The Practice

The Practice

Expenditure 2006

Total Expenditure in Clare County Council in 2006 amounted to €255 million of which €162 million related to the 43 analysed Account Elements. The following table provides a percentage breakdown of total expenditure across the nine programme groups.

% breakdown of total expenditure for each programme group
Programme Group %
1 Housing 13%
2 Roads 38%
3 Sanitary 17%
4 Planning & Development 9%
5 Environment 6%
6 Recreation & Amenity 3%
7 Agriculture & Education 3%
8 Miscellaneous Services 3%
9 Support Services 8%

The top 10 expenditure items across the 43 analysed Account Elements are also presented below. These account for 95% of the total expenditure

Top Ten Expenditure Items
Account Element Description %
69300 Capital Contracts Expenditure 97,588,181.41 60.4
70000 Materials 23,997,202.07 14.8
65000 Land Purchase/Compensation 11,508,053.48 7.1
79900 Consultancy/Professional Fees and Expenses 6,226,594.69 3.9
65500 Minor Contracts- Trade Services & other works 4,374,925.87 2.7
86000 Energy 2,997,531.73 1.9
90120 Non- Housing Loan Repayments 2,405,101.92 1.5
79000 Legal Fees and Expenses 1,377,076.57 0.9
85000 Rent 1,296,601.63 0.8
69260 Repairs & Maintenance - Other Equipment 1,211,917.66 0.7

In addition to the Top 10 expenditure items on the list, those ranking at 12 (Printing & Office Consumables), 36 (Postage), and 42 (Miscellaneous Expenses) should be noted. Further detail on these items is outlined below.

The application of the analytical framework (as described above) to this spend analysis is presented on the following table. Expenditure of less than €1m is classed as low value. Capital expenditure items are classed as high risk due to the potential of contract failure, poor performance of contractors, poor contract management etc. Day to day operational expenditure is classed as low risk. The top four account elements are broken down by Programme Group and the remaining account elements are presented as total figures.

  • Expenditure classed as high risk, high value totals €114,312,994 (73%)
  • Expenditure classed as low risk, high value totals €33,611,378 (21%)
  • Expenditure classed as low risk, low value totals €7,447,671 (5%)
  • Expenditure classed as high risk, low value totals €1,195,379 (0.8%)

