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04 May 2018

Value for Money in Centralised Procurement, part one


Central Procurement Agency risks losing 2.6 million euro

Although the Central Procurement Agency was established to save money of Kosovo budget through bulk purchase, the latest report of the National Audit Office indicates that there is a risk that suppliers are paid without delivering goods. Furthermore, in some cases CPA prices were higher than the individual prices of public institutions.

The Central Procurement Agency has several contracts, including the contract for paper, tires and stationeries. Based on the information received from public institutions (Ministries, Municipalities, etc.), the CPA contracts out the quantity and the price of contract. The performance report indicates that the CPA had insufficient information to make a decision regarding the necessary quantity of contract. In fact, the decision was made based on the information provided by 80% of these institutions and the rest was decided under assumption.

The report has found cases of goods which cost more when purchased from CPA rather than by institutions individually. The report indicates that in most cases, the CPA had not analysed the individual contracts of the institutions to see the prices with which they were supplied. Therefore, for example in the case of paper, both the Kosovo Judicial Council Secretariat and Customs paid lower prices before they were included in centralised contract, while in the case of fuels at least four entities had lower prices than the CPA.

Since contracts were not properly monitored and there were no preventive measures, the suppliers could claim 2.6 million euros compensation for goods that were contracted but not ordered. Rare reporting and even rarer analysing of these reports has resulted in lack of information regarding the progress of contracts and has led to a lack of corrective measures.

The Auditor General Besnik Osmani said: “the loss of money through centralised procurement is unacceptable. The CPA urgently needs to undertake corrective measures.” The importance of this issue has made the Auditor General to decide to carry out a second audit of these contracts when they are implemented.

The audit has assessed 8 out of 15 contract or 56% of the contracted value by the CPA during 2015 and 2016.

You can read the full report at: