Simple ways to improve procurement practices

Written by Consulting Services, Procurement Office and Probity and Assurance Office

The recent findings from the Queensland Audit Office’s ‘Local government, Report 8: 2023-24’ financial audit report show there are still many areas that councils can improve on when it comes to procurement practices and processes.

When implemented, many of the recommendations in the report will assist your council to streamline processes, help reduce risk, comply with relevant legislation and council policies, and improve efficiency.

These recommendations seem simple on paper but often take time and resources by skilled professionals in dedicated areas to ensure implementation is suitable and relevant and adheres to relevant regulations, legislation, and council policy.

Peak’s team of highly experienced and proficient procurement and probity advisors are some of the most experienced, credentialed, and capable in Queensland. We are here to assist your council with implementing the recommendations outlined in the recent QAO local government report should a gap be identified within your council. Our team is well positioned to support your council in all areas of procurement, probity and assurance, with a discrete scope of works or through back office support by, retaining our staff for long term support of your procurement function.

Here are some simple ways to improve your procurement practices within council in relation to the recommendations outlined in the QAO LG report:

1. Implement and regularly review policies and procedures

QAO finding: “Councils should regularly review and update their policies and procedures to ensure they are up to date and meet the needs of their operations. Each council should develop a work plan to ensure all policies are reviewed at least every 3 years or when there are significant changes to the council’s structure.”

Councils are custodians of public money and must ensure all procurement processes are conducted in accordance with procurement policy, good financial and contract management practices and openly and transparently. Failing to ensure adequate internal controls in the procurement and contract management processes and practices, not only exposes council to financial risk, but also the risk of fraud and corruption.

Implementation and regular review of policies and procedures are vital actions for keeping important guiding documentation relevant and front of mind across the council.

We can assist your council to develop new policies and procedures, or to review your policy and procedure(s), and can provide support to increase council’s awareness of and adherence to these documents.

2. Set up an audit function inside council

QAO finding: “More action is needed on outstanding high-risk issues. There are still 121 unresolved significant (high-risk) issues (2022: 114) at councils. This will increase as we finalise the audits of the 14 councils who failed to meet the statutory deadline. We continue to see a greater proportion of long-outstanding issues in councils that do not have an audit committee or internal audit function.”

Determining compliance with policies and procedures is one thing. Monitoring and assessing ongoing compliance and the quality of internal controls is another. Evaluating the quality of risk management in procurement regularly through an audit function gives new meaning to active risk and governance management. Implementing an audit function is straight forward and really effective in actively managing procurement and related risks.

We can support the establishment of an audit function, and our team can be retained to perform activities under this function as a trusted advisor or simply engaged to upskill your staff in these areas. Our flexible and agile team can craft a tailored service that meets your needs.

3. Assess the maturity of your procurement and contract management practices, and implement identified opportunities to strengthen your practices

QAO finding: All councils assess the maturity of their procurement and contract management processes. Councils should identify their desired level of maturity and compare this to the maturity level that best represents their current practices. This assessment will help them identify and implement practical improvement opportunities for their procurement and contract management processes. Maturity areas including:

1. Financial delegation /approval of expenses

2. How to demonstrate value for money

3. Maintaining contracts registers

Such an assessment must include a current state review, review of existing documentation and corporate and operational plans, and identifying councils’ vision and objectives. A category spend analysis may be required, as may a functional analysis including organisation wide engagement and resourcing (centre-led, decentralised, centralised, other). And a benchmark review of existing practice(s) against global best practices for similar councils or organisations. These types of analysis, along with others, will support the realisation of fit for purpose procurement and contract management functions. Various tools are available through the state government, CIPS and other global best practice entities.

Selecting the right methodology, approach and tools for your council will enhance outcomes and benefits realisation. Gathering data and analysing it in the context of council is important, as is working and engaging with inter-departmental stakeholders. The maturity assessment should present real and tangible evidence to support recommendations for feature alignment with corporate and operational planning and best practice procurement; presenting a clear roadmap to close the gap to achieve better practice procurement functional maturity standards.

Our procurement maturity assessment service aligns with national and state standards for maturity assessment principles and includes a focus on key factors for success in public sector procurement and contract management practices.

4. Maintain and administer strong procurement and contract management practices

QAO finding: Councils need to ensure they obtain value for money for the goods and services they procure, and that they have the appropriate approvals to procure the goods and services.  To effectively manage their contractual obligations, councils should ensure their contract registers are complete and contain up-to-date information.

Our article from February 2023, Procurement Framework to ensure consistency and compliance, provides an outline of how to implement a Procurement and Contract Management Framework (PCMF) in local government. This framework is essential in local government because tailoring an effective PCMF for your specific council needs, governance and risk management is necessary to meet the governance and integrity standards expected by the communities you serve. A fit for purpose PCMF means the difference between being able to maintain and administer strong procurement and contract management practices and not meeting compliance regulations. Establishing a comprehensive procurement pipeline or future procurement plan, that’s agreed across council through a Contract Register and/or Forward Procurement Plan, can greatly assist procurement management practices.

We’re experienced in developing PCMFs and have provided this service to numerous councils across Queensland.

Supporting the execution of works across the full gamut of local government procurement and contract management is what we do day in and day out. Whether it is Strategic Procurement Reviews, Procurement Advisory Services or Managed Tender Services, we’re here to help you and to build efficiency in your procurement function.

Peak Services Probity and Assurance Office Staff

Brian Jackson DIRECTOR, CONSULTING SERVICES	Peter Morichovitis PRINCIPAL ADVISOR	Michael Byrne PRINCIPAL ADVISOR
Sonali Cordeiro SENIOR PROBITY SPECIALIST	Joneil Palenzuela SENIOR ADVISOR	John (JJ) Lee PRINCIPAL ADVISOR

Learn more about how Peak Services can become your Procurement Back Office. We have the team to deliver your council with immediate support. We are here to be your procurement partner, with a dedicated expert team of procurement and contract professionals trusted by Queensland councils.