Every year, the Auditor-General’s Office (AGO) prepares a report on selective audits conducted on various Government bodies, which highlights various lapses that occurred in the Financial Year. At TenderBoard, we study these lapses in procurement and develop case studies to help our buyers understand how they can avoid similar errors in future.
Errors in procurement can usually be classified into three main categories – Policy, Process and Procedure.
Lapse in Policy
Policy helps provide the “why”: the overall direction for all actions taken by an organisation. Lapses occur when policies are not clearly spelt out.
For instance, the Funding Agreement between the Ministry of Culture, Community and Youth (MCCY) and National Gallery Singapore (NGS) was clear on approval authorities on spending. However, it did not explicitly spell out the authority for contractual waivers, particularly for waiving penalties on contractors (e.g. for late delivery).
Ultimately, NGS took it upon itself to decide on the waivers which led to AGO flagging this out as a lapse in policy.
Lapse in Process
Process states “what” should be done, and this tends to be the largest category of lapses. In the report alone, we see the following lapses in process:
- Works proceeding without adequate approval – in the National Gallery project, it was highlighted that contract variations had been carried out before approvals had been obtained – approvals recorded in the system were found to have been as long as 3.9 years after the works had been performed.
- Works proceeding without adequate comparison – for the same project, some works were authorised based only on a single quotation from the contractor, with no formal assessment as to the reasonableness of the quotation.
- Lack of evaluation criteria – both Majlis Ugama Islam Singapura (MUIS) and the National Council for Social Service (NCSS) were flagged for not establishing evaluation criteria before tender closing, which could have resulted in evaluation criteria being set to favour one bid over another.
Lapse in Procedure
Procedure details the “how”, focusing on the steps needed to carry out the process well. For instance, when NCSS conducted a tender for printing services, only one bid was received.
AGO found that while tender specifications were provided, they were insufficient for new vendors to provide reasonable quotations, and thus only the incumbent vendor was able to provide a quotation.
What can we do to avoid procurement lapses?
Even the well-oiled machinery that is the Singapore Government is unable to avoid procurement lapses. It is no surprise then, that many organisations ask us at TenderBoard how they can avoid adverse audit findings. Here are some of the tips that we share:
- Understand procurement best practices when setting policy
Procurement policy is far from one-size-fits-all, what’s best for one organisation might not be best for another. TenderBoard’s experience with implementing systems for a wide range of buyers allows us to share procurement best practices with our new buyers, helping them to set policies suitable for their organisation.
- Automate procurement processes where possible
Once policies have been established, rather than relying on manual processes, implementing an eProcurement system helps to ensure that processes are fully followed. For instance, using TenderBoard, organisations are able to specify approvers by purchase value, ensuring that all Purchase Orders issued will have been approved at the correct levels.
- Train staff to understand the “why” as well as the “how”
Staff can often view procurement policy and processes as red tape in the way of them getting what they need to do their work. It is important to help staff understand not just how to use procurement systems, but why procurement policies are put in place. Thus, we design our training at TenderBoard to ensure that users view the system as an aid rather than a barrier.
With eProcurement platforms like TenderBoard, workflow processes are automated through the system, reducing potential lapses that could happen within your organisation. If you’re planning to start digitizing and automating your procurement, be sure you pick the right system for your organisation.
At TenderBoard, we work with and consult our users to ensure successful change management and a smooth implementation. Reach out to us today at email@example.com to find out more!