Introduction:

Public procurement Audits are essential factors to ensure optimal management and proper spending of public funds. They also aim to uphold important principles such as fairness, openness, equality, transparency, equal opportunities, freedom of competition, preventing waste of public funds, proper funds utilization and achieving value for money. This is achieved by verifying that all purchasing procedures are carried out in accordance with applicable laws and regulations. Law No. (24) of 2015 regulating tenders and auctions, its amendments and its executive regulation issued by Cabinet Resolution No. (16) of 2019 and amended by Cabinet Resolution No. (11) of 2022, constitute the legal framework for regulating all public purchasing operations, including those in ministries, other government agencies, public bodies and institutions, with the exception of what the legislator stipulates in the aforementioned law. The aforementioned law and its executive regulation aim, through the texts contained therein, to ensure the implementation of the aforementioned principles.

To ensure that all purchasing procedures are carried out in accordance with the laws and regulations, and to implement these principles, the role of the State Audit Bureau is essential. As an independent audit body directly reporting to His Highness the Emir, the Bureau exercises control over the funds and works of the entities subject to its audit, ensuring the soundness and validity of the procedures followed in accordance with the laws and regulations, including the Tenders and Auctions Regulation Law and its executive regulation, as they are applicable to public procurement in the state. The Bureau exercises its mandate and control in accordance with Law No. (11) of 2016 concerning the State Audit Bureau. To verify all of that, the Bureau conducts three types of audits in terms of timing: pre-audit, concurrent audit and post audit.

Accordingly, in this article we will shed light on the role of the Tenders Regulation Law and its executive regulation within the framework of promoting the aforementioned principles in (the first theme), and then the types of audits conducted by the Bureau and their impact on auditing public procurement in a way that implements the aforementioned principles in (the second theme).

Theme one: The role of the Tenders and Auctions Regulation Law and its executive regulation in promoting the principles of fairness, openness, equality, transparency, freedom of competition, and value for money

The Tenders and Auctions Regulation Law and its executive regulation address a set of controls and procedures for all stages of the tendering process and the like, which aim to implement the aforementioned principles. In this section, we will outline the most prominent controls that address these principles.

First: The existence of a unified website for state procurement

Pursuant to Article No. (107) of the executive regulation of the Tenders and Auctions Regulation Law, a unified website for state procurement has been established, which is supervised by the ministry of finance, represented by the government procurement regulatory department. Government agencies subject to the provisions of the Tenders and Auctions Regulation Law must commit to announcing all tenders and the results of opening envelopes as well as awarding them on the website. This website also allows the public to view all government tenders and track their progress, starting from the tendering stage, up to the awarding stage, in a way that implements the principles of transparency, openness and integrity.

Second: The existence of a competent tender committee within the government entity

Under Article No. (9) of the Tenders and Auctions Regulation Law, a committee shall be established in the government entity and shall be competent to conduct tenders, auctions, procedures and the like. It shall be composed of employees from the government entity whose number shall not be less than five nor more than seven, including the committee chairman and his deputy. Pursuant to Article No. (13) of the executive regulation of the Tenders and Auctions Regulation Law, it is required that no member of the committee be an administratively subordinate to the chairman of the meeting, and no employee of the competent department in the entity may chair the committee’s meetings. Pursuant to Article No. (11) of the aforementioned executive regulation, the competent tenders committee is responsible for the procedures for issuing tenders, auctions and the like, receiving, opening, reviewing and evaluating bids and issuing recommendations regarding their award, in addition to other competencies stipulated in the aforementioned article. Here it becomes clear that the existence of a competent committee comprised of a group of members in accordance with the aforementioned controls, which considers procurement issues, contributes significantly to achieving transparency and integrity, fair competition and emphasizing compliance with applicable laws and regulations.

Pursuant to Article No. (13) of the indicated executive regulation, the validity of the committee’s meeting shall be subject the attendance of the majority of its members, and two observer members: one from the Bureau, and the other from the government procurement regulatory department at the ministry of finance, without having the right to vote. The committee issues its recommendations by a majority of the votes of the members present, which ensures that recommendations are issued objectively and impartially and enhances transparency.

