Internal Audit Report Procurement Review (07.07/08) Dorset District Council Procurement Review...

West Dorset District Council

Internal Audit Report Procurement Review (07.07/08)

July 2008 FINAL


Procurement Review (07.07/08)

This report has been prepared for West Dorset District Council and should not be disclosed to any third parties, including in response to requests for information under the Freedom of Information Act, without the prior written consent of Bentley Jennison and West Dorset District Council. Whilst every care has been taken to ensure that the information provided in this report is as accurate as possible, it is based upon the documentation reviewed and information provided to us during the course of our work. Thus, no guarantee or warranty can be given with regard to the advice and information contained herein.

© 2008 Bentley Jennison Risk Management Ltd Bentley Jennison Risk Management Ltd Bentley Jennison Risk Management Ltd is wholly owned by Bentley Jennison Registered in England and Wales No. 344889 Registered Office 1 Hollinswood Court Stafford Park 1 Telford TF3 3DE

Contents

Section Page

1 Executive Summary 1

2 Action Plan 5

3 Findings and Recommendations 9

4 Background 20

ASSIGNMENT CONTROL:

Debrief meeting: 25 January 2008* Auditors:

Draft report issued: 27 May 2008

Responses received: 7 July 2008

David Taylor, Partner;

Chris Harris, Partner (Contract Audit);

Allan Petchey, Contract Audit Manager

Final report issued: 8 July 2008 Client sponsor: Rosie Darkin, Finance Manager

Distribution: Rosie Darkin, Finance Manager

* Further analysis carried out post the debrief meeting including issuing a questionnaire



Bentley Jennison Risk Management Ltd Page 1

1 Executive Summary

1.1 Introduction

An audit of Procurement review was undertaken as part of the approved internal audit periodic plan for 2007/08.

The review was built around the work undertaken in the previous year to ascertain how the process of Procurement was being managed and what progress had been achieved.

Procurement is one of the fundamental functions common to all types of business. It is fundamental because without it a Local Authority cannot achieve core aims and objectives. By its very nature, procurement is an integral part of business management. Procurement is the acquisition of goods and services, ideally of the best possible quality at the best possible cost. Procurement is not just about spending money on goods and services. It is about working in partnership with others including suppliers and end users, to ensure the provision of cost effective and reliable goods and services to the required standard.

Organisations need to understand their purchasing function and ensure that all staff buy into the concept and strategy of the Council so that they buy the:

• right item;

• at the right price;

• with the best quality;

• taking into consideration areas as sustainability and whole of life costs; and

• aggregate purchasing activity ensures bulk discounts.

The review has highlighted that the Council need to ensure that policy and procedure are made congruent and then appropriately trained and promoted amongst all staff.




1.2 Overall Conclusion

Taking account of the issues identified in paragraphs 1.4 to 1.6 below, in our opinion the control framework for the area under review, as currently laid down and operated, provides limited assurance that risks material to the achievement of the organisation’s objectives for this area are adequately managed and controlled.

All Councils are required to show efficiency savings in the current and future years. The review has highlighted, as previously, that officers and members need to embed procurement best practice into everyday procedures if savings targets are to be achieved.

The officer responsible for Procurement has a detailed work programme and is moving the outstanding recommendations forward within the resources available. The Council should consider whether opportunities for savings and improved procedures are being hampered by the availability of resources to implement audit recommendations to bring about change.

1.3 Limitations to the Scope of the Audit

The objective of our audit was to evaluate the auditable area with a view to delivering reasonable assurance as to the adequacy of the design of the internal control system and its application in practice. The control system is put in place to ensure that risks to the achievement of the organisation’s objectives are managed effectively. The following limitations to the scope of the audit were agreed when planning the audit:

• There will be no detailed review of the procurement process or in depth analysis of tenders;

• It should not, therefore, be considered as a comprehensive review of all aspects of non-compliance that may exist now or in the future. Where testing may occur this would be on a sample basis. Accordingly, recommendations provided are aimed at strengthening controls and indicating improvements to contract management practice.

