APPENDIX 1
SUPPLEMENTARY MEMORANDUM FROM THE HIGHER
EDUCATION FUNDING COUNCIL FOR ENGLAND (PAC 97-98/209)
The Management of Building Projects at English
Higher Education Institutions
Question 74
The HEFCE has conducted a survey of all English Higher
Education Institutions which commenced on 21 January 1998. The
survey included the specific question "Does the institution
have formal tendering procedures covering building contracts?
At the date of the PAC hearing 108 out of 139 (78
per cent) institutions had answered this question. Of the 108,
106 (98%) claimed to have formal tendering procedures and two
did not. The two institutions which responded negatively to this
question on the survey are both very small colleges with no plans
for any substantial building works in the foreseeable future.
They have both indicated they already competitively tender for
larger purchases anyway and would expect to adopt formal tendering
procedures for any future capital projects should the need arise.
In one case, the institution does not own any of its land or buildings
and would be bound by the requirements of the holding trust concerned.
In the other, the procedures are not documented but the institution
has agreed to consider adapting model procedures provided by the
HEFCE Audit Service to its own circumstances. These two institutions
are NOT the same as the two identified by the National Audit Office
(see below).
The two institutions referred to in the NAO report
did not have formal tendering procedures in place in 1996, when
the NAO carried out their work. We have confirmed that these formal
procedures are now in place.
We are continuing to follow-up the survey, and the
current position is that formal tendering procedures exist at
128 institutions with the two mentioned above not having procedures.
We intend to continue to seek replies from all institutions.
The Funding Council will follow-up the survey by
using the information when conducting its cyclical visits. In
addition, the HEFCE Estates Service plans to conduct cyclical
reviews of all institutions estates departments. This will incorporate
the dissemination of good practice and encouragement to adopt
appropriate procedures. Furthermore, the HEFCE Audit Service will
produce guidance for institution's internal auditors drawing on
both the Council's and the NAO's work. We will be drawing this
guidance to the attention of institution's independent Audit Committees,
so that they are in a position to confirm that their institution
complies with good practice.
We anticipate that the degree of compliance with
good practice, which we believe is already better now than at
the time of the NAO's work in 1996, will increase as a result
of the issue of this and other guidance on investment appraisal
due for issue this year.
Chief Executive
Higher Education Funding Council for England
6 March 1998
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