Q: Our auditors have been with us for several years and we feel it's time we should test the market. Have you any tips on the procurement process that we should follow?
A: We have all been at annual general meetings where the agenda item on the reappointment of auditors is approved on the nod. But, as you clearly appreciate, there are good reasons for going through a process to ensure not only that you are getting value for money but also that you are getting the service you need at this particular time.
It is natural to be concerned about the time and cost of a detailed pitching process, but anything less can be a wasted opportunity. So where to start?
First, inform your current auditors that you plan to go to tender. Be honest about your rationale and if you don't want to work with the firm again, say so. The intention should not be that the incumbent will get the contract anyway - that would be wasting everyone's time.
Next, review the service given by your incumbent auditors. Are you happy with the range and quality? I would expect a charity's chief executive, finance director and trustees to have an input to this appraisal. It can be hard to know what you might be missing with your current provider, so an informal chat with contemporaries in similar charities might yield an idea of the services you would value.
Stage three involves writing a clear but simple specification of what you want your auditors to do. Make sure you clarify what you would expect to be included in the base price and what you anticipate might incur additional charges.
Finally, you will need some form of pitching process. You can make it a two-tier process - a brief expression of interest from which you select a small number for face-to-face meetings. From experience, I suggest keeping the decision-making process to a judgment on quality, price and chemistry. Elaborate scoring systems inevitably lead to a 'winner' that you know is not quite right. To identify potential suppliers, I usually look at the reports of charities with a similar size or structure to see which companies they use.
And in case you did not read my previous column, don't be influenced by the offer of that Test match invite.
Send your questions to Valerie.Morton@haymarket.com
- Valerie Morton is a trainer, fundraiser and consultant.