Sutthi sun ippc 6


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Sutthi sun ippc 6

  1. 1. Auditing Public Procurement Roles of the Office of the Auditor General of Thailand in Ensuring Transparency and Accountability in Public Procurement Dr. Sutthi Suntharanurak Office of the Auditor General of Thailand 1
  2. 2. Outline • Background of Public Procurement in Thailand • Auditing Public Procurement of OAG Thailand • Looking Forward to Improve Auditing Public Procurement in Thailand 2
  3. 3. Background of Public Procurement in Thailand 3 Regulation of the Office of the Prime Minister on Procurement of 1992 (ROPMP) Fairness Prudence Transparency Accountability
  4. 4. Main Actors in Public Procurement in Thailand 4 The Public Procurement Office (PPMO) The Committee in Charge of Procurement (CCP) Office of the Auditor General of Thailand (OAG) National Anti- Corruption Commission (NACC) Government Agencies
  5. 5. Public Procurement Method in Thailand • Price agreeing (negotiating) method • Price inquiry (selective tendering) method • Competitive bidding (open tendering) method • Special (limited tendering) method • Special case method • Electronic procurement (E-auction) 5
  6. 6. Factors of selecting procurement method • Value of Contract • The nature of good or services • The urgency of the procurement • E-Auction  Over THB 2 Million (Approx USD 50,000) 6
  7. 7. Government Procurement website 7
  8. 8. Auditing Public Procurement of OAG Thailand • Office of the Auditor General of Thailand is the supreme audit institution (sai) in Thailand. • Under the Organic Act of State Audit B.E.2542 (1999), OAG has a mandate to audit public procurement. • The Lima Declaration of Guideline on Audit Precepts 8
  9. 9. Section 21 of Lima Declaration 9
  10. 10. Value and Benefit of Auditing Public Procurement 1. Ensuring accountability and transparency 2. Preventing improper procurement practices 3. Improving upon past procurement performance 10
  11. 11. 11 Audit Approach Regularity Audit Performance Audit Financial Audit Compliance Audit Value for Money
  12. 12. Auditing Public Procurement of OAG Thailand • OAG Thailand have conducted compliance audit in public procurement. • We established Procurement and Investigative Office (PIO) to serve public procurement audit. • The main objective of auditing public procurement is to ensure that the procurement process of goods and services including public works have been conducted the public procurement law & regulations. 12
  13. 13. Three Phases in Public Procurement Audit 13 1 • Audit of Preparation of Procurement Plan 2 • Audit of Tendering and Awarding Processes 3 • Audit of Contract Management
  14. 14. Three Perspectives for auditing public procurement To obtain value for money To support competitive public procurement market To ensure transparency process 14
  15. 15. Audit Method in public procurement 15 Document Verification Physical Observation Tendering Observation
  16. 16. Auditing of Preparation of Procurement Plan • The Notification of State Audit Commission about making preparation of procurement plan of audit entities B.E. 2546 (2003) • The audit objective is to enhance the good governance in the public procurement system of audit entities. • Audit Method  Documentary Verification 16
  17. 17. Audit of tendering and awarding process • The audit objective is to examine the accuracy of tendering and awarding processes under relevance laws and regulations. • Audit Method  Document Verification  Tendering Observation • Audit criteria  Transparency  Accountability  Fairness  Competitive 17
  18. 18. Main Processes which auditor will examine 1 • The Identification of needs  Document Verification 2 • Bidding Process  Document Verification and Tendering observation • Under transparency, fairness, non-discrimination, and competition 3 • Estimating cost  Document Verification • Under reasonable cost 4 • Evaluation committee  Document Verification • Under issues of avoiding conflict of interest, fair decision for selecting of awarding bidder 18
  19. 19. Audit of Contract Management • The audit objective is to examine the execution of public procurement contract. • Audit Method  Document Verification  Physical observation 19
  20. 20. Audit Phase Audit Method Documentary Verification Tendering Observation Physical Observation Preparation of procurement plan / Tendering and awarding processes / / Contract management / / 20
  21. 21. Some audit findings in Public Procurement 21 • The audit entities did not prepare procurement plan. • At requirement stages, the audit entities had inadequate review of existing and required inventory. Preparation Procurement Plan • The specifications are not clearly defined. (Lock out specification) •A very limited number of offers received.  Limited competition •Document indicates unusual involvement of an official. •Suspicious about conflict of interest •Evidence of early receipt of information by some contractors •Request for proposal is not properly advertised. •Bid rigging or Collusion among bidders •Unusual handling of bidding process •Evaluation criteria are not consistent for different bidders. •Exceptions to the tender deadlines •Excessive project cost Tendering and Awarding Processes •Project has been unused. •Changes in a contract result in a large increase in the cost of goods and services •Changes made without adequate information. •Unwarranted contract extension •Complaints about the quality of goods and services received •Inadequate inspections and quality assurance of goods and service received •Dubious invoices Contract Management
  22. 22. Audit Finding in Public Procurement Fiscal Year* Number of cases of audit finding Volume (Billion Baht) 2012 1,183 13.35 2013 1,865 27.13 2014** 1,065 5.51 Source: Office of the Auditor General of Thailand * In Thailand, the fiscal year is started at 1st October till 30 September. ** The data is showed between 1 October 2013 and 30 April 2014. 22
  23. 23. Audit Reporting 23 Office of the Auditor General of Thailand State Audit Commission Parliament Council of Ministry Audited entities National Anti-Corruption Commission
  24. 24. OAG and Citizen Engagement in Public Procurement Public Procurement Watch with OAG 24
  25. 25. Looking forward to improve auditing public procurement in Thailand Auditing Public Procurement To encourage the integrity of procurement system To reduce the risk of corruption in public procurement 25
  26. 26. Looking Forward in Auditing Public Procurement 26 Compliance Audit in Public Procurement Performance Audit in Public Procurement which focused on 3Es- Economy, Efficiency and Effectiveness Good Governance in Public Procurement which is under concept of transparency, accountability, supporting competition, and citizen engagement
  27. 27. Procurement Performance Model 27
  28. 28. 28