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

2. University of Birmingham
6,600 Staff
31,000 Students

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

4. (1) The University Procurement Operation

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

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

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

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

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

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%

11. 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%

12. 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%

13. 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%

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

15. Spend Profile
Non Pay
Pay

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

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

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

19. 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

20. 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

21. The Top Table Argument
Procurement
27% to 43%

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

23. Supplier Awards

24. (2) My Audit Experiences (good and bad)

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

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

27. 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

28. 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

29. Key Observations

30. Key Observations
Over-auditing

31. Key Observations
Over-auditing
Guilty until proven innocent

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

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

34. Common Procurement Problems
Requisitions or orders without a correct contract

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

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

37. 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

38. 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

39. 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

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