absent, not being operated as designed or could be improved. Low Lower level controls absent, not being operated as designed or could be improved. Key Control: Tendering exercises and contract awards are undertaken in compliance with procurement regulations and agreed procedures 1 s must ensure the processes High Yes It is GLs intention to Complete to be followed when undertaking an complete all award EU tender, including the requirement to publish the Contract Award Notice notices on time. The Terms accompany the within 48 days of the contract being ITT in all tenders awarded however on occasion discussions after award in relation to technical aspects of the contract between supplier, legal officers and the Project can lead to a delay in finalising the Terms. Award notice for this contract is now published. Glasgow City Council Internal Audit 4

6 Title of the Audit: 2 A central register of all quotes undertaken by GL should be established which records all details of the quotes including the officer responsible, the authorising officer, the suppliers invited to quote, the value of the contract, the duration of the contract, the successful supplier and any other relevant information High Yes Amendments have been made to the Quotes guidance and templates on the GL intranet: 1. Notification of planned quotation to be registered 2. Appropriate details to be recorded on register 3. advisors will reinforce requirement at their meetings with service areas 4. Further communication will be issued to GLs Leadership s to ensure compliance. December 2011 Glasgow City Council Internal Audit 5

7 Title of the Audit: 3 For the Race Admin and Timing contract, the Contract Award Notice should be published in OJEU immediately 4 s must ensure that all contract documents are signed by the relevant parties prior to the contract becoming operational High Yes Due to reasons stated above a delay was incurred but Award Notice has been published. is working with legal and Project s to improve the planning process and allow adequate time to complete requirements. High Yes It would always be GLs intention to have all contracts signed prior to operational start. We are working with our legal officers and service areas to ensure this. Complete November 2011 Glasgow City Council Internal Audit 6

8 Title of the Audit: 5 The agreement on the terms and conditions for the Digital Partner contract must be concluded and signed immediately 6 s must ensure that all procurement staff responsible for maintaining CMS update the system with relevant contract information to ensure an accurate database of current and expired contracts (including income generating contracts) is maintained High Yes Award of this contract was delayed due to negotiations in relation to a number of complex technical aspects of the contract between the supplier and the PM. Contract is now complete. Medium Yes GL will work with legal officers and PMs to allow the completion of tenders and CMS. All income tenders are now included Complete November 2011 Glasgow City Council Internal Audit 7

9 Title of the Audit: Key Control: A robust method of evaluating tenders is in place and being adhered to 7 Management must ensure that High Yes This is normal procurement staff arrange financial checks before the award of the practice. The audit finding related to a contract particular tender where the financial check ran in tandem with the award to meet operational delivery time scales. The risk was assessed at the time with the project team. 8 s must ensure that procurement staff inform suppliers of the criteria to be used when evaluating award made following a quotes exercise. High Yes Included in the process and guidance notes on the intranet. The criteria to be used forms part of the invitation to quote template. This is the role of the PM who carries out the quotation exercise. Complete November 2011 Glasgow City Council Internal Audit 8

10 Title of the Audit: 9 Training and/or written guidance should be given to assist procurement officers in identifying occasions where collusion between tenderers may have taken place 10 s must ensure that procurement staff only requested financial checks for the companies shortlisted for the ITT stage Medium Yes GL recognised that was required as part of ongoing training and was arranged with CPU but had to be cancelled. New date TBA. Low Yes Previously agreed between the CPU and Internal Audit (Aug 2010) that checks would only be carried out on companies short listed for ITT. This advice was passed to GL who implemented this at that time. December 2011 Complete Glasgow City Council Internal Audit 9