The Importance of the audit of purchasing and public procurement within a contracting entity

Procurement and contract management represent a crucial part of the activities of contracting entities. These processes have a direct influence on economic performance and the quality of the services provided. Regular audits of procurement and contracting are essential to ensure transparency, efficiency and regulatory compliance. This article explores the importance of carrying out audits in this area.​

Ensuring regulatory compliance​

Contracting entities have to comply with a multitude of local, national and European laws and regulations relating to purchasing and public contracts. An audit verifies that all procedures comply with these legal frameworks, thereby reducing the risk of sanctions or litigation. The audit also identifies areas of risk where current practices may not be fully compliant, allowing corrective action to be taken.​

Improving transparency and accountability​

The audit of procurement and public contracts promotes transparency by providing a clear and detailed view of processes and transactions. It ensures that all purchasing activities are documented and justified. This transparency reinforces the responsibility of stakeholders and helps to build trust with suppliers, partners and the public.​

Optimising costs and resources​

The audit may reveal inefficiencies in the purchasing process, such as duplication, excessive lead times or non-performing suppliers. By identifying these weaknesses, the audit helps the contracting entity to optimise the use of its resources, reduce costs and improve delivery times. This leads to better allocation of budgets and substantial savings.​

Detecting and preventing fraud and corruption​

Audits play a crucial role in detecting and preventing fraud and corruption. By examining transactions and processes, auditors can identify anomalies or suspicious practices. Enhanced controls and audit recommendations can help put in place mechanisms to prevent future fraudulent acts.​

Improving the quality of suppliers and products​

The audit also makes it possible to assess the performance of suppliers and the quality of the products or services supplied. By identifying suppliers who do not meet the required standards, the contracting entity can take steps to improve the quality of its purchases. This may include renegotiating contracts, exploring new partnerships or improving supplier selection criteria.​

Facilitating strategic decision-making​

The results of the audit provide valuable data for strategic decision-making. By better understanding the strengths and weaknesses of purchasing processes, managers can develop more effective strategies that are aligned with the entity's long-term objectives. Regular audits also enable these strategies to be adapted in line with changes in the market and internal needs.​

Strengthening governance​

A well-conducted audit strengthens the governance of the contracting entity. It ensures that procurement processes are aligned with organisational objectives and industry best practice. Strengthened governance leads to more efficient management and improved stakeholder satisfaction.​

Conclusion

Procurement and contract auditing is an essential tool for contracting entities seeking to improve performance, ensure compliance and enhance transparency. By adopting regular and rigorous audits, these entities can not only optimise their resources and prevent fraud, but also make informed strategic decisions and improve overall governance. In an increasingly complex and regulated environment, auditing is an essential practice for any entity wishing to excel in the management of its procurement and public contracts.​