• Our work does not provide any guarantee against material errors, loss or fraud or provide an absolute assurance that material error, loss or fraud does not exist.




1.4 Conclusion on the Adequacy of Controls

Based on the evidence obtained, we have concluded that the design of the system of control, if complied with, is not sufficiently robust to provide assurance that the activities and procedures in place will achieve the objectives for the system.

We have made no fundamental, 8 significant and 1 merits attention recommendation arising from the following:

• strategic procurement plans need to be developed at a departmental level to support the overall procurement function:

• Corporate Services Manager of the Authority needs to map where tenders are coming into the Council and review the arrangements for opening tenders;

• decision concerning the use of Car Parking machines needs to be seen as part of the whole solution for dealing with a reduction in cash handling;

• full training programme on the Council’s Procurement Process and Procedures needs to be delivered to key officers and should cover contractor monitoring and understanding value for money issues; and

• the Council's Senior Management team needs to understand the type and risk associated with partnership working and to map out the individual partnerships the Council is entering into to;

• Business Case Pro-forma and methodology needs to be developed as a matter of urgency to ensure that best practice is adopted by officers of the Council;

• profile of Capital expenditure needs to be built that informs the Procurement programme over the life cycle of the Councils assets; and

• the Council need to assess the use of Agency staff and urgently consider their options in respect to contracting and procurement in this area.

1.5 Conclusion on the Application of Controls

Based on the evidence obtained from our testing, we have concluded that the application of established controls is not adequate.

We have made no fundamental and one significant recommendations arising from the following:

• Where the aggregated amounts are more than £50,000 over the year officers need to justify why these items have not been considered for tender.




1.6 Other Findings

We have made one recommendation classified as ‘merits attention’. This is detailed in the main report and accompanying action plan.

1.7 Summary:

Recommendations Objective

Fundamental Significant Merits Attention

Compliance with established policies, procedures, laws and regulations

0 4 0

Safeguard the organisation's assets and interests from losses of all kinds

0 1 1

Integrity and reliability of information, accounts and data.

0 4 0

1.8 Additional Information

We have included some comparative data to benchmark the number of recommendations made, as shown in the table below. In the past year we have undertaken a number of audits of a similar nature in the sector.

Level of assurance Percentage of reviews Results of this audit

Substantial Assurance 36.54% -

Adequate Assurance 30.77% -

Limited Assurance 32.69% X

Recommendation categorisation

Average number in similar audits

Number in this audit

Fundamental 0.37 -

Significant 2.94 9

Merits Attention 3.54 1

Total recommendations 6.85 10

The Council have been developing their approach concerning Procurement and from consideration of the previous Audit and the current Audit, it is apparent that the Procurement Officer and Finance Team overall have a lot of work ahead of them if service improvements are to be achieved.

The review has highlighted that Council Officers are still in need of specific training and encouragement to improve Procurement skills in line with the Procurement policy of the Council. In particular, there is a risk that opportunities to improve Value for Money have not been achieved.

West Dorset District Council Procurement Review (07.07/08)


2 Action Plan

The priority of the findings and recommendations are as follows:

Fundamental- action is imperative to ensure that Significant - requires action to avoid exposure to significant Merits Attention - action advised to enhance the objectives for the area under review are met. risks in achieving the objectives for the area under review. control or improve operational efficiency.

Para Recommendation Categorisation Accepted

Y/N

Management comment Implementation date

Manager responsible

1 Strategic procurement plans need to be developed at a departmental level to support the overall procurement function and to enable a better understanding of any inter departmental procurement links. Such plans would clearly identify tender exercises and regularly used contractors where Service Level Agreements (SLA's) or contracts are required.

Significant Y Service Managers to draw up strategic Procurement plans in conjunction with Procurement Officer.

