The flaws in the government procurement system have once again been highlighted by the Annual Audit Report 2020-2021 of the Royal Audit Authority (RAA).
The finding that the government’s procurement system is plagued with irregularities is nothing new. Many past Annual Audit reports of the RAA have been publishing such irregularities year after year, but little is done to address or curb the problem altogether.
The Annual Audit Report 2020-2021 this time shows that irregularities incurred due to non-compliance of procurement norms were over Nu 1.9bn.
Further, as per the report, government procurement constituted 40% of the government expenditures, meaning in the last five years, more than Nu 111bn was spent on procuring goods and services.
The flaws in the government procurement system, many say, are also because of the Procurement Rules and Regulations 2019, which even the RAA has recommended the finance ministry to revise. Because of the practice of awarding contracts to lowest bidders, the procurement culture, it is said, emphasizes more on quantity than on quality. If there is a revision in the government procurement system that is necessary today, we must do it and right the wrongs accordingly.
Another interesting observation pointed out by the RAA is that the lowest evaluated bidders’ bids were higher than the market price. If that was the case, how can they be considered as the lowest bidders and based on what rationale where they awarded the bids?
This is best explained by some of those in the procurement business and disgruntled by the procurement system, who say that most government agencies float quotation just for the sake of completing formalities, while the actual work or order would have already been given to someone else. The other bidders are made to bid so as to avoid any audit objections.
Another important audit observation is that agencies are seen accepting poor quality products, making excess payment, and goods are sometimes either not used or remain under-utilized, resulting in the wastage of funds.
However, the wastage of funds, like the case of the National Referral Hospital installing a chiller plant costing Nu 27.6mn (which was not functional) and later selling it at a scrap value of Nu 240,000, is something that is unacceptable and cannot be tolerated.
As a small country with a small economy and heavily dependent on donors’ aid, we cannot have the luxury to waste funds in that way. Imagine what could have been done with that amount for the benefits of the patients and the hospital if the money was used judiciously.
More than anything, the irregularities that are coming up year after year is an indication of the failure of accountability. So until we don’t hold agencies and individuals accountable and fix accountability, such things will only continue.