The main audit objective is to ensure that the procurement of goods and services including public works achieves its goals and is in compliance with relevant law and regulations. In addition, it needs to be transparent, freely competitive and worthwhile.
The auditing public procurement (purchase, hire, rent, etc.) consists of three main phases as following:
Audit of the procurement plan
Audit of tendering and awarding processes
Audit of contract management
In the first phase (Procurement Plan), the auditor will review procurement plan which auditees have to make up under the Notification of State Audit Commission about preparation of the procurement plan of audited entities. The objective of this notification is to enhance the good governance in the procurement system of audited entities. The notification determines that all audited entities have to prepare the procurement plan and submit to SAI. The main content of the procurement plan consist of procuring items, value of good & services and public works (more than 100,000 Bath for goods & services and 2 million Bath for land purchasing & public works), selecting procurement method, expected month of bidding announcement, expected month of signing contract, and expected payment plan.
Under this notification, the auditor will receive the procurement plan during the first month of fiscal year which in Thailand commenced on October. Therefore, the auditor can review the procurement needs from procurement plan of audited entities. In particular, the important projects like Mega Project must be appeared in the procurement plan. With this information, the auditor can prepare the audit plan for the next phase.
In the second phase (Tendering and Awarding Processes), SAI will examine the accuracy of the tendering and awarding processes. In this phase, SAI plays the key role obviously especially enhancing transparency and accountability. According to Government Procurement and Supplies Management Act B.E. 2560 and related regulations, it determines that procuring agency has to advertise its procurement in the website: www.gprocurement.go.th, and notify to SAI. Additionally, it stated that all government agencies have to submit copy of contract which valued more than 1 million Baht to SAI within 30 days after signed contract. Therefore, the audit mandate of SAI is existed in the public procurement regulation which allows SAI to carry out a procurement audit under transparency and accountability of tendering and awarding processes.
Generally, the auditor will examine all documents in procurement procedures. Initially, the auditor will check main processes as followings:
The identification of needs should be clarified in the request of procurement report of procuring agency. In particular, obvious specification of procuring items should be broad and open for competition.
The bidding documents should clearly define the bid evaluation criteria. Also adequate publicity and period of time allow for the prospective bidders to respond.
The bidding documents should obviously describe in form in accordance with the standard bidding documents.
The bidding documents have to be accurately and clearly about the scope of work, location, procuring items, date, time, working plan and schedule of delivery and installation.
Bidding process must be disclosure to the public under the concept of transparency, fairness, non-discrimination, and competitive procurement market.
The estimated cost should be accuracy fairness and reasonable.
The evaluation committee must be qualified and does not include anyone with a personal interest in the contract. In other words, the auditor will examine the con?¬‚ict of interest behavior in public procurement.
The criteria and methodology for selection of awarding bidder should be accordance with the bidding documents.
The decisions and reasons of all evaluation committees have to be recorded and could notify to the third persons clearly.
Terms and conditions of contract have to be the same in the invitation bidding stage.
For the third phase (contract management), it is the audit of contract management which the main objective is to examine the execution of public procurement contract. Further, the auditor could review the delivery time of supply of goods, equipment, and public works construction which should be completed within the time of contract and also the extension of contract period. Likewise, in case of price adjustment contract the auditor should also review the audit of the payment of the escalation sum.