31 March 2010 Service Managers

2 The Corporate Procurement Officer of the Authority needs to map where tenders are coming into the Council and review the arrangements for opening tenders. Where it is found that the persons involved in designing and letting contracts are the same as those who open and award contracts and are not using the corporate approach as outlined in the procedures, then the Department needs to be brought in line with policy.

Significant Y The procedure for opening tenders will be reviewed as recommended to ensure that there is a separation between officers who design and let contracts, and those who open and award contracts.

31 December 2008

Corporate Services Manager



2 Action Plan




Y/N


Manager responsible

3 A decision concerning the use of Car Parking machines needs to be seen as part of the whole solution for dealing with a reduction in cash handling. In particular, any review of the cash collection contract needs to consider how new technology may assist with:

• reducing cash handling;

• alternative methods of collecting car park fees;

• impact on staff work patterns; and

• long term planning as the machines purchased may have a longer life expectancy.

Significant Y Agreed – Need to take a strategic view overall.

31 December 2008

Technical Services Manager

4 A full training programme on the Councils Procurement Process and Procedures needs to be delivered to key officers.

Significant Y Review of training needs of Council officers will be carried and a training programme drawn up for consideration.

In particular, officers involved in procurement and contractor monitoring need to have clear value for money training and updating to ensure that they apply the principles of value for money in their dealings with contractors.

31 March 2009 Finance Manager



2 Action Plan




Y/N


Manager responsible

5 A review as to the way non contract fuel is purchased for the Council needs to be undertaken to ensure that:

• all vehicles are monitored for usage and that mileage can be verified and bona fide;

• the appointed fuel contractors offer best value for money; and

• whether working practices should be amended to use the Depot for fuel as opposed to individual fuel cards.

Significant Y Agreed – To be discussed further with Personnel and Corporate Procurement to ascertain best way forward.

31 December 2008

Service Managers

7 The Council's Senior Management team needs to understand the type and risk associated with partnership working and to map out the individual partnerships the Council is entering into to ensure that suitable Service Level Agreements are in place. This is particularly important in areas where procurement is being undertaken on behalf of third parties and there is a risk of liability.

Significant Y A database of current and potential future partnerships and joint procurement exercises will be drawn up. This will contain a note of the type of joint working, which partners are involved, how costs are split and savings shared, and what risks are faced by the partnership. This database will be used to agree terms with partners, and will form the basis of individual SLAs.

31 December 2008

Director of Corporate Services

8 The Business case pro-forma and methodology needs to be developed as a matter of urgency to ensure that best practice is adopted by officers of the Council.

Significant Y This is in development and will be rolled out in due course.

31 October 2008 Finance Manager



2 Action Plan




Y/N


Manager responsible

9 A profile of Capital expenditure needs to be built that informs the Procurement programme over the life cycle of the Councils assets. This will give the Corporate Procurement Officer a clear understanding of major items that could require procurement over any given period and will allow staff in Finance to profile Capital spending and the resources required to meet that spend.

Merits Attention Y Have some profile at present but needs to be clearly communicated to Procurement Officer.

30 June 2008 Finance Manager

10 Where the aggregated amounts are more than £50,000 over the year officers need to justify why these items have not been considered for tender.

Significant Y A review will be undertaken of expenditure in excess of £50,000 with Council suppliers, to identify areas of spend not currently covered by a formal procurement process. We will then work through the list in order to regularise council expenditure.

31 December 2008

Director of Corporate Resources

11 The Council need to assess the use of Agency staff and urgently consider their options in respect to contracting and procurement in this area. In particular they need to:

• assess whether Agency staff should be put out to EU tender;

• consider whether a sole Agency agreement would be preferable; and

• how the risks associated with Agency staffing should be dealt with in the future.

Significant Y The Council is about to make a decision as to whether or not to join in the agency staff contract let by Dorset County Council.

If the Council does not join the County’s contract, we will look to let an EU compliant tender for the provision of agency staff within the next 12 months.

