Control and Audit of Public Procurement

In the context of public procurement, control and audit play a central role in guaranteeing the regularity of procedures, the proper use of public funds and compliance with the objectives set (savings, quality, deadlines, innovation, etc.). Public bodies are subject to requirements of transparency, accountability and performance, which translate into a system of internal and external controls, as well as periodic audits.

In this article, we address the main forms of control (internal, external, jurisdictional), the objectives and methods of public procurement auditing, and the key success factors for effective and reliable steering of public procurement.

1. Why control and audit public procurement?

1. Guarantee legality and compliance
   • Verify that the awarding procedures (publicity, competition) and execution (payment, amendments, penalties) comply with legislative and regulatory rules.
   • Ensure compliance with the fundamental principles (equal treatment, transparency, free access).
2. Ensure sound management of public funds
   • Assess the efficiency and effectiveness of public spending (consistency of expenditure, optimization of resources, relevance of choices).
   • Detect and prevent risks of fraud, corruption, conflicts of interest or favoritism.
3. Strengthen trust and credibility
   • Reassure citizens, elected officials and supervisory bodies about the quality and objectivity of decisions.
   • Maintain the image of the public organization and encourage fair competition on the market.
4. Steer performance
   • Identify areas for improvement and optimization levers (risk management, pooling, recourse to innovation).
   • Measure the achievement of objectives set (savings, deadlines, CSR criteria, etc.).

2. The different types of control

2.1. Internal control

• Internal organization and procedures:
  • Setting up a control system within the contracting entity (procurement charter, procedures manual, separation of duties, commitment thresholds).
  • Periodic verification by accounting, legal or procurement departments (file review, document consistency, threshold compliance).
• Self-assessment and self-control:
  • Officers or managers are accountable for the compliance of their actions (notably through computerized workflows).
  • Monitoring indicators (KPIs) and alerts help detect anomalies.

2.2. Non-jurisdictional external control

• Supervisory or inspection bodies:
  • For example, in some countries, control may be exercised by a General Inspectorate or a General Controller of Finances, who verify the regularity and appropriateness of spending.
• Legality control by the State representative:
  • Verification of deliberations and acts related to public contracts to ensure their legal compliance.
• Specialized authority:
  • Certain authorities (such as the Competition Authority or the Public Procurement Regulatory Authority) may intervene to oversee fair competition and investigate suspicious practices.

2.3. Jurisdictional control

• Administrative jurisdictions (administrative tribunal, administrative court of appeal):
  • Referred to in case of contestation of an award decision, dispute on an amendment, termination, etc.
  • May order the annulment of a contract, injunctions or damages.
• Courts of Auditors:
  • A posteriori control of public management (accounts, budget balance, compliance with rules), publication of reports and recommendations.
• Regional Chambers of Auditors:
  • Evaluation of the regularity and efficiency of expenditure of territorial authorities, local public establishments, etc.

3. Auditing public procurement: objectives and approach

3.1. Definition of audit

Audit is an independent and objective examination aimed at evaluating the effectiveness, compliance and performance of an organization or process, according to recognized standards or references. In public procurement, audit covers:

• Procedures (compliance with the code or directives, transparency, traceability).
• Internal controls (existence and application of procedures manuals, separation of functions, IT tools).
• Performance (cost optimization, satisfaction of needs, innovation, CSR).
• Risk management (fraud, corruption, delays, disputes).

3.2. The steps of a Procurement audit

1. Preparation:
   • Define the scope (period, organizational perimeter), objectives (compliance, performance, etc.) and methods (interviews, document analysis, tests).
   • Identify the actors (internal/external auditors, procurement, finance).
2. Information gathering:
   • Analysis of documents (procedures, contract files, contracts, invoices, tracking sheets).
   • Interviews with officers, managers, possibly suppliers.
3. Tests and verifications:
   • Verification of supporting documents, reconstruction of the validation circuit, contract sampling.
   • Control of competition, evaluation of the independence and traceability of decisions.
4. Analysis and synthesis:
   • Identification of gaps between the observed situation and the references (procurement code, internal manuals, ISO standards, etc.).
   • Assessment of severity (minor or major anomalies, financial or reputational risks).
5. Audit report and recommendations:
   • Presentation of conclusions (strengths, weaknesses).
   • Issuing recommendations to improve compliance, efficiency and security of processes (corrective actions, training, organizational redesign, etc.).
6. Post-audit follow-up:
   • Implementation of action plans, progress monitoring, re-evaluation if necessary.

4. Internal vs. external audit

1. Internal audit
   • Performed by an audit or control service integrated into the public organization.
   • Advantages: better knowledge of the internal culture, responsiveness, pedagogical approach.
   • Limits: risk of lack of objectivity, hierarchical dependence, difficulty in pointing out major dysfunctions.
2. External audit
   • Entrusted to an independent audit firm or a specialized body (Court of Auditors, private firm).
   • Advantages: fresh perspective, technical expertise, increased credibility.
   • Limits: sometimes high cost, adaptation time to understand the context.

5. Risk management and anti-corruption mechanisms

• Risk mapping: identifying sensitive areas (large contracts, strategic purchases, risks of collusion or agreements).
• Code of ethics: defining and disseminating ethical rules (gifts, conflicts of interest, transparency).
• Whistleblowing mechanism: a channel to report acts of corruption or fraud.
• Staff training: raise officers’ and elected officials’ awareness of probity issues, sanctions and good practices.
• Enhanced monitoring: use data analytics to spot anomalies (suspicious invoices, contract fragmentation, overbilling, etc.).

6. Key success factors of a control or audit

1. Cooperation and transparency
   • The audited services must cooperate, provide documents and data in good faith.
   • The auditor must communicate clearly on the perimeter, objectives and methods.
2. Skills and independence
   • The auditor must master public procurement regulation, investigation and evaluation techniques.
   • Their impartiality ensures the reliability of findings and the acceptance of recommendations.
3. Clarity of references
   • Audit standards, internal procedures and regulation must be clearly defined and accessible, to limit divergent interpretations.
4. Constructive approach
   • Beyond detecting errors, the audit must propose paths for improvement.
   • Recommendations must be realistic, prioritized and followed by an action plan.
5. Continuous improvement culture
   • Integrate lessons learned from previous audits, update practices, regularly evaluate the effectiveness of corrective measures.

7. In summary

Control and audit of public procurement are essential mechanisms to guarantee:

• Compliance of procedures (respect of laws, fair competition, transparency),
• Performance of public procurement (resource optimization, quality, innovation),
• Securing transactions (fight against corruption, risk management),
• Trust of citizens and economic actors.

For Procurement professionals and students, it is crucial to:

• Know the main control mechanisms (internal, external, jurisdictional) and the steps of an audit (gathering, analysis, report, follow-up),
• Understand the importance of a compliance culture (anti-corruption mechanisms, codes of ethics, risk mapping),
• Know how to set up indicators (KPIs) and tools (data analytics, e-Procurement platforms, procedures manuals) to effectively steer the Public Procurement function,
• Foster a pedagogical and constructive approach to audit, focused on continuous improvement and cooperation with auditors and supervisory authorities.

By adopting a proactive and transparent approach, the public organization can strengthen its legitimacy, encourage competition, and sustainably improve the quality and reliability of its procurement operations.