A report into the local authority’s expenditure said that proper procurement rules were not followed in 78% of deals examined.
This meant that €4.3m, out of €4.9m which was audited in 2010, did not meet requirements. In 40% of these cases contracts were awarded without a procurement process.
A quarter of all problem purchases, spotted by the internal audit team, related to the €8m investment the council made in the relocated visitors’ centre for WWRD’s Waterford crystal operation.
In the case of one construction company on this project there was no evidence of other firms being involved in a tender competition.
Because of this Waterford City Council was told to give back €101,866 in grant aid it got from the European Structural Fund. In total the council had to return €218,952 of ESF money received for the Waterford crystal project because it was not spent according to the rules.
The Southern and Eastern Regional Assembly, which administers its portion of the ESF, said that it also had not received a realistic breakdown of rent due from WWRD for using the visitors’ centre.
The city management’s response to the auditor was that there were severe time constraints in the development of the visitors’ centre.
It said the work was specialised and this limited the number of potential suppliers. The council also said it believed it got value for money.
“The crystal project was a one-off project with very unique time pressures and specialist expertise with limited availability.
“Whilst acknowledged that the full rigours of the procurement rules were not adhered to, the adhered to principle of obtaining value for money was of upmost importance,” it told the auditors.
Along with the visitors’ centre project there were issues highlighted in housing maintenance, road construction, the hiring of equipment and security.
The issues were detailed in an internal report on the money spent in 2010.
“A significant number of instances of non-compliance with proper public procurement procedures were noted at audit. The management of public procurement function needs to be significantly improved,” it said.
Responding to the wider issues raised in the audit, the management established a review group to examine how spending was managedin the organisation.
In other areas of spending the auditors could find no evidence of a procurement file on the traffic fine management system; the Tramore Rd improvement scheme; the work at Knockboy junction and repair works on Rice Bridge.
In total the council spent €822,941 on 12 different projects in 2010 where there was no procurement file available for the auditors to inspect.
In the case of €788,328 of spending the contracts in question were not advertised.