What is the role of Procurement, and when should it call things out?
The British Post Office Scandal hit UK headlines in a five-part, Channel 4 drama-documentary, ‘Mr Bates vs The Post Office‘, at the beginning of January of this year. How could the original procurement error have happened? How was it allowed to grow into such horrific and shocking violations of justice? Those are questions now being attempted by an independent public statutory inquiry into Fujitsu‘s Horizon IT system at the Post Office.
Anyone not familiar with the scandal should look it up. It started with a bad buying decision and morphed into a series of horrifying, wrongful prosecutions of innocent people. You can see extracts from the enquiry almost as it happens on YouTube; and it is well covered in Wikipedia articles.
Private Eye was one of the first to reveal the scandal and continues to follow it assiduously. Its reporting may leave Procurement people with extremely uncomfortable questions (listed below). Here are extracts from this week’s article in Private Eye, on the role of auditors, EY.
EY, the Post Office Limited auditors reported to Post Office management in August 2011:
“The outsourcing of Post Office Limited’s (POL) IT function to a third party service provider (Fujitsu) creates a degree of complexity and difficulty for POL in gaining assurance that there are adequate IT general controls in place around [its] business critical systems“
Private Eye‘s current article asks why EY never declared its concerns over business critical systems as material; and makes the following comment:
“But in the comfortable world of beancounting, highlighting problems isn’t the done thing. Clients would get upset, none more so than the Post Office and the IT giant where the bugs and glitches originated, Fujitsu.“
Private Eye also reports that EY earned over £1.2 million from auditing and other services in its last year at the Post Office, before resigning and being replaced by PWC. It goes on to report:
“EY declined to say why it had resigned as Post Office auditor in 2018 – as the Alan Bates litigation was exposing some unedifying details. It did not file the statement at Companies House that is required if a resigning auditor believes there are matters that should be brought to the attention of shareholders (in this case ultimately the taxpayer. This itself demands an explanation“
Here, as promised, are those uncomfortable questions for Procurement
- Is all of this above Procurement’s pay-grade?
- Should Procurement accept imposed limitations on its scope?
- Must it be complicit in corporate conspiracies?
- Does Procurement have no accountability to speak out?
- Where do such failures of moral duty and courage leave Procurement’s claim to a seat at the table?