Procurement Audits
Adrienn Nagy dr.
Leader
Corporate Services Business Supervision and
Process Management
Budapest 14/11/2007
AGENDA
• What is Audit about?
• Procurement Lifecycle
Audit
• Audits in 2006-2007
• Recommendations
• Audit Effects
• Process Transparency
• Ethical Behavior
Ca. 30 Procurement Audits Prepared
Audit Initiated by
Audit performed by:
CS Business
Supervision
•Set-up in Q3 2005
• Monitor Procurement
Practices
•Introduce and unify best
practices
•Yearly Audit Plan and
single initiations to
investigate
• Audit Report with
Recommendations
•Audit Follow-up
•Regulations update,
Process improvement
GCFO
Audits 2006-2007
CS Director
Procurement Leader
Inter-business
Subsidiary Audits
Branch Audits
Logistics
MOL Romania
+ Follow-up
Road transport; Rail / Barge
Chemical Road;Bitumen
Road + Follow-up
Pakistan/Kazakhstan
Moscow + Follow-up
Procurement
Process
Procurement Policy
Retail Tebodin project
BT Pipeline
management regional
Contract execution
Technical specification
Contract testing:
compliance, archiving
ITIT Procurement General
Tank cleaning
Bid evaluation
elaboration (Moscow) / update
/ supervision
Notebook Tender 2007
Audit Outcomes affect:
Procurement
processes
Practices
Suppliers Relations
-Contact for Suppliers complaints, networking
-Advises on Transparency, Ethical and
Procurement Process issues
-Cartel Risks; follow-up, risk mitigation
-Breach of Contract supervision
Procurement Lifecycle Audit
3. Bidding Evaluation
4. Contracting
2. Bidding Procedure
5. Contract Performance
Negotiation and
communication with
Suppliers
Guarantee issues, Eventuel
Breach of Contract
Fair & Reliable
1. Supplier pre-qualification
Basis for Invitation to Bid (ITB)
6. Post-evaluation of
Supplier Performance
GRADING
AUDIT RECOMMENDATIONS
AUDIT Investigates the complex Procurement Process
Impact of Audit Recommendations
PROCESS MONITORING
AND FEEDBACK TO
PROCUREMENT
•
•
Process compliance with laws and
Group regulations
Process rationality and efficiency
AUDIT
RECOMMENDATIONS
PROVIDE
•
•
•
•
Input for decision making
Opens discussion on future
procedure, introduces new best
practices
New control point elaboration
AUDIT FOLLOW-UP!
Positive Effects of Audit Recommendation
Initiates Procurement Process Changes & Practices
• How to communicate suppliers in a bidding process –
fair procedure & international standards
• Enforce open gates principle – always invite newcomers
from the relevant market
Affects Change in Regulatory Environment
• New Group level Ethical Code
• Draft Procurement Ethical Code
Process Transparency & Ethical Behavior
TRANSPARENCY and Procurement
What is to be TRANSPARENT?
Why to enhance TRANSPARENCY?
Common Business Value
Duly Keeping Processes & Deadlines
Open Gates Principle
TRANSPARENT Communication
with Suppliers
Process Transparency - We expect the same Approach!
MOL OFFERS
MOL ensures that Suppliers are
familiar with the Procurement
Processes, deadlines.
OPEN GATES PRINCIPLE:
market surveys and invitation of
new Suppliers
NO Cartels / effective detection /
MOL surveys Supplier activity and
has the possibility to submit Cartel
suspicion to National Competition
Authorities or even to the EU
Commission
YOU ARE REQUESTED TO
MOL expects fair and complete
documentation, correct pricing
from Suppliers in a Bidding
Keep deadlines, do not wait for the
last seconds when submitting your
documents in a Bidding
NO Cartels / individual pricing /
ensure individual strategic
behaviour in the bidding
Correct Contract Performance /
warranty issues / influences
evaluation and the fact that you
get on the invited list for the next
Bidding!
ETHICS and Procurement
Corporate Ethics
Group level OBLIGATIONS &
EXPECTATIONS
MAIN Source: MOL Group Ethical
Code
International Standards & Best
Practice
Ethical Code is to be attached to all
contracts for signature
NEW
Ethical Behavior
We expect the same Approach!
Mutual Trust and Respect
•
•
•
•
All information with regard to relations between MOL Group and its suppliers is
considered confidential.
We will not misuse our position in the marketplace,
Creating equal conditions for all our business partners.
We expect our Bidding and contracted partners to act in the same manner.
Conflict of Interest
•
Avoid personal financial interests and do not misuse occupied position.
Prohibition of Unlawful Advantage
•
•
•
Honesty and Integrity
We condemn any form of bribery or the acceptance of unlawful business advantage
We discourage the offering of gifts, and we forbid our employees to accept them.
Ethical Code is attached to all Procurement Contracts
but have to stick to it throughout the Bidding Process!
Contact & Thank You for your attention!
PROCUREMENT AUDIT helps MOL Group Procurement
to be EXCELLENT in the CEE Region.
§
§