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Press Release
26/05/2016   Municipal governments should pay more attention to catering service procurements

The supreme audit institution urges local governments to pay more attention to catering service procurements because the process is currently managed inadequately, procurement agreements are not exact and, as public audits have demonstrated, can result in losses as well as fail to achieve planned outcomes.

The fact that many issues exist with catering service procurements was announced by the supreme audit institution back in 2015, when the National Audit Office completed its public audits of the country's local governments. Inadequately prepared procurement documents, formally conducted procurement procedures and failure to indicate requirements for food products and catering services have allowed service providers to provide services at their own discretion and at prices they set themselves.

Conducting the further monitoring of the catering service area, public auditors paid attention to the practices applied by one municipality – the Jurbarkas District – which had been highlighted by the media as a great example.

The public audit revealed that the Jurbarkas District municipality only purchased catering services from the service provider, even though the quality nutrition programme for children in educational establishments (applied from 2013) aims not only to select a catering service provider, but also attract almost 1.5 million euros in investment to the assets necessary for providing the service. According to the programme, the local government provided the conditions for the service provider to provide catering services for 10 years, even though such contracts can only be signed for a period of 3 years. However, the service provider made no commitments to hand over the equipment acquired by the municipal government to the municipal authorities and, having completed a renovation of the service facilities, will continue to use them and receive the economic benefits.

"This agreement and the terms and conditions established by it do not differ from the catering service agreements signed by other municipal government or public establishments, so the Jurbarkas municipality did not have grounds to enter a 10-year catering service agreement with the provider," explained Regina Rudokienė, Head of Audit Department 3, which is responsible for regional audits.

The supreme audit institution urges municipal authorities to pay attention to the fact that if they wish to attract private investment, they must adhere to the legal acts that regulate the terms and conditions of such investments. With the aim of preventing municipal governments from guiding themselves by the example of Jurbarkas, which has been publicly lauded as exemplary, the institution requested that the Association of Local Authorities in Lithuania introduce the heads of municipal governments to the results of the audit. The Public Procurement Service has also been notified about the catering procurement issues identified. The conclusions issued as part of the audit are expected to help the entire public sector successfully organise catering services.

 

Responsible for the information Communication Division
Last updated on 1 July 2016

National Audit Office of Lithuania

Pamėnkalnio St 27, LT-01113 Vilnius, Phone: + 370 5 266 6793, + 370 5 266 6752, Email: nao@vkontrole.lt.