LGA PROCUREMENT CAPACITY BUILDING STRATEGY FORMULATION WORKSHOP - PowerPoint PPT Presentation

PMO-RALG ENHANCEMENT OF PROCUREMENT CAPACITY OF LOCAL GOVERNMENT AUTHORITIES PROJECT (EPC – LGAP) LGA PROCUREMENT CAPACITY BUILDING STRATEGY FORMULATION WORKSHOP PROCUREMENT COMPLIANCE & PERFORMANCE AS PER THE AUDIT RESULTS Dodoma, 11-13 June 2013 1

OUTLINE OF PRESENTATION  Introduction  Volume of Awarded Contracts in LGAs  Procurement Audit Results and LGA Weaknesses  Value for Money Audit Results and LGA Weaknesses  New Procurement Audit Indicators  Concluding Remarks 2

SITUATION DURING FY 2011/12  122 procuring entities for procurement carried out in FY 2011/12. • 41 MDAs, • 46 PAs, and • 35 35 LGAs.  Special audit to Kinondoni nondoni Mu Municipal cipal Council ouncil and TANROADS – Singida Region 3

CONTRACTS AWARDED BY LOCAL GOVERNMENT AUTHORITIES (FY 2011/12) VOLUME OF AWARDED CONTRACTS BY 106 OUT OF 134 LGAs (TSHS. 395.7 BILLION) NON- DISPOSAL OF CONSULTANCY ASSETS SERVICES 0.10% CONSULTANCY 6.34% SERVICES 2.70% GOODS 24.96% WORKS 65.90% 4

COMPARISON OF CONTRACT VOLUMES OVER TIME (LGA) 300,000 250,000 200,000 Million Tshs. 150,000 100,000 50,000 - Goods Works Consultancy Non-Consultancy Disposal of Assets FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12 5

PROCUREMENT AUDIT COMPLIANCE AND PERFORMANCE INDICATORS (1) Ind. No. Indicator Compliance Data Existence of a tender board in accordance 1. Appropriate establishment and composition of tender with the requirements of the Act and boards Regulations 2. Appropriate establishment Existence of a PMU in accordance with and composition of PMUs the requirements of the Act and Regulations 3. Independence of functions Percentage of tenders in which there was no interference between individual functions 4. Appropriate preparation and Prepared and properly implemented implementation of annual procurement plan procurement plan 5. Complying to compulsory Percentage of tenders/contracts which approvals received all compulsory approvals in various processes 6

PROCUREMENT AUDIT COMPLIANCE AND PERFORMANCE INDICATORS (2) Ind. No. Indicator Compliance Data 6. Appropriate advertisement of Percentage of open bidding procedures bid opportunities publicly advertised 7. Complying with publication Percentage of contract awards disclosed of awards to the public 8. Adequate time for Percentage of tenders complying with the preparation of bids stipulated time in the Act and regulations 9. The use of appropriate Percentage of tenders using authorized methods of procurements methods of procurement in accordance with their limits of application 10. The use of standard tender Percentage of tenders using standard/ documents approved tender documents 11. Proper keeping of Percentage of tenders with complete procurement records records 12. Availability of quality Percentage of tenders with adequate assurance and control systems quality assurance and control systems 13. Appropriate contract Percentage of contracts which have been implementation implemented as per the terms of contract 7

GENERAL PERFORMANCE ASSESSMENT CRITERIA  Good od performance: ≥ 80 percent  Fai air performance: > 60 percent but < 80 percent  Poor performance: ≤ 60 percent  NO NOTE TE  The average per PE is calculated from the scores achieved in each of the 13 indicators.  The indicators carry equal weight 8

CHALLENGE: STAGNATING PERFORMANCE 9

Audit Results 2011/12 100 90 85 90 82 81 80 78 74 74 80 71 65 70 63 58 55 60 SCORES (%) 50 40 30 20 10 0 1 2 3 4 5 6 7 8 9 10 11 12 13 COMPLIANCE INDICATORS

90 83 77 80 74 73 72 71 68 68 70 63 60 55 60 54 SCORES (%) 47 50 40 30 20 10 0 1 2 3 4 5 6 7 8 9 10 11 12 13 COMPLIANCE INDICATORS 14 PEs (40%) – Poor Performance; 16 PEs (46%) – Fair Performance; 5 PEs (14%) – Good Performance Hai District Council – 86% Mbozi District Council – 53%

100 90 80 70 60 SCORES (%) 50 40 30 20 10 0 1 2 3 4 5 6 7 8 9 10 11 12 13 COMPLIANCE INDICATORS OVERALL MDAs PAs LGAs

ESTAB ABLIS LISHMENT HMENT AND ND COMPOSITION POSITION OF F TEND NDER ER BOARD ARD  Average level of compliance: 74 percent  9 out of 35 audited LGAs: unsatisfactory performance in this indicator  Weaknesses:  Failure to inform PPRA on the composition of TB and the qualification of its members pursuant to Section 29(1) of PPA 2004;  Tender board members have limited knowledge on application of PPA and its Regulations. 13