Spend Profile – Clare County Council
  Account Element & Description %
69300 Capital Contracts Expenditure Roads 51,653,379.00 33.0
69300 Capital Contracts Expenditure Housing 20,716,241.00 13.2
70000 Materials Roads 19,482,472.00 12.4
69300 Capital Contracts Expenditure Development 14,790,758.00 9.4
69300 Capital Contracts Expenditure Water 8,391,361.00 5.4
65000 Land Purchase/Compensation Roads 6,926,107.00 4.4
65000 Land Purchase/Compensation Water 4,526,947.00 2.9
65500 Minor Contracts- Trade Services & other works 4,374,925.87 2.8
86000 Energy 2,997,531.73 1.9
90120 Non- Housing Loan Repayments 2,405,101.92 1.5
70000 Materials Water 2,285,025.00 1.5
79900 Consultancy/Professional Fees and Expenses Development 2,122,211.00 1.4
79900 Consultancy/Professional Fees and Expenses Water 1,552,660.00 1.0
79000 Legal Fees and Expenses 1,377,076.57 0.9
85000 Rent 1,296,601.63 0.8
69300 Capital Contracts Expenditure Environment 1,225,800.00 0.8
69260 Repairs & Maint - Other Equip 1,211,917.66 0.8
70000 Materials Environment 1,178,258.00 0.8
79900 Consultancy/Professional Fees and Expenses Roads 1,152,363.00 0.7
79900 Consultancy/Professional Fees and Expenses Housing 955,464.00 0.6
68500 Non-Capital Equip Purchase - Other 780,426.49 0.5
69300 Capital Contracts Expenditure Misc. Services 767,176.00 0.5
81000 Printing & Office Consumables 758,971.43 0.5
76000 Communication Expenses 665,012.44 0.4
78000 Training 458,072.48 0.3
70000 Materials Development 443,315.00 0.3
80000 Advertising 433,287.34 0.3
69250 Repairs & Maint -Computer Equip 422,729.41 0.3
71550 Library Book Purchases 371,125.46 0.2
77200 Security - Property 292,499.69 0.2
67500 Non-Capital Equip Purchase - Computers 268,781.15 0.2
79900 Consultancy/Professional Fees and Expenses Environment 255,486.00 0.2
75000 Computer Software and Maintenance Fees 248,950.02 0.2
85200 Cleaning 238,046.69 0.2
66500 Non-Capital Equip Purchase - Fire Services 232,755.65 0.1
70000 Materials Misc. Services 231,410.00 0.1
70000 Materials Recreation 221,912.00 0.1
71500 Arts Activities 160,357.23 0.1
68000 Non-Capital Equip Purchase - Office Equip/Furn 149,133.78 0.1
69270 Repairs &Maint - Parks & Other Areas 119,563.14 0.1
69200 Repairs & Maint - Plant 115,455.25 0.1
79900 Consultancy/Professional Fees and Expenses Misc. Services 110,465.00 0.1
90200 Overdraft interest & financial charges 102,948.69 0.1
78100 Recruitment Expenses 102,258.93 0.1
69600 Other Vehicle Expenses 99,604.02 0.1
74500 Entertainment Expenses 94,798.34 0.1
70000 Materials Housing 87,810.00 0.1
69370 Agency Health Boards 83,856.00 0.1
70000 Materials Support Services 66,843.00 0.0
79900 Consultancy/Professional Fees and Expenses Recreation 62,252.00 0.0
65000 Land Purchase/Compensation Housing 55,000.00 0.0
69300 Capital Contracts Expenditure Recreation 36,950.00 0.0
77250 Security - Cash Delivery 29,623.87 0.0
85300 Canteen 25,549.01 0.0
81050 Scanning 12,724.01 0.0
79900 Consultancy/Professional Fees and Expenses Support Services 12,257.00 0.0
69300 Capital Contracts Expenditure Support Services 6,516.00 0.0
90000 Lease Interest 5,189.18 0.0
76100 Postage 3,563.63 0.0
79900 Consultancy/Professional Fees and Expenses Agriculture 3,436.00 0.0
67000 Non-Capital Equip Purchase - Machinery Yard 3,400.00 0.0
69150 Repairs & Maint - Buildings (excl. LA Housing) 2,233.73 0.0
66000 Non-Capital Equip Purchase - Civil Defence 714.64 0.0
70000 Materials Agriculture 157.00 0.0
70600 Stock Adjustments 382.99 0.0
77100 Courier 50.82 0.0
99000 Miscellaneous Expenses - 1,332,495.58 -0.9
69000 Hire (Ext) - Plant/Transport/Machinery & Equipment - 1,365,332.55 -0.9
 

Total

156,567,424.40  

Appendix C provides a breakdown of expenditure across the nine programme groups for each of the Top Ten Account Elements. The following should be noted in relation to each.

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1. Capital Contracts Expenditure

  • National and EU Procurement rules apply
  • 98 suppliers
  • Programme Group 2 accounts for 53% of the expenditure
  • 1 supplier accounted for 54% of the expenditure (GAMA)
  • 9 suppliers received over €1m each
  • 26 suppliers received between €100,000 and €1m each
  • 19 suppliers received between €20,000 and €100,000 each
  • Tight controls in respect of procurement management required for this category
  • Professional Contract Management is a necessity
  • Contracts should not commence until contract has been signed
  • There should be transparent and open competition in respect of procurement of works
  • Coding should be reviewed
  • Procurement reforms (circular 33/06) should have a significant impact on this category if projects are managed correctly, particularly with regard to the requirement to quote a fixed price lump sum. The Contracting Authority should clearly set out its requirements at tender stage. The new forms of contracts should also be used.

