Purpose

The provision of an effective
internal audit service is a statutory requirement for local
authorities under the Accounts and Audit Regulations
2015.  Croydon Council has worked with
an external service provider to deliver this service since the
early 1990s. 
Since 2008, Croydon Council has
held a single provider framework contract for the provision of
Internal Audit & Anti-Fraud services.  The current provision was awarded to Forvis Mazars LLP and commenced on 1 April 2018 for
eight years (initially for six years then extended for two
years).  This expires on 31 March
2026.
Approval is being sought to
seek tenders to re-let the framework for a new
term. 
 

Content

For the reasons set out in the
report and its appendix, the Lead Member for Finance
AGREED:
 
 
To approve the procurement
strategy which is in line with Croydon’s CSOs and the
Procurement Act 2023, detailed in this report, for the
recommissioning of Croydon’s Audit & Anti-Fraud services
single supplier framework for a period of 4 years for a maximum
estimated total contract value of £13,500,000
(£1,500,000 for Croydon). This is an annual value of
£375,000 for Croydon).
 

Reasons for the decision

The Audit & Anti-Fraud
services single supplier framework with Mazars expires on
31 March 2026. There is no further option to extend this
contract which is in its final extension period.  The performance of the contractor has been of a
good standard and the service is still required.
 
Of the options available, the
preferred option is to reprocure the framework, as this option
provides access to the different necessary skills, while providing
soft benefits.
 

Alternative options considered

Insource the
provision – The internal audit team
for a single council is inevitably small and this makes it
difficult to ensure that there is the up-to-date range of skills
needed by such complex organisations. 
Furthermore, liaison with other London Boroughs has highlighted a
skills shortage of internal auditors, with other London Boroughs
having difficulty filling vacant internal auditor posts.
 
Enter
into a Shared
Service - The internal audit team for
multiple councils is inevitably larger and this avoids the
difficulties faced by single councils in having the up-to-date
range of skills needed.  Liaison with
other London Boroughs has; however, highlighted a skills shortage
of internal auditors, with other London Boroughs having difficulty
filling vacant internal auditor posts.
For this reason, the option was
discounted.
 
Let a contract for Croydon
Council only – if let to a
reasonably sized contractor then the above issues would be
mitigated.  However, it is more
difficult to obtain good prices when procuring for a single
organisation and to maintain a position of priority with the
contractor once the contract is let.
For this reason, the option was
discounted.
 
Re-procure a single supplier
framework – By following this
option Croydon Council:
·        
avoids the problems of maintaining the breadth and
depth of skills needed for the task
·        
obtains pricing that reflects the likely volumes
that will be purchased
·        
as the leader of the framework, remains a priority
for the Contractor throughout the term of the contract
 
In addition to the above the
Council has found there to be significant ‘soft’
benefits from working in collaboration with a
number of other organisations. 
 
The options considered to
deliver the procurement/contract/project, including the respective
costs & benefits of these are included in Appendix 1, Gateway 1
Business Case, Section 2 part of this report. The potential
tendering routes to then procure the recommended option are
included in Gateway 2 Route to Market, Section 2, of
Appendix1.