30 June 2008 Director of Corporate Resources.



3 Findings and Recommendations

The controls (actual and/or missing) column details the actual controls that have been identified as a result of documenting the system and those expected to be in operation, but were missing. The next column is the evaluation of whether or not this control should be effective if operated. Testing of controls has only been undertaken where the control has been evaluated as effective (Y). The implications arising from the evaluation and summary results of tests are shown in the Test Result / Implications column.

1 Objective: Compliance with established policies, procedures, laws and regulations

Controls (actual and/or missing)

Evaluated as effective

(yes/no)

Test Result / Implications Recommendation Categorisation

Risk: Officers are unaware of their duties and responsibilities resulting the risk of non compliance and reputational damage.

1 The Council have adopted a detailed policy in respect of Contract procedures and Procurement Strategy however the interpretation of these procedures and approach has yet to be formally understood or rolled out to the officers of the Council.

No We found that there were various methods of approach undertaken for the procurement of goods and services. In particular, we considered how contracts areas are monitored and whether there was any scope for improving the methodology. We found that:

Car Parks - off contract fuel spend - Normally officers are expected to fill up vehicles with Diesel from the Works Depot. We found that the Car Parks Manager had two off contract fuel cards for staff as the staff provided service at weekends and out of hours when the Depot was closed;

Care and Repair - The appointment of contractors for the Care and Repair service is undertaken by recommendation as opposed to a formal approved list. Basic information is then gathered about the contractor but not full checks as an approved list would require. The reason for this is that they can only suggest the contractor to the client even though they manage the process. Contractor appointment and assessment is similar to the work

Strategic procurement plans need to be developed at a departmental level to support the overall procurement function and to enable a better understanding of any inter departmental procurement links. Such plans would clearly identify tender exercises and regularly used contractors where Service Level Agreements (SLA's) or contracts are required.

Significant






(yes/no)


undertaken by the Council’s Technical Team; and

Information Techonolgy (IT) - We were informed that there is a preference to use specific companies for the provision of PC's, printers and peripherals as there was a need for continuity, guaranteed inter operability and reliability of service. Unfortunately, there is no overall strategic procurement plan linked to the IT strategy Council policy.

The common theme above is that the departments all lacked strategic linked policy concerning procurement. Where Council departments are purchasing specific items they needed to be part of an overall departmental approach to procurement.






(yes/no)


2 Segregation of duties are not clearly understood by officers of the County Council.

No Where a tender document has been prepared by an officer in Care and Repair, the relevant Contractor chosen and then a specification issued we found that the same officers were involved in opening the tender. It is accepted that where small numbers of staff are involved in a tender exercise that the process does not lend itself to clear segregation of duties. The current practices are in breach of:

13.4 All Tenders must be returned to the Director of Corporate Resources marked “Tenders” but must not identify the sender. The date and time of receipt of tenders must be noted on the envelope.

There is a risk that were segregation of duties is difficult that there is an opportunity for fraud or irregularity.

The Corporate Services Manager of the Authority needs to map where tenders are coming into the Council and review the arrangements for opening tenders. Where it is found that the persons involved in designing and letting contracts are the same as those who open and award contracts and are not using the corporate approach as outlined in the procedures, then the Department needs to e brought in line with policy.

Significant






(yes/no)


3 Contractual relationships are not market tested sufficiently to ensure that they are relevant and appropriate. Also the impact of technical advances or new ways of approaching a problem has not been ascertained for impact.

No We reviewed the contract for cash collection at the Council and found that it had been market tested in 2000. The result of the exercise resulted in higher costs and the Car Parks Manager reasonably took the view that the former contract should be renewed maintaining the existing cost structure.

