1) The document discusses the role of auditors in overseeing PPP (public-private partnership) projects for regional development. 2) It notes that PPP award processes often involve negotiation and different skill levels, and value for money depends on both award and execution phases, so auditors should assess contract management planning and the likely impact of award decisions. 3) The document poses questions for discussion about how auditors can best understand and manage risks in the negotiation phase of PPP awards, assess if value for money is being achieved in contract execution, and report their findings.

1. learning and development - consultancy - research EIPA 2018©
PPPs for Regional Development – Discussion on role of
auditors
OECD Network of Senior PPP and Infrastructure
Officials, 11th Annual Meeting, Paris, 27 March 2018
Michael Burnett, Director, European PPP Forum, European Institute of
Public Administration, Maastricht, the Netherlands @eipappp

2. EIPA 2018 - www.eipa.eu©
Introduction – Self
 UK Chartered Accountant (20+ years working in
PPP/public procurement/audit)
 Assistant Director, KPMG
 Director, EIPA European PPP Forum since 2005
 Member, Editorial Board, European Procurement
and PPP Law Review since 2007
 Member, European Commission Stakeholder
Expert Group on Public Procurement since 2012
 Author, 3 books on PPP and on Competitive
Dialogue and Negotiated Procedures

3. EIPA 2018 - www.eipa.eu©
Key challenges for sub-national PPPs
 Not all PPP transactions bear an equal risk of
sub-optimal outcomes (different geographical
risk, awarding entity risk, economic operator
risk, sector risk, transaction risk etc.)
 PPP award processes usually involve
dialogue/negotiation - often different skill levels
of the awarding body and of economic operators
 Value for money (VFM) in PPP contracts is based
both on what is secured in the award phase and
what realised in the execution phase
 Awarding bodies must plan how they will
manage the contract execution phase early in
the contract award process

4. EIPA 2018 - www.eipa.eu©
Key issues for auditors – 1
 Auditors are a key part of the regulatory
framework for PPP at sub-national level
 Auditors need to prioritise their activities based
on risk assessment of PPP transactions and the
impact if risks materialise
 Procedures involving dialogue/negotiation (as
PPP usually are) should be prioritised by
auditors because they are long-term high value
contracts with risks in the planning and
preparation phase and in the conduct of
dialogue/negotiation which need to be managed

5. EIPA 2018 - www.eipa.eu©
Key issues for auditors – 2
 As VFM is based both on what is secured by in
the contract award phase and what realised in
the contract execution phase, auditors need to:
- Audit planned contract management
arrangements during the contract award phase
- Undertake ex ante/in progress audit of the likely
impact of decisions made in the contract award
phase on securing VFM for planned outcomes
- Undertake ex post audit of VFM secured in the
contract award phase
- Continue with regular (at least annual) audit of
VFM realised in the contract execution phase

6. EIPA 2018 - www.eipa.eu©
Questions for discussion
Award stage
 How well understood are the key risks in the
dialogue/negotiation phase of a PPP award?
 How can these risks best be managed?
 How should auditors audit dialogue/negotiation?
Execution phase
 How can auditors assess if awarding bodies are
securing VFM in the contract execution phase?
Reporting
 How and when should auditors report on their
findings re the award or execution phase?

7. EIPA 2018 - www.eipa.eu©
European PPP Forum
CONTACT DETAILS
Mr. Michael Burnett
Director, European PPP Forum
European Institute of Public Administration
Maastricht, the Netherlands
Tel +31-43-32 96 286 E-mail: m.burnett@eipa.eu
Follow me on Twitter@eipappp