SAO audited the Central Purchasing Project
Press Release – November 4, 2013
The aim of the Central Purchasing Project was to make the system of public purchases more effective and simpler as well as to reduce the costs. The auditors focused on the implementation of the system of central purchasing and on the assessment of the shown benefits. In details, the auditors scrutinized purchases of three commodities within the period from 2008 to 2012, namely fuel, electric energy, and xerographic paper.
The Ministry of Interior reported that purchases made through the system of central purchases amounted to CZK 1,874 million and declared that savings in the amount of CZK 475.9 million had been made.
The SAO warned that positive outcomes of the Central Purchasing Project and the system of central ordering were negatively influenced by following factors:
- Poor quality of data about purchased commodities made problems during the evaluation of offers.
- Objective market prices could not be ascertained in the real situation.
- An effective control system was not ensured.
- A monopolistic supplier was usually established.
The Ministry uses its own information system to monitor the reduction of costs. However, the data included in the information system are not very reliable. Errors were found in the input data, which questioned the savings shown. The savings were also misinterpreted because the prices were compared without checking the objective market prices.
Among other factors, which negatively influenced the effectiveness of the project´s implementation, were following facts:
- The Ministry failed to separate the teams, which performed the realization and the assessment of the Project´s implementation.
- During the period, funds were spent on reserve fuel purchases by the end of the calendar year but the reserves were not stored in the Ministry´s disposal sites.
- Significant errors were made when estimating the amounts of commodities to purchase - in some cases the amounts were overestimated by more than 80 %.
- Offers with unit prices, which were higher than those described in the framework agreements, were accepted. Supplies out of keeping with implementing agreements were also accepted.
- In some cases the ordering parties proceeded in ways, which did not improve the transparency of public work procurements.
The financial authorities in charge were informed about the insufficiencies, which the SAO considered to be serious violations of the budgetary regulations.
For further details about auditing operation No. 12/29 (in Czech only), see the following link: http://www.nku.cz/assets/media/informace-12-29.pdf (420 kB).
Communication Department
Supreme Audit Office