Costs in this area have continued to rise due to the requirement of Group 4 Securicor to meet increased wage costs, fuel cost increases and insurance. The response has been to combat rising costs by preparing a report that considers the Council taking on the cost of counting cash in order to reduce the throughput of money collected. The report has not taken into consideration new technology or the impact of using alternative cash methods such as credit card payment. In Dorchester people have the opportunity of purchasing a long term car park ticket using cash. The use of such tickets is obviously seen as beneficial but is cash intensive. A move away from cash to the use of ticket machines linked to credit or debit cards affects the procurement process for the purchase of new ticket machines. By linking the purchase of new Car Park Ticket Machines, the contract for the collection of cash and the overall strategic approach for the authority may present a different solution to the rising costs.

There is a risk that Council officers are making purchasing decisions in isolation of the overall picture leading to poor economy efficiently and effectiveness.

A decision concerning the use of Car Parking machines needs to be seen as part of the whole solution for dealing with a reduction in cash handling. In particular, any review of the cash collection contract needs to consider how new technology may assist with:

• reducing cash handling;

• alternative methods of collecting car park fees;

• impact on staff work patterns; and

• long term planning as the machines purchased may have a longer life expectancy.

Significant






(yes/no)


Risk: Staff involved with procurement are insufficiently trained leading to poor procurement decisions leading to financial losses.

4 Training of staff and embedding of the procurement policy has yet to be achieved.

No A recommendation of the previous Audit had been that the Procurement Policy and Procedures needed to be clearly embedded and this would be achieved through training. Our discussions with officers of the Council highlighted that:

Car Parking - An understanding of procurement process and procedure was adequate but elements of the approach such as role over contracts needed to be reviewed;

Care and Repair - Had not fully embraced the Contract Procedures;

IT - Need for a Procurement Strategy when buying;

Technical Services - Preparing to go out to tender for Cyclical Maintenance and Responsive Maintenance but without a full business case to back up the approach or a full report to Committee as to the implications of the activity. Note we were informed by management that the full business case and full report to Committee were completed prior to the contract being let.

As highlighted below at paragraph 6, the issues surrounding Value For Money within the Council also need to be addressed.

A full training programme on the Councils Procurement Process and Procedures needs to be delivered to key officers.

In particular, officers involved in procurement and contractor monitoring need to have clear value for money training and updating to ensure that they apply the principles of value for money in their dealings with contractors.

Significant






(yes/no)


Overall, the above points raise questions over capability of staff to excel as opposed to just deliver procurement. There is therefore a continuing risk that procurement practices fall short of best practice to the financial and reputational risk of the Council.

2 Objective: Safeguard the organisation's assets and interests from losses of all kinds



(yes/no)


Risk: Value for money is not obtained from the Procurement process.

5 No monitoring was undertaken by the Car Parks Manager to ensure that staff were not misusing Diesel.

No The Car Parks Officer confirmed that there are no arrangements in place for the monitoring of vehicle diesel usage. The Off Contract Fuel spend through Loaders and Bride Valley Garages is primarily due to staff requiring fuel out of normal hours as they provide a 7 day a week service. The vehicles are not fitted with a tracking device so it is difficult to ascertain whether all usage is business related. Also Car Parks Vehicles are used for the collection of cash and it is therefore a concern that these vehicles could be targeted by criminals raising a Health and Safety Risk. There may be a residual risk that if the Council were to have an H M Revenue & Customs inspection, that they could be deemed to be in breach of private usage with the resultant penalties and interest going back over several years.

A review as to the way non contract fuel is purchased for the Council needs to be undertaken to ensure that:

• all vehicles are monitored for usage and that mileage can be verified and bona fide;

• the appointed fuel contractors offer best value for money; and

• whether working practices should be amended to use the Depot for fuel as opposed to individual fuel cards.

Significant



2 Objective: Safeguard the organisation's assets and interests from losses of all kinds



(yes/no)


6 Value for Money issues in the Council are not understood or applied in a uniform manner.

No Value for money in the contracting and procurement process does not seem to be clearly understood by the officers of the Council. Our testing highlights earlier in the report that checking mechanism to ensure appropriate use of fuel is not in place. Questions concerning how contractors prices where monitored focussed on contact with the supplier, price checking or the fact that it was a five year contract.

