A view from the other side – what is it like to be audited? Jonathan Jones  FCIPS Director of Procurement and Insurance University of Birmingham

University of Birmingham 6,600 Staff 31,000 Students

The view from the other side (1) The University Procurement Operation (2) My Audit Experiences (good and bad)

(1) The University Procurement Operation

University Spend Profile University Annual Turnover £641,000,000 100%

University Spend Profile University Annual Turnover £641,000,000 100% Pay £362,900,000 57%

University Spend Profile University Annual Turnover £641,000,000 100% Pay £362,900,000 57% Non Pay £278,100,000 43%

University Spend Profile University Annual Turnover £641,000,000 100% Pay £362,900,000 57% Non Pay £278,100,000 43% Our Zone!

Of the 43% Non Pay £278,100,000 43% Payments to other institutions £65,100,000 10%

Of the 43% Non Pay £278,100,000 43% Payments to other institutions £65,100,000 10% Procurement outside procurement £15,800,000 2%

Of the 43% Non Pay £278,100,000 43% Payments to other institutions £65,100,000 10% Procurement outside procurement £15,800,000 2% Spend on purchasing cards £5,900,000 1%

Of the 43% Non Pay £278,100,000 43% Payments to other institutions £65,100,000 10% Procurement outside procurement £15,800,000 2% Spend on purchasing cards £5,900,000 1% Spends below £25,000 £16,400,000 3%

Of the 43% Non Pay £278,100,000 43% Payments to other institutions £65,100,000 10% Procurement outside procurement £15,800,000 2% Spend on purchasing cards £5,900,000 1% Spends below £25,000 £16,400,000 3% Procurement Impact Spend £174,900,000 27%

Of the 27% Procurement Impact Spend £174,900,000 27% Direct Procurement Control £161,300,000 25%

Spend Profile Non Pay Pay

The Annual Cost of Procurement Procurement Operations = £4,225,000

The Annual Cost of Procurement Procurement Operations = £4,225,000 421 staff spend more than 10% of time on it

The Annual Cost of Procurement Procurement Operations = £4,225,000 421 staff spend more than 10% of time on it 125 FTE equivalent

The Annual Cost of Procurement Procurement Operations = £4,225,000 421 staff spend more than 10% of time on it 125 FTE equivalent 200 procurements at any given time

The Annual Cost of Procurement Procurement Operations = £4,225,000 421 staff spend more than 10% of time on it 125 FTE equivalent 200 procurements at any given time 27,694 orders raised across the campus annually

The Top Table Argument Procurement 27% to 43%

Procurement Challenges Meeting the demand Due process and EU Directives compliance Sustainable procurement Enough resources Maverick spend Savings targets Performance management

Supplier Awards

(2) My Audit Experiences (good and bad)

What is it like to be audited? NHS Orders raised and correct documentation Spending of Endowment Funds (equipment) Stock control accuracy

What is it like to be audited? Birmingham City Council Savings delivery assessment Stores annual stock take Fraud issues / supplier set-up

What is it like to be audited? Wolverhampton City Council Forced re-tendering (award criteria) Pre-approval of suppliers Contract compliance (DSO overspends) Audit Committee extracted payments

What is it like to be audited? University of Birmingham Two audits for the price of one ! Purchasing card procedure update College order raising weaknesses

Key Observations

Key Observations Over-auditing

Key Observations Over-auditing Guilty until proven innocent

Key Observations Over-auditing Guilty until proven innocent Solutions offered too “process driven”

Key Observations Over-auditing Guilty until proven innocent Solutions offered too “process driven” Work towards a coordinated solutions approach

Common Procurement Problems Requisitions or orders without a correct contract

Common Procurement Problems Requisitions or orders without a correct contract Orders raised incorrectly against a contract

Common Procurement Problems Requisitions or orders without a correct contract Orders raised incorrectly against a contract Suppliers being added to the system

Common Procurement Problems Requisitions or orders without a correct contract Orders raised incorrectly against a contract Suppliers being added to the system Savings identified not transferring to budgets

Common Procurement Problems Requisitions or orders without a correct contract Orders raised incorrectly against a contract Suppliers being added to the system Savings identified not transferring to budgets Tendering weaknesses

Common Procurement Problems Requisitions or orders without a correct contract Orders raised incorrectly against a contract Suppliers being added to the system Savings identified not transferring to budgets Tendering weaknesses Contract award weaknesses

Thank You j.jones.3@bham.ac.uk