Third: The existence of a special committee to resolve administrative disputes

As per Articles No. (37) and (38) of the Tenders and Auctions Regulation Law, one or more committees shall be established at the ministry of finance and shall be called the administrative dispute resolution committee, which shall be competent to urgently adjudicate all administrative disputes arising from the application of the provisions of the Tenders Regulation Law and its executive regulation, by a reasoned decision prior to the conclusion of the contract. The committee may suspend the tender procedures until the grievance is decided upon, as the aforementioned committee allows any aggrieved party to submit a substantive grievance to it. There is no doubt that the existence of this committee contributes significantly to ensuring compliance with the Tenders and Auctions Regulation Law and its executive regulation by preventing any violations thereof, in order to implement the principle of fairness and equal opportunities. There is no doubt that requiring the reasons for the committee’s decisions ensures the upholding the principle of transparency.

Fourth: Avoidance of conflict of interests

Pursuant to Article (15) of the executive regulation of the Tenders and Auctions Regulation Law, neither the chairman of the committee, his deputy, nor any member of the competent tender committee may have a direct or indirect interest in the matters presented to the committee. Furthermore, none of them may be a partner of any of the bidders, their agent, a member of their board of directors, or an employee of theirs, whether the bidder is a natural or legal person. If any of the above applies to the chairman, his deputy, or any of the members, they must disclose and withdraw from participating in the procedures for those matters. The purpose of having controls that prevent conflicts of interest is to maintain the neutrality of the decisions taken and prevent them from being influenced by direct or indirect personal interests. This enhances the principles of transparency, integrity, fairness, equal opportunities, and the safeguarding of public funds. Furthermore, pursuant to the aforementioned article, it is not permissible to combine the chairmanship or membership of the committee with the approval of its recommendations. There is no doubt that this separation aims to prevent conflicts of interest, enhance the principles of justice and transparency, achieve dual audit, and enhance trust that the process was conducted in accordance with due process and impartiality.

Also, in accordance with Article No. (33) of the Tenders and Auctions Regulation Law, it is prohibited for government entity employees who assume job duties and responsibilities related to contracts concluded by this entity to have any direct or indirect interest in those contracts. It is also not permissible for any of these employees to be a partner of bidders, their agent, or a member of their board of directors, or an employee of theirs. In this case, they must declare any interest they have that may overlap with the nature of their aforementioned responsibilities. The aforementioned article has specified exceptions to the aforementioned controls. There is no doubt that the existence of these controls on government entity employees enhances the principle of transparency and trust in the government entity, prevents conflicts of interest, and achieves fairness.

Fifth: The existence of controls on the entity’s needs tendering through exceptional means

Under Article No. (2) of the Tenders and Auctions Regulation Law, public tendering is the general principle in tendering the needs, which promotes all the aforementioned principles and ensures fair competition as well as preventing monopoly. However, tendering may be done as an exception through limited tender, practice, or direct agreement. These exceptions were created by the legislator for the purpose of flexibility and to meet needs according to their nature as well as for rapid response. However, they are in accordance with the controls stipulated in the Tenders and Auctions Regulation Law and its executive regulation so that they are not misused and to ensure fairness, equality, transparency, freedom of competition, and equal opportunities. In the direct agreement, there must be, for example, but not limited to, justifications for an emergency or urgent situation or the existence of an exclusive agency. Also, all types of tendering by exceptional means are pursuant to a decision by the head of the entity based on a reasoned recommendation from the competent tenders committee, thereby enhancing the confirmation of the availability of these justifications or not.

