Appendix: Our proposed work on procurement

Introducing our work about procurement.

After reviewing the results of our recent audit work, talking to our auditors, consulting with Parliament, and holding workshops with various public sector organisations and groups, we have chosen the following topics for our proposed work on procurement. We will review our proposed work over time in response to emerging findings and risks. We encourage input by any interested parties at all stages of our procurement work.

Topic	Our proposed work
Functional leadership	We intend to carry out performance audits looking at: how well MBIE's functional leadership creates efficiencies and improves services and service delivery. Our audit will specifically examine the part that all-of-government contracting plays in this; and how well MBIE's functional leadership develops procurement workforce expertise and capability in central government.
Functional leadership	We intend to examine aspects of how well the GCDO is fulfilling its leadership role in ICT procurement.
Initiating a procurement project	Using a case-study approach, we intend to examine a small selection of procurements by local councils to highlight the importance of procurement capacity and capability and identify matters that local councils should focus on to reduce the risk of procurement failures.
Initiating a procurement project	We intend to examine significant investments in the health sector. We are interested in how the health system determines what infrastructure investments are needed, where, and when. In subsequent years, we will also consider whether there is merit in looking at other aspects of significant procurement in the health sector either as part of our annual audits or as part of other projects.
Identifying needs and analysing the market	We intend to examine how well the New Zealand Transport Agency is working to help ensure a robust contracting market that is capable of delivering a competitive tendering environment when contracts for maintenance and renewal are completed.
Specifying requirements for a procurement	Although we have not planned any specific work examining this matter, we will continue to review our programme of work to ensure that it reflects emerging findings and risks.
Planning an approach to the market and evaluation	We intend to examine how collaborative arrangements have been established and managed for best effect, and provide assurance that the expected benefits are well defined, monitored, and assessed. Because there have been a number of public private partnerships set up already in the transport, education, and justice sectors, we propose in the first instance to explore how effectively these public private partnerships are delivering on their intended outcomes. We intend to identify lessons from these examples that might be applicable to various forms of collaborative contracting that involve a large amount of public expenditure.
Approaching the market and selecting a supplier	We will survey a sample of public organisations to find out the extent to which panels of suppliers are used, how they are used, and their purpose. We intend to publish the survey results. Based on the survey results, we will identify aspects of the effectiveness of panels of suppliers for future work. For example, we might focus on whether public organisations are using panels appropriately, are following good procurement practice in establishing and operating panels, and have the capability to use them effectively. We might also consider whether the expected benefits are being realised.
Negotiating and awarding contracts	This is an important part of the procurement process and we will consider it in our annual audit work where relevant and appropriate. We will continue to examine public organisations' policies and practices for awarding contracts as part of our annual audit work, particularly for public organisations that do a significant amount of procurement.
Managing contracts and relationships	We will review the management of low-cost, high-volume contracts in selected central government agencies.
Managing contracts and relationships	We intend to look at how well the procurement of social services meets community needs. We will consider how well procurement is managed, monitored, and adjusted to support the achievement of desired outcomes for communities. We will also examine how effectively public organisations work together to ensure that procurement of services is well co-ordinated and aligned with community needs.
Evaluating and reviewing the procurement	We are considering what work to do on public organisations' evaluations and reviews of their procurements.
Evaluating and reviewing the procurement	MBIE is responsible for administering the annual $1 billion Provincial Growth Fund. MBIE has also had responsibility for the KiwiBuild programme after the KiwiBuild unit was set up in the Ministry in December 2017. The unit will move to be part of the new Ministry of Housing and Urban Development, which is due to start operating on 1 October 2018. Given the size and complexity of both the Provincial Growth Fund and the KiwiBuild programme, we will do additional work in the course of our annual audits to give assurance about processes and systems for administering funding and investment. MBIE has a significant role in awarding grants and other funding to third parties and administers a range of grant programmes (for example, the Endeavour Fund and the Partnerships Scheme). This type of expenditure is expected to increase in the next three years with the establishment of the Provincial Growth Fund, because grants are envisaged as the main mechanism to fund non-commercial projects under the Fund. We will continue to build on earlier work in the annual audit to give assurance about processes and systems in MBIE to award and evaluate grants.