There is a danger that the Council does not fully embrace the principles of economy, efficiency and effectiveness in their processes leading to the risk of financial loss.

Covered in training at paragraph 4

Risk: Supplier relationships are developed in an inappropriate manner leading to financial loss and poor levels of service.

7 Service level agreements are not in place for all of the Council's external relationships.

No Discussion with the Care and Repair Team highlighted that they had been given a devolved budget from Magna Housing. Unfortunately, we found that the staff were unaware of any Service Level Agreement between the Council and Magna as to the expectations of both parties.

There is a residual risk that where partnership arrangements exist that the Council could be exposed to financial or reputational issues arising from informal arrangements.

The Council's Senior Management team needs to understand the type and risk associated with partnership working and to map out the individual partnerships the Council is entering into to ensure that suitable Service Level Agreements are in place. This is particularly important in areas where procurement is being undertaken on behalf of third parties and there is a risk of liability.

Significant



3 Objective: Integrity and reliability of information, accounts and data.



(yes/no)


Risk: Poor decision making, due to poor quality or timeliness of information provided to management.

8 Officers do not adequately explore or understand how to obtain best value from the procurement process. Risks and issues have not been clearly outlined to the committee and the officer involved with the procurement process would have left the Council before the Tender process is completed.

No We found that the Property Services Team Leader had embarked on a Tender process that would ultimately lead to the outsourcing of Cyclical Maintenance. The value of the contract overall is between £80,000 and £120,000 and the implications and timescales of the Tender have not been fully explored or highlighted to Council members. Accordingly, there is an issue arising that the officer concerned had not used a clear business case planning methodology. Business case planning for procurement had been raised as an issue in the previous Procurement review and this highlights the need for a clear corporate approach.

It is understood that the Corporate Procurement Officer is in the process of developing a Business Case Pro-forma.

A risk can arise that a tender process in not fully understood leading to financial or reputational risk to the Council.

The Business Case Pro-forma and methodology needs to be developed as a matter of urgency to ensure that best practice is adopted by officers of the Council.

Significant






(yes/no)


9 Provision is not made for the replacement of equipment that is coming to the end of its useful business life.

No We were informed that no provision had been made for the replacement of the 78 coin car parking machines. The expected life expectancy is 10 to 14 years dependent on where they were placed as seafront machines suffered more from corrosion. At present there is a move to replace these machines over a three year period.

Procurement strategies need to have a good profile of the type of items that are likely to be procured so that programmes of procurement can be developed and resources allocated as part of a long term planning process. Where this is not undertaken, there is a danger that the Council will not have a good profile of Procurement in any one year leading to issues over capacity and capability to deliver the programme.

Reputational and financial risk will arise in procurement where the spending activity of the Council is not understood.

A profile of Capital expenditure needs to be built that informs the Procurement programme over the life cycle of the Councils assets. This will give the Corporate Procurement Officer a clear understanding of major items that could require procurement over any given period and will allow staff in Finance to profile Capital spending and the resources required to meet that spend.

Merits Attention






(yes/no)


10 The Contract Register for the Council should contain all Contracting activity and enable appropriate review of individual contracts to ensure that they are managed and tendered in line with their terms and conditions.

Yes A review of the Contract Register compared with a compilation of invoices over £25,000 highlighted that the Council have a number of issues around identifying those areas that need to be put out to contract. As an example, Egbert H Taylor, provide kerbside collection boxed and at the time of the Audit the total spend had been £67,410. According to the information provided the Department purchasing uses "spot purchasing" and therefore does not get involved with a tender procedure but relies heavily on getting the best price that the market can provide. However, as plastics are derived from oil the cost of this commodity is unlikely to go down so a spot purchasing price will only reflect the market at that point and may not always offer best value. Whereas the aggregated amount may mean that firm prices for a year can be agreed leading to appropriate discount structures can be negotiated based on volume.