Sixth: Defining the needs of the entity clearly and accurately

Pursuant to Articles (2), (3) and (4) of the executive regulation of the Tenders and Auctions Regulation Law, the entity’s needs must be clearly and precisely defined and must be necessary and essential for the workflow, and must not be intended to exhaust the financial appropriations allocated to the government entity. Tendering must be within the limits of actual needs and based on precise and detailed technical specifications without specifying the country of origin, a specific brand or specifications that apply to special or distinctive models, with the exception of needs related to maintenance services, spare parts or programs associated with devices and equipment used within the government entity. All of this aims to reduce corruption of assigning the matter to a specific company. This enhances the principles of transparency, fairness, equal opportunities and freedom of competition.

Seventh: The existence of controls on the evaluation mechanism for technical bids

As per Article No. (42) of the executive regulation of the Tenders and Auctions Regulation Law, the technical review team must consist of a number of no less than two member. The evaluation of bids must be conducted in a clear and structured manner, ensuring that all the required technical elements are addressed. Vague or general expressions such as ‘non-conformity’, ‘unacceptable’ or ‘in violation’, are not sufficient and should be avoided in the evaluation process. It is not permissible to contact the bidders except through the competent tenders committee, and only for the purpose of obtaining the necessary clarifications and confirmations regarding the bids they have submitted. Under no circumstances should such communication involve requests for amendments or changes to the submitted bids, including prices, conditions or specifications on which the tender was originally based. Also, in the case of adopting the points-based evaluation method when tendering, it must be applied to all bidders during the bids review process. This ensures upholding the principles of transparency, fairness and equal opportunities among all submitted bids.

Eighth: Awarding the contract to the best bid and the existence of controls in the event that the highest bid is chosen directly

Pursuant to Article No. (47) of the executive regulation of the Tenders and Auctions Regulation Law, the committee recommends awarding the tender to the best bid (such as the lowest total price offered or the lowest financial result in the case of applying the local value) that meets all conditions and conforms to the required technical specifications, after unifying the basis for comparison between bids in all technical and financial aspects. As an exception, the committee may recommend awarding the tender directly to the highest bid, but this shall be in accordance with the controls and cases specified in the aforementioned article. It is required that the committee issue its recommendation by unanimous vote of its attending members based on a reasoned recommendation. This shall apply in cases where: the prices of the lowest bids are unrealistically low and do not warrant reassurance; or the quality levels offered by the bids differ and the price difference between the lowest and highest bids is small compared to the difference in quality. The existence of these controls and conditions also clarifies that the committee’s recommendation is not preferential to favor a particular company, but rather is based on objective considerations announced in a clear and precise manner, in order to uphold the principle of transparency and fairness, and achieve a balance between cost and quality, thereby achieving public interest and value for money.

The second theme: The Audits exercised by the Bureau and their impact on public procurement auditing in a manner that upholds the principles of fair competition, openness, equality, transparency, and value for money

n this section, we will explain the three types of audit exercised by the Bureau (pre-audit, concurrent audit, and post audit), which contribute to public procurement auditing in a manner that achieves the aforementioned principles.

First: pre-audit

It is a set of audit procedures carried out by the Bureau on the actions of the entities subject to its pre-audit, which aims to prevent any errors or violations before they occur. The entities subject to pre-audit are directed to correct their paths when exercising their powers in using public funds. This prevents these entities from making mistakes, and therefore it is called preventive audit. Pursuant to Paragraph No. (5) of Article No. (7) of the State Audit Bureau Law, documents of draft tenders and auctions that the entities subject to the Bureau’s audit intend to tender, and the draft contracts and agreements that they intend to conclude or renew, if the estimated value of the tender or auction, or the value of the contract or agreement, or the value of the annual automatic renewal of periodic supply contracts and lease contracts is amounted to five million Qatari Riyals or more, regardless of the method chosen in contracting. All these documents shall be reviewed during the pre-audit stage conducted by the Bureau. It will also provide an opinion thereon.

Pursuant to Article No. (10) of the State Audit Bureau Law, pre-audit includes three stages:

1. The stage of requesting the approval of the State Audit Bureau for the tendering:

During this stage, the Bureau is provided with all required tender documents, evidence of the availability of financial appropriations, and other required approvals. These include, but are not limited to, the approval of the head of the entity based on a reasoned recommendation from the committee, if the request is for a limited tender or practice.