ESTAB ABLIS LISHMENT HMENT AND ND COMPOSITION POSITION OF F PMU MU  Average level of compliance: 63 percent  18 out of 35 PEs (51%): unsatisfactory performance in this indicator  Weaknesses:  PMU established as a committee rather than a fully fledged and staffed unit;  Limited knowledge on application of PPA and Regulations;  Staff of PMU lack the necessary qualifications;  Inadequate office space and working tools. 14

Major r Weaknesse sses Inappr ppropriat priate e establi ablishment shment of Procuremen ement t Managemen agement t Un Units ts 100% 90% 80% 78% 80% 74% AVERAGE COMPLIANCE 70% 63% 60% 50% 40% 30% 20% 10% 0% MDAs PAs LGAs OVERALL Series1 78% 80% 63% 74%

ANN NNUAL AL PROCU CUREMENT REMENT PLA LAN  Average level of compliance: 47 percent  26 out of the 35 audited (74%) had unsatisfactory performance, 9 PEs scored 20 percent and less;  Weaknesses:  Not using appropriate APP template;  Incorrect tender numbering and referencing;  APP hardly followed during implementation;  TB meetings not properly planned;  Requirements not properly aggregated;  Tender processing times not properly allocated. 16

Major r Weaknesse sses Inappr ppropriat priate e preparat atio ion n of annual al procureme urement nt plans 100% 90% 80% AVERAGE COMPLIANCE 68% 70% 58% 57% 60% 47% 50% 40% 30% 20% 10% 0% MDAs PAs LGAs OVERALL Series1 68% 57% 47% 58%

PUBLI BLICATION TION OF F CONT NTRA RACT CT AWARDS ARDS  Average level of compliance: 60 percent;  17 out of the 35 audited (49%) had unsatisfactory performance, 5 PEs scored 0 (zero) percent in this indicator.  Weaknesses:  Failure to disclose to the public (newspapers, notice boards) the awarded contracts;  Sometimes unsuccessful bidders are not notified;  Failure to notify PPRA; 18

Major r Weaknesse sses Failure ure to publish ish contract tract awards 100% 90% 80% AVERAGE COMPLIANCE 68% 65% 65% 70% 60% 60% 50% 40% 30% 20% 10% 0% MDAs PAs LGAs OVERALL Series1 65% 68% 60% 65%

KEEPI PING NG OF F PROCUREM CUREMENT ENT RECORDS RDS (1 (1)  Average level of compliance: 54 percent  22 out of the 35 audited (63%) had unsatisfactory performance, 16 PEs scored below 50 percent;  Weaknesses:  Lack of a comprehensive list of records for all tenders managed by PMU;  Tender records had not been systematically filed, but scattered in many different files, audit trail made difficult;  Failure to maintain a register of all awarded contracts; 20

KEEPI PING NG OF F PROCUREM CUREMENT ENT RECORDS RDS (2 (2)  Weaknesses:  Project files miss:  Annual Procurement Plan (APP) or General Procurement Notice (GPN)  Tender Board approval for draft advert and bidding document  Bids submitted by bidders  Minutes of tender opening: Tender Opening Register, read out prices, tender opening checklist, etc  Letters of appointment of evaluation committee  Signed personal covenants forms for TB as per Section 86(6) and Reg. 101(6) of GN No.97,  Negotiation plan  Names and appointment of negotiation team  Handing over report  Progress Reports;  Final certificates;  Inspection and Acceptance Reports.  Drawings  Complaints register  Claim management and  Payment records. 21

Major r Weaknesse sses Poor Recor ords ds Keeping ng 100% 90% 80% AVERAGE COMPLIANCE 68% 66% 70% 63% 60% 54% 50% 40% 30% 20% 10% 0% MDAs PAs LGAs OVERALL Series1 68% 66% 54% 63%

CONT NTRA RACT CT MANA NAGEMENT GEMENT (1 (1)  Average level of compliance: 55 percent on Quality Cotrol and 68 percent on Contract Management  25 out of the 35 audited (71%) had unsatisfactory performance, 9 PEs scored 20 percent and less;  Weaknesses:  Inspection and acceptance committees not appointed;  No quality assurance plan for works, consultancy and non- consultancy services;  Lack of supervision of consultancy services;  Interim and contractual certificates not issued properly;  Variation orders issued without following proper procedures;  Extension of time granted without justifiable reasons;  Most of the payments to service providers not made on time; and  Payments for work not undertaken or substandard work. 23

Major r Weaknesse sses Weak contracts tracts management gement 100% 90% AVERAGE COMPLIANCE LEVEL 74% 80% 72% 71% 68% 70% 56% 55% 55% 55% 60% 50% 40% 30% 20% 10% 0% MDAs PAs LGAs OVERALL Quality Contr 56% 55% 55% 55% Contracts Man. 72% 74% 68% 71%

VALUE FOR MONEY AUDITS Total: tal: 137 Contrac tracts ts for Mainly inly Bu Buildings ldings and nd Roads ads 25