PAC Meeting | Feb 5, 2015
[Extract]
Chairman (Deputy John McGuinness): No. 4.2 relates to St. Patrick's College in Drumcondra....
Deputy John Deasy: The note mentions non-compliance with public procurement contracts. Can the Comptroller and Auditor General give members an idea of the kind of non-compliance that occurred and how much was involved?
Comptroller and Auditor General, Mr. Seamus McCarthy: We looked at a number of contracts or procurements in the year and found procurement totalling approximately €1.6 million that had not been subjected to competitive tendering. It included things like cleaning and catering services, gas and electricity supply and electrical services.
Deputy John Deasy: That is a lot of money and is a wholesale ignoring of procurement policy.
Seamus McCarthy: Of procurement rules.
Deputy John Deasy: Has the Comptroller and Auditor General seen anything as bad as that?
Seamus McCarthy: We certainly have found difficulties regarding procurement in other colleges. The Deputy may recall that when the National College of Art and Design appeared before the committee, what we found there was almost complete non-competitive tendering for services and goods.
However, there have been other colleges over the years to whose attention we have been drawing in management letters the fact they were not compliant. We also have drawn attention in the audit opinion where a significant level of procurement is not tendered competitively.
Deputy John Deasy: I seem to remember a couple of colleges being the same way. Outside of the scrutiny the Comptroller and Auditor General gives in this regard, is it really the responsibility of the Department to enforce procurement policies? Who governs this area?
Seamus McCarthy: The code of governance requires the chairman of the governing body of each institution to confirm it is compliant. In a situation in which a college is not compliant, it would be obliged to explain why it is not compliant and what steps it is taking to rectify the situation. In effect, that is what we have been pushing with the colleges. Those compliance statements are submitted to the Higher Education Authority.
Deputy John Deasy: Can the Comptroller and Auditor General give members an indication of the general tenor of the response as to why the public procurement policies were not followed, as the practice was so widespread?
Seamus McCarthy: In general, the procurement process is time-consuming. It is expensive and there are many steps through which one must go. It may be a matter of convenience that a contract that is in place is rolled over for a transitional period. There could be things like a sole supplier where the institution is only able to identify one supplier of a particular product.
Deputy John Deasy: The Comptroller and Auditor General is saying there is a problem in this area in this sector. It is not just this college but across the board, in organisations and entities like this, that the guidelines are being disregarded.
Seamus McCarthy: I think the performance is variable. Some colleges have a quite professional procurement service and are procuring competitively on a routine basis. In other cases, perhaps for individual reasons in individual contracts, there may be a legitimate or an acceptable reason for rolling it over.
However, where there is non-competitive procurement, it exposes a college or a public body to the risk of a case being taken against it by a bidder or potential bidder who might have wished to submit a tender for a service not being allowed to so do. There is of course also the problem that the college or public body may not be getting good value in the procurement.
Chairman: In this case, would the head of the board be obliged to sign off even though it had not gone through the proper channels?
Seamus McCarthy: The chairman of the governing body is required to confirm to the HEA each year that it has adhered to proper public procurement procedures. If that has not been done, then the obligation would be on the governing body not to confirm that it had complied but to explain that it had not, as well as to explain why it had not and what it was doing to remedy the situation.
Deputy John Deasy: What happened in this case?
Seamus McCarthy: Offhand, I cannot say.
Chairman: Can the committee write again to the HEA in respect of this matter to ask how many colleges nationwide have followed this procedure? Would this be an easy way to do it?
Seamus McCarthy: It probably also is something at which we will look in looking at HEA oversight of bodies, namely, whether it is getting the declarations and whether it is following up on them where there is apparent non-compliance.
[Extract]
Chairman (Deputy John McGuinness): No. 4.2 relates to St. Patrick's College in Drumcondra....
Deputy John Deasy: The note mentions non-compliance with public procurement contracts. Can the Comptroller and Auditor General give members an idea of the kind of non-compliance that occurred and how much was involved?
Comptroller and Auditor General, Mr. Seamus McCarthy: We looked at a number of contracts or procurements in the year and found procurement totalling approximately €1.6 million that had not been subjected to competitive tendering. It included things like cleaning and catering services, gas and electricity supply and electrical services.
Deputy John Deasy: That is a lot of money and is a wholesale ignoring of procurement policy.
Seamus McCarthy: Of procurement rules.
Deputy John Deasy: Has the Comptroller and Auditor General seen anything as bad as that?
Seamus McCarthy: We certainly have found difficulties regarding procurement in other colleges. The Deputy may recall that when the National College of Art and Design appeared before the committee, what we found there was almost complete non-competitive tendering for services and goods.
However, there have been other colleges over the years to whose attention we have been drawing in management letters the fact they were not compliant. We also have drawn attention in the audit opinion where a significant level of procurement is not tendered competitively.
Deputy John Deasy: I seem to remember a couple of colleges being the same way. Outside of the scrutiny the Comptroller and Auditor General gives in this regard, is it really the responsibility of the Department to enforce procurement policies? Who governs this area?
Seamus McCarthy: The code of governance requires the chairman of the governing body of each institution to confirm it is compliant. In a situation in which a college is not compliant, it would be obliged to explain why it is not compliant and what steps it is taking to rectify the situation. In effect, that is what we have been pushing with the colleges. Those compliance statements are submitted to the Higher Education Authority.
Deputy John Deasy: Can the Comptroller and Auditor General give members an indication of the general tenor of the response as to why the public procurement policies were not followed, as the practice was so widespread?
Seamus McCarthy: In general, the procurement process is time-consuming. It is expensive and there are many steps through which one must go. It may be a matter of convenience that a contract that is in place is rolled over for a transitional period. There could be things like a sole supplier where the institution is only able to identify one supplier of a particular product.
Deputy John Deasy: The Comptroller and Auditor General is saying there is a problem in this area in this sector. It is not just this college but across the board, in organisations and entities like this, that the guidelines are being disregarded.
Seamus McCarthy: I think the performance is variable. Some colleges have a quite professional procurement service and are procuring competitively on a routine basis. In other cases, perhaps for individual reasons in individual contracts, there may be a legitimate or an acceptable reason for rolling it over.
However, where there is non-competitive procurement, it exposes a college or a public body to the risk of a case being taken against it by a bidder or potential bidder who might have wished to submit a tender for a service not being allowed to so do. There is of course also the problem that the college or public body may not be getting good value in the procurement.
Chairman: In this case, would the head of the board be obliged to sign off even though it had not gone through the proper channels?
Seamus McCarthy: The chairman of the governing body is required to confirm to the HEA each year that it has adhered to proper public procurement procedures. If that has not been done, then the obligation would be on the governing body not to confirm that it had complied but to explain that it had not, as well as to explain why it had not and what it was doing to remedy the situation.
Deputy John Deasy: What happened in this case?
Seamus McCarthy: Offhand, I cannot say.
Chairman: Can the committee write again to the HEA in respect of this matter to ask how many colleges nationwide have followed this procedure? Would this be an easy way to do it?
Seamus McCarthy: It probably also is something at which we will look in looking at HEA oversight of bodies, namely, whether it is getting the declarations and whether it is following up on them where there is apparent non-compliance.