During this stage, the Bureau reviews and audits all documents to ensure they meet all requirements and comply with applicable laws and regulations. This includes, but not limited to:

-Ensuring the scope of work clearly and accurately describes all needed requirements;
-Ensuring that there are no specifications or terms directed to specific companies;
-Ensuring that there is a clear and specific mechanism for evaluating bids, through which submitted bids are accepted or rejected. Furthermore, other documents are verified in accordance with applicable laws and regulations, thus upholding the principles of fairness, transparency, equality, free competition, and equal opportunity among submitted bids.

2. The stage of requesting the approval of the State Audit Bureau to conclude the contract:

During this stage, the Bureau is provided with the documents pertaining to the draft contract, as well as any other required approvals, such as the approval of the head of the entity based on a reasoned recommendation from the committee in the case of direct agreements.

During this stage, the Bureau reviews and audits all documents to ensure they meet and comply with all requirements in accordance with applicable laws and regulations. If the draft contract project results from a public tender, the Bureau ensures that all tender procedures adhere to the principles of fairness, openness, transparency, equality, and equal opportunity. For example, it ensures that a copy of the tender announcement is available on the unified website for state procurement, that bids were evaluated in accordance with the terms and specifications on which they were submitted, and that the award was made to the best bid, with the lowest total price and lowest financial result if the local value is applied, and that the best bid meets all conditions and complies with the required technical specifications. This is after unifying the basis for comparison between bids in all technical and financial aspects. If the tender is awarded directly to the highest bid, the Bureau ensures that the controls and conditions stipulated by the legislator are met, in order to uphold the aforementioned principles among all submitted bids, and that the state obtains real value for the public funds spent, achieving value for money.

3. The stage of providing the State Audit Bureau with the concluded contract:

Entities subject to pre-audit must provide the Audit Bureau with a copy of their concluded contracts and agreements within 30 days of their signing.

During this stage, the concluded contract is reviewed and compared to the draft contract previously approved by the Bureau, ensuring that no changes have been made thereto; and that any deficiencies required during the draft contract stage are addressed. This stage also ensures that the performance bond (if requested) is valid and covers the full duration required by the contract, thus preserving the rights of these entities and ensuring that companies are fully committed to proper implementation of the contract.

Second: Concurrent audit

The State Audit Bureau's concurrent audit is responsible for overseeing the work of the competent tender committees of the entities subject to its concurrent audit. this is done by the State Audit Bureau’s auditors who have been assigned by His Excellency the President of the State Audit Bureau, from amongst the Bureau's adequately competent and experienced employees to attend the meetings of the committees to verify that all required procedures are carried out in accordance with the established financial and legal rules. It is worth clarifying that the role of the State Audit Bureau's observer member coincides with the progress of the procedures to ensure their compliance with applicable laws and regulations. Accordingly, we will explain below the role of the State Audit Bureau's observer member in auditing public procurement and ensuring the soundness and validity of the procedures followed by the competent tender committee.

1. Attendance of the State Audit Bureau’s observer member at the relevant tender committee meetings:

The legislator stipulated that the presence of the State Audit Bureau’s observer member is mandatory for the competent tender committee to convene in order for it to be valid.

The legislator requires that the State Audit Bureau’s observer member be notified to attend the relevant tender committee meeting at least one working day prior to its convening. The notification must include the agenda and any related attachments for the purpose of reviewing and studying the topics thoroughly in accordance with applicable laws and regulations.