There is a financial risk to the authority that where officers place too much reliance on spot purchasing that the Council will not Contract for items that could give them cost certainty and just as importantly best value from the process.

Where the aggregated amounts are more than £50,000 over the year officers need to justify why these items have not been considered for tender.

Significant






(yes/no)


11 The placing of contracts for Agency staff is undertaken in a reactive rather than a proactive manner with no indication as to how records are kept concerning the process of gathering quotations.

No From our list of top spend at the time of the Audit £395,788 had been spent on Agency staff from four agencies. This is a considerable budget and although we are aware from our work that certain specialist persons need to be employed from specific companies from time to time, the general spend is still significant. Agency staff is a particular concern for all the Public Sector who have used various methods to overcome skills gaps that have included Staff Bank through to sole Agency agreements and the provider undertaking the work for the in-house team.

There is also a danger that over the period of three to five years the amount of the contract could take the Council over the aggregated amount for European Union rules posing a financial threat to the Council as they could be perceived as being in breach.

There are also benefits to considering aggregation and these are:

• improved information about usage of services;

• greater leverage with the supplier;

• improved pricing structures; and

• market management through transferring risk.

Overall, the risk to the Council still exists through poor supplier management leading to financial loss and breach of legal requirements.

The Council need to assess the use of Agency staff and urgently consider their options in respect to contracting and procurement in this area. In particular they need to:

• assess whether Agency staff should be put out to EU tender;

• consider whether a sole Agency agreement would be preferable; and

• how the risks associated with Agency staffing should be dealt with in the future.

Significant




4 Background

4.1 Outcome of the Previous Audit

Date of last audit: 17 July 2007

Conclusion on the adequacy of controls last time:

Not sufficient

Conclusion on the application of controls last time:

Not sufficient

Overall level of assurance given for the last audit:

Limited

Number of recommendations agreed with Management last time:

• fundamental

• significant

• merits attention

0

14

8

Number of recommendations implemented by Management since last time:

• fundamental

• significant

• merits attention

0

5

2

The officer responsible for Procurement has a detailed work programme and is moving the outstanding recommendations forward within the resources available. The Council should consider whether opportunities for savings and improved procedures are being hampered by the availability of resources to implement audit recommendations to bring about change.

4.2 Objectives and Risks

The audit considered the organisation’s objectives for the area under review and the risks to the achievement of those objectives.

Objectives Risks

Compliance with established policies, procedures, laws and regulations

Officers are unaware of their duties and responsibilities resulting the risk of non compliance and reputational damage.

Staff involved with procurement are insufficiently trained leading to poor procurement decisions leading to financial losses.




Objectives Risks

Safeguard the organisation's assets and interests from losses of all kinds

Value for money is not obtained from the Procurement process.

Supplier relationships are developed in an inappropriate manner leading to financial loss and poor levels of service.

Integrity and reliability of information, accounts and data.

Poor decision making, due to poor quality or timeliness of information provided to management.

4.3 Determination of Audit Approach

In determining the audit approach, we took into account:

• the outcome of the previous audit of this area.

Factors relevant to the selection of the audit approach:

Wide range of audit points raised during the last review of this area.

Audit tool selected: Systematic Audit

Audit approach used: An audit in which every aspect and stage of the audited subject is considered, within the agreed scope of the audit. It includes review of both the design and operation of controls.

The conduct of this audit complied with the standards set in the CIPFA Code of Practice for Internal Audit.

4.4 Acknowledgement

The following staff gave their time and co-operation during the review and we would like to record our thanks:

Name Position

Rosie Darkin Finance Manager

Caroline Bartlett Procurement Officer

Robert Ruthin Agency Manager West Dorset Care & Repair

Paul Foot Technical Officer

Eugene Barnes Car Parks Manager

Gerry O’Connell IT Officer

Internal Audit Report Procurement Review (07.07/08) Dorset District Council Procurement Review...

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