Procurement audit – helping to ensure public money is well spent in the crisis. EIPA Briefing June 2020.

Burnett, Michael (2020) Procurement audit – helping to ensure public money is well spent in the crisis. EIPA Briefing June 2020. UNSPECIFIED.

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Abstract

The COVID-19 pandemic has prompted huge increases in public spending in Europe, not only as an immediate response to the crisis, but also with a view to supporting economic recovery and dealing with the longer-term social consequences. Public debate has focused mainly on where the money will come from. Attention must also be given to how it is spent. Amid such an emergency, rules have to be relaxed, at least temporarily. EU state aid rules have been suspended, and the general escape clause of the Stability and Growth Pact has been activated. These exceptions will be reviewed in order to ensure sound public finances in the future. This Briefing draws attention to another dimension of public spending that will require scrutiny, namely the ways in which governments provide goods, services and infrastructure through public procurement. Procurement in times of crisis is likely to pose higher risks of wastefulness or impropriety, for example, because of the existence of extreme urgency as a justification for the use of direct awards. This could be a further blow to public trust in government when there is already questioning of the competence of public institutions to address the multiple political, economic and security challenges facing Europe. Moreover, failure to maintain the principle that contracts advertised by public bodies in one country are open to economic operators in others would cause damage to the EU’s internal market. The Briefing therefore identifies key parameters for auditors in assessing the risk of sub-optimal procurement, and how they should prioritise and conduct their audits to check if these risks have materialised, including the risk of fraud and corruption.

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