Accountability and Transparency in Public Procurement

Accountability and transparency in public procurement Police chief Hemant Karkare died with bullet proof jacket at Chhatrapati Shivaji Terminus on 26/11/2008 at 22:45 PM while attacking pakistani terrorists. Bullet Proof jacket was such low quality that does not work! From the above example, we can easily understood the Public procurement is how much transparent in our country. Moreover, It was not published in any newspaper that who is/are accountable for that Bullet Proof jacket(s). Nobody was accountable nor anybody got punishment!!! We can make a lot of SWOT analysis upon accountability and transperancy, public procurement vs. ommercial procurement etc. but the question is what’s the thresold limit of compromising. Not only India, most of the countries alongwith international agencies such as UNDP and the World Bank are in the process of harmonizing and perfecting their approaches to the diagnosis of financial accountability. Such as World Bank’s Country Financial Accountability Assessment (CFAA) (CFAA assess the risk that public funds may be used illegitimately, inefficiently or ineffectively, by comparing the financial management standards and practices of agencies using funds against an international or ‘best practice’ standard. Sustainable Public Procurement is one major way of seeking to achieve the UNDP’s good governance goal of “realizing development that gives priority to the poor, advances women, sustains the environment and creates needed opportunities for employment and other livelihoods. ” The United Nations Convention against Corruption (UNCAC) is the first legally binding international anti-corruption instrument. As of 12 July 2012, the convention had been ratified, accepted, approved or acceded to by 161 countries as well as the European Union.

On Dec 20, 2011 the Europian Commission officially announced its proposal for the new procurement directives. Literature review Literally accountability means the state of being accountable, liable, or answerable i. e. responsible, by both its people and its elected bodies, for its choices and actions. Transparency denotes the free access to governmental political and economic activities and decisions. Procurement is everything associated with an incoming invoice. This holds true for goods, services, and works.

In public procurement transparency and accountability have been recognised as key conditions for promoting integrity and preventing corruption, balancing with other good governance imperatives, such as an efficient management of public resources, providing guarantees for fair competition etc. In order to ensure overall value for money, the challenge for decision makers is to define an appropriate degree of transparency and accountability to reduce risks to integrity in public procurement while pursuing other aims of public procurement. Who is accountable?

Every person who is in a position of power on trust is accountable for the use of that power. Within the execution of any system, there is a hierarchical structure by which each level is accountable to the next higher level, from desk clerk to the cabinet. For instance, the clerk who failed to maintain up-to-date records, the Officer who failed to supervise the Clerk, the Head of Department who is answerable to Parliament, but failed to get sufficient trained staff etc. and so on. But it is easy to pin down who is accountable. Public Procurement & Transparency The goal of Public procurement are : ) serving the organisation, b) appropriate use of public funding, c) efficient use of public funding, d) accountability, e) value for money etc. But the real picture of public procurement is horrible ! The most common practice is “Low Bid” or H1 bidder. But the “low bid” is equated to a poor quality standard have often soured the public perception of the profession, even though the interpretation of some of these decisions may have been reported out of context. Even through e-procurement always there is a gap exists. Secondly supplying Low quality by paying bribe to govt. fficials is a very common practice. Generally Political powerholder to government servants are engaged in circumvention of their own laws. Lot of examples are failure of budget estimates of revenues and expenditures, avoidance of credit limits through an accumulation of unpaid bills, transfer of amounts toward the end of the year to deposit accounts to avoid lapse of funds, manipulation of performance data and associated means. Hence economic growth and policy measures may not be formulated. General public may not always know what the government is doing.

While some countries review of the estimates by the audit agency, or through an assessment by credit rating agencies but this practice work against financial accountability. There are vital gaps in most public budgets and accounts. In several cases, they do not provide information on tax expenditures, outstanding guarantees, non-financial assets, and liabilities including contingent ones. Public procurement operations are subject to various controls: local controls, accounting controls, controls made by fiscal authorities, as well as external controls and audits.

As public procurement has become more decentralised, a key concern is the lack of co-ordination between various controls, which has led to some loopholes and overlaps in controls over the procurement process. Only a few countries have mechanisms to ensure coordination of control. A related difficulty is to maximise the use of information produced by different controls. Demand for Public Procurement Public procurement created by external demands. As we know that these are transparency, integrity & accountability. Transparency refers to openness and equal opportunities for all interested bidders.

Integrity refers to avoiding improper, wasteful or corrupt and fraud practices. Accountability refers to the fact that public procurement authorities are responsible for effective, legal, and ethical way of procurements. Public procurement is affected by distinct internal demands. This is serving multiple political goals. This complicates public procurement, because sometimes it is not clear to identify the influence of political powers on public procurements. The second internal demand is serving a large amount of stakeholders. These various stakeholders may have different objectives.

Ultimately Common public suffers. There are other factors also affects on the procurement process. 1) Demands on the process from legal regulations. 2) Public procurement is restricted from engaging into long-term relationships with their suppliers. 3) Absence of a perfect competition in public procurement may affects by various ways. Benefits of accountability Poverty is the biggest challenge facing the globe in the new millennium. Government is less accountable and responsive to citizens. All the citizens do not get equal access to government services.

Conversely, improvements in governance are associated with higher per capita income, higher adult literacy, lower infant mortality and reduced poverty. Fiscal transparency is a necessary condition for sound economic governance. Timely publication of a budget document enables the market to evaluate government’s intentions and allows itself a constructive discipline on the government. Transparency increases the political risk of unsustainable policies. A transparent public financial accounting policy makes it possible to determine what the government has done and to compare budgeted and actual financial operations.

Further, open procurement policies not only facilitate the achievement of basic macroeconomic policy objectives, but also increase the productivity of public expenditure. One of the underlying objectives of improved transparency and accountability is to reduce the extent of corruption in the management of governmental affairs. Points to ensuring accountability and transparency in public procurements are : Accurate records: A pre-condition for accountability and control. Internal control: A management instrument for improvement. External audit: Must for SWOT analysis.

Challenging procurement decisions: Complaint and recourse mechanisms with ensuring public scrutiny. Hence the steps to be taken are: a) Strengthening parliamentary control in big infrastructure projects. b) Governments to reduce the high costs and the distortion effect of corruption in public procurement. c) Ensuring transparency at all phases of procurement, from demand creation to contract management and payment, through unrestricted access to all documents for the Monitor and for all activities, which brings both policy and technical expertise to the project. ) Providing adequate incentives and sanctions for both the public authority and bidders i. e. equal opportunity; f) Provide the right environment for detecting corruption and protects against it. Besides raising awareness about the structure and the application of the public procurement systems, we should follow the International common methodology for benchmarking and assessing public procurement systems. The Capacities of Supporting Transparency and Accountability by our civil society is the strength of novel and innovative progress. PARTHA MUKHERJEE Pmukherjee400@gmail. com (1018 words)