2. The role of the State Audit Bureau’s observer member during the meetings of the competent tender committee:

- Auditing all stages of the tender process and the like, starting from the tendering stage to the awarding stage, with the aim of verifying that all procedures were carried out in accordance with applicable laws and regulations to ensure the upholding of the principles of fairness, openness, transparency, equality, free competition, equal opportunities, and achieving value for money. This includes, but not limited to:

- Ensuring that the tender specifications and conditions are clearly and precisely defined without any directives;

- Verifying the availability of the requirements for the validity of the tender application, and that the evaluation of bids was carried out in accordance with the terms and specifications on the tender was based; and

- Ensuring the award was made to the best bid, viz; the lowest total price offered or the lowest financial result in the case of applying the local value, and that bid meets all conditions and conforms to the required technical specifications, after unifying the basis for comparison between bids from all technical and financial aspects. If the tender is awarded directly to the highest bid, verifying the availability of the controls and conditions is required by the legislator.

- Reviewing all matters arising in the implementation of concluded contracts, such as change orders, final settlements for contract termination, and other terms of references mentioned in the Tenders and Auctions Regulation Law and its executive regulation, in order to ensure that they are fulfilled in accordance with applicable laws and regulations.

- Raising any question or inquiry to the committee regarding the subjects included in the agenda, and expressing his opinion, observations and reservations during the meeting, and to document them in the minutes of the committee meeting together with any decisions issued, in the event of violations of the applicable laws and regulations.

Third: Post audit

Post Audit of public procurement is concerned with auditing and reviewing the financial and administrative operations carried out by entities subject to the Bureau's post audit after these operations have been concluded in order to verify their compliance with the contractual terms and that the procedures preceding them were carried out in accordance with the applicable laws and regulations. It also involves detecting any violations or irregularities, as well as requesting their remediation as appropriate, and recommending ways to avoid them in the future.

This includes, but not limited to, the post audit verifies that the purchasing process has met all the needed requirements according to the laws and regulations applicable to the entity subject to post audit by doing the following:

-Ensuring that the disbursement was made in alignment with the allocated item in the budget, and that the contracts concluded for the entities subject to the Bureau’s pre-audit were presented to the State Audit Bureau to obtain its approval if they are amounted to the prescribed financial amount of (5,000,000) Qatari Riyals or more;

-Verifying that purchases were not divided to avoid the financial limits specific to the tendering procedures by the competent tender committee;

-Verifying the availability of performance bonds, if stipulated in the contract, and that they cover for the entire period required by the contract, and that late payment penalties are also applied as stipulated in the contract in the event of any delays.

-Ensuring there are receipt records for items or a completion certificate for services or business contracts. The entity must ensure adequate audit over payments made to contractors and that disbursements are made to the contractor in accordance with the contractual terms, ensuring the principles of legitimacy, transparency, and fairness, as well as safeguarding public funds.

The post audit of public procurement also ensures that contracts are executed efficiently and effectively and achieve the desired results for the government entity. This is achieved by measuring the feasibility of the project on the basis of which the contract was made and its impact in terms of providing value for the money spent and ensuring that the objective is not to waste public funds without benefit, thus upholding the principle of value for money.

Conclusion:

The importance of public procurement auditing is clearly evident, as it is considered a fundamental factor to ensure safeguarding, proper management and spending of public funds. Furthermore, the existence of a legislative framework regulating the purchasing process ensures the upholding of important principles such as fairness, openness, equality, transparency, equal opportunity, freedom of competition, preventing the waste of public funds, ensuring optimal spending thereof, and achieving value for money. This is guaranteed by the Tenders and Auctions Regulation Law and its executive regulation, which apply to public procurement in the state, through the provisions contained therein. The role of the State Audit Bureau, as an independent audit body, is to control the funds and activities of the entities subject to its audit by verifying the legality of all purchasing procedures and their compliance with applicable laws and regulations, thereby upholding these principles. This is achieved through the types of audits exercised by the Bureau in terms of their timing.

References:

- Law No. (11) of 2016 regarding the Audit Bureau.
- Law No. (24) of 2015 regulating tenders and auctions and its amendments.
- Cabinet Resolution No. (16) of 2019 issuing the executive regulation of the Tenders and Auctions Regulation Law promulgated by Law No. (24) of 2015, as amended by Cabinet Resolution No. (11) of 2022.