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Is there any need for CAG to employ Procurement Experts?

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IS THERE NEED FOR CAG TO EMPLOY PROCUREMENT EXPERTS?

Post  Kawunju on Tue Oct 25, 2011 12:26 pm

I strongly concur with “Angel” that traditional audit looked at finance only. This time PPRA need to put effort in collaboration with “CAG’s” External Auditors. Traditionally, auditors from CAG are feared like "hell" in most of PE visiting. However, I do not mean PPRA experts should be feared the same, instead PPRA should build procurement capacity to External Auditors from CAG as Finance and Accounts are their qualifications. Concentrations during that training should be Compliance Performance Indicators. This will enable auditing not be limited to “Have all necessary documents attached in with payment vouchers?” Criteria for audit used PPRA should resemble with CAG without change.
As comment put, it is very tongue-tied, nauseating and disreputable for a non procurement expert to audit a procurement expert. CEO - PPRA should harmonize audit process by agreeing with CAG that during their audit visit PPRA will be sending their experts along with them. This will assist to limit double auditing standard and the same PE be visited by two different Regulators who have same ambition and probably seeking same document and having same interrugations. In a layman's language the PE which had been provided with unqualified opinion by CAG, being awarded disclaimer opinion by PPRA in procurement proceedings and procurement process creates a “house of confusion”.

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Re: Is there any need for CAG to employ Procurement Experts?

Post  Rutaihwa on Thu Oct 20, 2011 5:21 pm

Yes
There is a need for CAG to employ procurement experts, although most of his staff has gone short courses purposely for procurement Auding are not procurement experts but are specialised in Accounting and Finance field.
Its time now PPRA to play its part as per Sec 7(a) Public Procurement Act No 21 of 2004 to advise CAG.



fmwalongo wrote:Currently CAG and his staff are not experts in procurment ie is not certified. This is because the traditional audit looked at finance only. For CAG to have the capacity to audit procurement he has to employ procurment experts no questions about that. It is very awkward, irritating and contemptible for a non procurement expert to audit a procurement expert. In a layman's language a person who is not qualified to audit a qualified person.

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Re: Is there any need for CAG to employ Procurement Experts?

Post  fmwalongo on Fri Oct 15, 2010 12:12 pm

Currently CAG and his staff are not experts in procurment ie is not certified. This is because the traditional audit looked at finance only. For CAG to have the capacity to audit procurement he has to employ procurment experts no questions about that. It is very awkward, irritating and contemptible for a non procurement expert to audit a procurement expert. In a layman's language a person who is not qualified to audit a qualified person.

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IS THERE A NEED FOR CAG TO EMPLOY PROCUREMENT EXPERTS?

Post  mauka on Sun Jun 20, 2010 1:20 am

I do agree with you, Angela plus RSM when I consider the scope, the purposes and interest of the public in ensuring better use of public money in public procurement audit on the basis that;

Public procurement is an activity that is implemented by procurement expert through the expenditure of funds in the procurement of goods, services and works to be used by the central government, local governments and statutory bodies.

In financial point of view, the institutions that have spent the funds have to be audited to establish if the funds were spent as intended. But on procurement school of thought, procurement activities have to be audited to establish if the spending institution complied with procurement legislations and organization procedures in order to ensure that the entire set of activities in public procurement are effectively and efficiency executed with reasonable and acceptable expenditure. This activity is generally called procurement audit.


In this perspective, the issue of employment and co-operation between the CAG`s team and procurement experts in the exercise of procurement audit is basically unsettled issue. From my own point of view, I think the above cooperation should be seriously taken into account and in long run it should be stated in the Public Procurement law.

Let’s take an example from our neighbor, Kenya. In Kenya, the Public Procurement Oversight Authority (PPOA) has not been empowered to conduct procurement audit. Rather it is done by Controller and Auditor General.

As per Section 49 (1) (b) of Public Procurement and Disposal Act 2005, provide that; “the Controller and Auditor-General, or an auditor authorized by the Controller and Auditor-General, may audit the accounts of the procuring entity and contractor relating to the contract and the procuring entity and contractor shall co-operate with and assist whoever does such an audit”

Dear forum members, the essences of cooperating and/or employing procurement experts in execution of procurement audit are obvious and vivid. Angel`s submission pointed out some critical and technical issues that need assistance from procurement expert or procurement auditor.

Therefore, I think co-operation between CAG and procurement experts in carrying out the exercise should be taken into consideration and empowered by public procurement law as its in Kenya, whereby the law clear states that stakeholders have to co-operate with those empowered to conduct procurement audit in order to achieve value for money, fairness, transparency, integrity and accountability in the use of public funds.

I beg to submit.

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Re: Is there any need for CAG to employ Procurement Experts?

Post  RSM on Tue May 18, 2010 3:59 pm

Angela,

Given current trend of auditing - value for money audits, performance audits - which CAG is supposed to do he needs a multidisciplinary team. Audit teams need to include various experts - financial auditors, procurement experts, engineers etc depending on the nature of audits.

It would be appropriate therefore if they recruited procurement experts in their audit teams as you suggested.

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Is there any need for CAG to employ Procurement Experts?

Post  Angela on Wed May 12, 2010 4:20 pm

Section 44 (2) of the Public Procurement Act and Regulation no. 31 GN 97 of 2005 mandate Auditors (CAG members) of each institution to report whether PPA has been complied in undertaking procurement of an institution.

Section 56 and Regulation no. 19 (5) of GN 97 of 2005 directs Procuring Entities to keep Records, information and notices for not less than five years to be accessible to CAG for audit and other stakeholders defined that section. Moreover, Regulation no. 59 (5) of GN 97 of 2005 directs keeping records and making available for inspection by CAG for matters related to electrical, machinery and mechanical engineering.

Again, CAG is sent with tender board decisions; Regulation no. 96 (2) of GN 97 and 22 of GN 98 of 2005 and copies of contract, in accordance to Regulation no. 116 of GN 97 of 2005 and Time Extension orders accordance to Regulation no. 118 (5)

The intention of these all is to discover any misconduct in right time and advice on corrective measures.

The challenge is the ability of CAG members to interpret issues in the procurement proceedings and bringing them up.

There are issues related to procurement audit which needs in-depth practical knowledge in order to bring them up.

For example if one at CAG receives a contract document and reviews, will he be in a position to interpret such clauses as one which relate to performance guarantee, advance payment and guarantee and to see to it if a PE requested and secured such guarantees in accordance to the contract terms?

Another small example is inclusion of liquidated damages provisions in the contract to protect the purchasers against risks in delay in delivery. The challenge here is for one to bring the issue of having or not having such provisions in a contract and if penalties were imposed according to liquidated damage clauses for delivery beyond schedule.

These are very few and small examples, technically there are many issues which may bring challenge to members of CAG.

Is training auditors on techniques on how to conduct public procurement sufficient or is there any need for CAG to consider having procurement experts in his team?

Angela

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