Aberdeen City Council in breach of procurement law

25 April 2019

Aberdeen City Council has broken complex tendering rules by failing to carry out the appropriate procurement exercises on some contracts and failing to properly document others, an internal audit has found.

While for the most part the council’s procurement was fully compliant with all legislation, in some of the 50 contracts examined this was not the case, according to the report by the council’s chief internal auditor David Hughes.

The findings will be discussed at a meeting of the council’s audit, risk and scrutiny committee next week.

One in five of the contracts examined, which represented more than £27m of expenditure in the past four and a half years, had not been placed on the legally required register which requires all contracts worth more than £50,000 for supplies and services, and £2m for works to be published.

A dozen contracts worth more than £20m had been amended to extend either the length or the value of the contract, but details on the register had not been changed.

And the council had also failed to carry out procurement exercises when a contract passed a certain threshold of value on several occasions.

Once contracts pass a certain threshold of value they need to be approved by designated officers or committees.

The report stated that 4 of 50 cases reviewed had “aggregate spend in excess of national or European procurement thresholds” without the proper approval having been given.

Suppliers had not been given specific contracts for tender in these instances, the audit found.

And the auditor also found several cases where spending did not comply with the council’s ‘no purchase order, no payment’ policy.

The audit said that the council had already agreed with the auditor that changes needed to be made to avoid further breaches of regulations.

By this September, individual services should ensure plans are in place to procure goods and services which are anticipated to exceed relevant thresholds under the recommendations, the audit recommended.

The council makes more than £600 million of payments per annum to suppliers, grant funded organisations and individuals through its payments system. A substantial proportion of this spend relates to procurement of goods and services, according to the audit.

Malcolm Harrison, Group CEO, CIPS, told SM: “Incidents such as this highlights the need for professionally qualified procurement teams in place to improve governance and safeguard our organisations against risk.”

He added: “The MCIPS designation provides an assurance of the appropriate level of competence, Chartered Status adds another layer of confidence, as it demonstrates that procurement professionals have the most sought after skills and remain current to meet the challenges today and ahead.”

Aberdeen City Council declined to comment.

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