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NAO report questions value of government procurement cards

Advances in e-procurement and invoicing mean that the card may be outdated

The UK government is being urged to reassess the need for procurement cards due to advances in electronic procurement and invoicing methods.

A National Audit Office (NAO) report released this week said that a 14-year-old KPMG study that claimed each government procurement card transaction costs an average of £28 less than a non-card transaction was "outdated" and can no longer serve as the business case for using the cards.

"Our preliminary work in the Ministry of Justice (MoJ) indicates that the cost of procurement has decreased substantially, due to advances such as electronic procurement and invoicing methods," the NAO said.

The government procurement card was introduced in 1997 as a way for all public sector organisations to make low-value purchases. Some £322 million was spent using the cards between 2010 and 2011, with 74 percent of transactions being made by the Ministry of Defence (MoD).

The NAO also highlighted that data relating to the use of the card was not being managed and monitored effectively by departments, which implied that public sector organisations cannot monitor adherence to policies or assess exposure to risk.

Further to this, the Cabinet Office did not have an accurate picture of how the card was being used, as data collected centrally could not be mapped to the data collected by individual departments.

Differing system capabilities was cited as the reason for the insufficient data reporting within government departments and centrally to the Cabinet Office.

"Our discussions with case study departments found that the levels of management information depended on the contract terms with the card provider and the sophistication of their own systems," the NAO said.

"Some departments had access to online systems that allowed them to interrogate transaction data in real time. Some had access to a suite of reports, including declined transaction reports, unused card reports and lists of cards that the card provider was monitoring because of unusual activity."

Where departments do not have access to timely, accurate management information on spending, it "represents a barrier to managing the controls", the report said.


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