PROCUREMENT REVIEW WORKSHOP

Introduction by XXXXXX 1

Why organize a Procurement Review Workshop ? Compliance Report. Other Procurement Review reports. Daily experience of ODPP. Your experience in the day-to-day handling of procurement problems. 2

Other Training Courses Organized by ODPP and MCC. Management Awareness Workshops. Internal Procurement Committee Trainings. Private Sector Sensitization Workshops. Civil Society Sensitization Workshops. Advanced Topics Workshops: Bid Documents and Technical Specifications. Evaluation Criteria and Methods. Contract Administration and Record Management. 3

Practical Arrangements. 4

Schedule. 9.00 – 10.30 10.30 – 11.00 Coffee break 11.00 – 12.30 12.30 – 13.30 Lunch break 13.30 – 15.00 15.00 – 15.30 Coffee break 15.30 – 17.00 5

Practical Arrangements. Handouts: All slides. All examples and cases. Checklists. Summaries. 6

Practical Arrangements. Please Please, please, please DO NOT FORGET to switch it back ON during the break!!! DO NOT FORGET to switch it back ON during the break! 7

Trainer will ask what the expectations of the participants are for the 2 days. Topics will be noted and a slide prepared, which can be shown at the end of the training to see whether expectations have been met. 8

9 Are your expectations in line with what has been prepared ? Let’s see : 9

Program. B. The review. C. Indicators of malpractice. A. Introduction. B. The review. C. Indicators of malpractice. D. Findings and evidence. E. Physical inspections. F. The report. G. The profile of an auditor. H. Preventing corruption. This schedule is the main structure, we can deviate from it if there are special interests. 10

What is a procurement review ? Objectives. Some facts and figures. A. Introduction. What is a procurement review ? Objectives. Some facts and figures. Definitions. The procurement Cycle. Principles in procurement. This schedule is the main structure, we can deviate from it if there are special interests. 11

1. What is a Procurement Review? Review: ( = Audit ) To look over, study, or examine again. To consider retrospectively; look back on. To examine with an eye for criticism or correction. To write or give a critical report on. To subject to a formal inspection. Retrospectively: a review can only be done after the work has been done. POST REVIEW: After the contract has been signed and even executed. PRIOR REVIEW: Before the contract is awarded or even after defined parts of the process. Auditors will work most of the time on POST reviews. Prior reviews are conducted by ODPP and/or IFIs. Criticism or correction: criticism AND correction.=> Criticism is OK and needed, but for Post Reviews, it’s after the fact => too late. Main goal of reviews should be correction. Critical Report: As information to the stakeholders (Government, MoF, PEs, ODPP, …), but also as a training tool! Formal Inspection: fiduciary obligation.

2. Objectives of a Procurement Review. Provide an expert opinion on: The adequacy of procurement procedures followed. The control system being used. The compliance with the PPA, PPR and/or Loan Agreements of IFIs. The performance of the PE as well as the controlling bodies. Assurance of fiduciary compliance. Identification of areas of improvement and recommendations.

3. Some facts and figures. Budget statement MoF 2003-2004: 75% of the budget is spent on procurement of goods and services. K 36.01 billion domestic revenue. K 23.45 billion grants. Total expenditures = K 59.97 billion Health expenditure on drugs: $1.25 per capita. O O O O Loss of funds due to malpractice estimated at 30% 30%: Source Mustafa Hussein – Combating Corruption in Malawi – African Security Review Vol 14 N°4, 2005.

Dark Green = 90 – 100 % control. Orange = 40 - 50

Evolution 98 - 2008

Malawi doesn’t score very good (less than the average of 52 countries) for: Procurement Supreme audit institution. Business Licensing & Registration. Anti Corruption Agency. Anti corruption law (average) It’s better for: National ombudsman. Whistle blowing measures.

4. Definitions.

Malpractice = Improper, unethical, illegal or negligent conduct or practice. Corruption. Fraud. Bribery. Collusion. Not applying or bending the rules. Negligence.

Unethical ≠ necessarily illegal …? Unethical ≠ necessarily illegal … Ethics Unethical ≠ necessarily illegal …? Kevin Carter’s Pulitzer Price winning photo, 1994. Unethical ≠ necessarily illegal, but is still malpractice. Example: when you need a small town car, buying a fancy 4 wheel drive car with leather seats is not illegal, but unethical and a waste of money. How can you explain to people that there is no money for buying the drugs they need, if you’re driving a $60,000 car and buying a new one every 3 years? Unethical ≠ necessarily illegal …