The Local Government Auditor has found that 19 contracts worth over €1.6 million were not properly tendered for in a sample survey conducted in Galway City Council.
When contracts were tendered for, the Council forked out 62% more for the work than the amount originally agreed, according to the review.
The council watchdog has raised serious concerns over City Hall’s continued non-compliance with procurement policies and procedures in a damning report which found there were no consequences for breaches of Council rules.
The auditor could not verify eight contracts worth €374,000 that were awarded in 2015 had been properly advertised.
She found nine contracts valued overall at €1.1m – 27% of a sample of contracts that were examined – had not been tendered for despite exceeding the tender threshold.
Three of these contracts valued at €526,000 related to a single job. The Council had stated that as these were emergency situations, normal tendering procedures could be bypassed. However, the auditor found this was not the case.
One of the contracts was for legal costs mounting to €276,000 and another for rounding up horses which racked up a bill of €74,000.
Four of the nine contracts valued at €228,000 were in place for a number of years without being tendered for.
Another two contracts examined – which cost the Council €145,000 – were awarded based on obtaining quotations instead of going through a proper tender process.
The audit identified four capital projects and one revenue project where the prices paid exceeded the prices on which the tender was awarded by 62%, with €916,000 handed over instead of €681,000 as originally agreed.
An internal audit conducted by Council staff for 2014 found that out of a sample of 12 contracts examined, eight had not been tendered for. These were worth €766,000.
It seems there was no follow up within departments to ensure projects were properly managed.
The auditor discovered that a procurement officer appointed last November had received back just four procurement review reports in six months from the heads of departments despite it being a requirement since late 2013 to fill these forms out.
This non-compliance with procurement policies and procedures is an ongoing issue at Galway City Council and corroborates the auditor’s previous findings, she pointed out.
“A review of the Council’s procurement rules and procedures document is being conducted by the procurement officer and will be updated shortly. This update needs to include details of actions to be taken and consequences arising when breaches of Council rules are identified,” she stressed.
“Actions need to be taken by the procurement section to identify these breaches on an ongoing basis and to bring these breaches to the attention of the senior management team. It is vital that the Council is fully compliant with procurement laws and regulations.”
In response to the audit findings, Chief Executive Brendan McGrath pointed out that under the rules for public works contracts, contract amounts can exceed their original tender by up to 50%.
“I’d hate the message to go out that the Council have no procurement processes,” he insisted.
He pointed to the vacancy rate of 120 houses in the city three years ago being brought down “to an acceptable threshold” due to the Council using contractors based on past tenders rather than going through the lengthy tendering process.
Director of Services for Finance, Management Services Unit and Water Services Edel McCormack said the Council always had robust procurement processes, which these were continually changing. The Council was falling down when it came to the monitoring and compliance with these procedures.
After a motion was tabled by Councillor Peter Keane (FF) calling on the procurement officer to present a report to councillors on what steps were being taken to address compliance breaches, the manager said a report would be presented to the Chamber in January on the issue.