2. Materials

  • National and EU Procurement rules apply
  • EU threshold for supplies is currently €211,000
  • 652 suppliers
  • Programme Group 2 accounts for 81% of the expenditure
  • 6 suppliers received between €1m and €3.5m (60% of total)
  • 17 suppliers received between €100,000 and €1m
  • 60 suppliers received between €20,000 and €100,000
  • Coding needs to be reviewed e.g. €37,359 was charged to Programme Group 2 for Postage by Phone Pitney Bows (Ire.) Ltd
  • Use of LA Quotes should be monitored regularly
  • Introduce low value purchase card

3. Land Purchase / Compensation

  • Review payments - e.g. payment made to County Solicitor for the sum of €4.5m for the Ennis/Clarecastle Scheme should have been made payable to the vendor
  • Price negotiation and realistic valuations critical
  • Land Purchase accounts for 7.1% of total
  • Programme Group 3 accounts for 39% of the expenditure

4. Consultancy / Professional Fees and Expenses

  • National & EU Procurement rules apply
  • EU threshold for services is currently €211,000
  • 179 suppliers
  • Programme Group 4 accounts for 34% of expenditure
  • 19 suppliers received between €100,000 and €800,000
  • 27 suppliers received between €20,000 and €100,000
  • Procurement reforms (circular 33/06) should have a significant impact on this category if projects are managed correctly, particularly with regard to the requirement to quote a fixed price lump sum. The Contracting Authority should clearly set out its requirements at tender stage. The new forms of contracts should also be used.
  • Use of panels / Framework agreements should be considered
  • Coding should be reviewed

5. Minor Contracts - Trade Services & Other Works

  • National & EU Procurement rules apply
  • 112 suppliers
  • Programme Group 1 accounts for 48% of expenditure
  • 12 suppliers received between €100,000 and €500,000
  • 22 suppliers received between €20,000 and €100,000
  • 1 supplier received €470,000 in Programme Group 1
  • Sixty two suppliers with an individual spend of less than €10,000 account for €195,000 in Minor Contract Expenditure in total. This suggests that there are opportunities to consolidate the supplier base, the objective being to achieve value for money and greater economies of scale
  • Procurement reforms (circular 33/06) should have a significant impact on this category if projects are managed correctly, particularly with regard to the requirement to quote a fixed price lump sum. The Contracting Authority should clearly set out its requirements at tender stage. The new forms of contracts should also be used.

6. Energy

  • 77 suppliers
  • ESB receives 82% of the total expenditure in this category
  • Programme Group 3 accounts for 45% of the expenditure
  • 61 suppliers with an individual spend of less than €10,000 account for €141,000 in Energy expenditure. This suggests that there are opportunities to consolidate the supplier base, the objective being to achieve value for money and greater economies of scale. Oil suppliers in particular.

7. Non-Housing Loan Repayments

  • 6 suppliers
  • €2.4 million

8. Legal Fees and Expenses

  • 47 suppliers in this category
  • 1 supplier received 66% of the total expenditure
  • Programme Group 1 accounts for 26%, Programme 2 accounts for 23% and Programme 3 accounts for 21%
  • Recent contract award adheres to Procurement rules

9. Rent

  • 27 suppliers
  • Review of coding required
  • 1 supplier accounts for 50% of total expenditure in this category
  • 80% of the expenditures applies to Programme Group 9

10. Repairs & Maintenance - Other Equipment

  • National & EU Procurement rules apply
  • 167 suppliers
  • 4 suppliers account for 54% of expenditure between €100,000 and €350,000
  • Programme Group 3 accounts for 40% of expenditure
  • 150 suppliers with an individual spend of less than €10,000 account for €225,000 in Repairs and Maintenance expenditure. This suggests that there are opportunities to consolidate the supplier base, the objective being to achieve value for money and greater economies of scale.

Other Account Elements

1. Printing & Office Consumables

  • €202,000 has been charged to this account element and relates to postage (2 suppliers)
  • Excluding the two postage suppliers there are 297 suppliers under this account element
  • Displays no adherence to contract that is in place
  • Tighter control of contracts required
  • Opportunity to reduce number of suppliers
  • 171 suppliers with an individual spend of less than €400 account for €19,000 in expenditure
  • Programme Group 9 accounts for 44% of the expenditure

2. Postage

  • Expenditure extracted from Agresso totals €3,464
  • This indicates mis-coding and lack of understanding of account element and linkage to product
  • See Printing & Office Consumables above

3. Miscellaneous Expenses

  • This Account Element shows expenditure of - €1.3m.
  • 517 suppliers
  • This highlights the need to monitor this account element more closely. Obviously, there is mis-coding at account element level, linked to the product.