Transcript NON-STATUTORY AUDIT SERVICES

Non-Statutory
Audit Services
Clarification Meeting
23 September 2014
AGENDA AND PRESENTERS
SAFETY EVACUATION
SAFETY REPRESENTATIVE
HIGH LEVEL REQUIREMENTS FOR NONSTATUTORY AUDIT SERVICES
Ishan Bhowani
GROUP COMMERCIAL PROCESS
Ellsworth Jonathan
TECHNICAL CRITERIA
Jacques van Oordt
QUALITY
Sipho Sambo
SHE
Ayanda Maxambele
SD&L
Ishmael Modiko
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CONTRACT OVERVIEW
Ishan Bhowani
Senior Manager: Assurance and Forensic (A&F)
• High level requirements for non-statutory
audit services
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CONTRACT OVERVIEW
• Non-statutory audit services is required due to various
initiatives including but not limited to:
• Increase in significant commercial transactions,
• Expansion programme,
• Limited Assurance resources,
• Eskom needs a number of reputable and well-resourced
external assurance providers to provide the services
required.
• A&F reports:
• Administratively - Office of the Chief Executive (OCE),
• Functionally – Audit and Risk Committee (ARC).
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CONTRACT OVERVIEW
• The panel will report to A&F.
• The panel of auditors will provide a variety of services,
which include assurance and advice in respect of Eskom
and its subsidiaries.
• Contract will be for a 3 year period.
• Maximum of 20 firms will be selected for the panel.
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CONTRACT OVERVIEW -SCOPE OF WORK
The services will include, among other things:
• Proactive review of the commercial tendering process which include, but is not
limited to:
• Capital Expansion Programme;
• Tenders that require BoDTC approval; and
• Tenders that require EXCOPS Approval.
• Other services include but is not limited to:
• Independent opinion on litigation issues;
• Change management;
• Due diligence reviews;
• Information technology/system:
• Information Technology Governance;
• Business Continuity Planning and Disaster Recovery reviews;
• Application control reviews;
• General control reviews;
• System development life cycle reviews;
• Security reviews; and
• Data extraction and analysis.
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CONTRACT OVERVIEW -SCOPE OF WORK
(CONT)
The services will include, among other things (cont):
• Adequacy and effectiveness of business processes, including governance,
risk and controls;
• Technical reviews that may require specialist skills in terms of safety, health,
environmental and quality reviews;
• Governance reviews;
• Probity searches;
• Conflict of interest reviews;
• Support with regards to Integrating Reporting in accordance with International
Integrated Reporting Council;
• Development of policies, procedures and Process Control Matrices (PCMs);
• Advice on International Financial Reporting Standards (IFRS) related matters;
• Advice on tax related matters;
• Advice on and assistance with implementation of internal controls;
• Co-sourcing and secondments; and,
• The consultants might be required to transfer relevant skills/knowledge to
Eskom staff on certain projects on as and when required basis.
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REPORTING STRUCTURE
OCE
Audit Risk Committee
Senior General Manager
Assurance and Forensic
Mr Molefi Nkhabu
Senior Manager
Mr Ishan Bhowani
Middle Managers
Mrs Arthi Govender
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Mr Jacques van Oordt
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MINIMUM REQUIREMENTS
• Minimum requirements for each project from successful
service providers:
• Proposals
• Engagement letter in a pre-defined format
• Final Report and Presentation in a pre-defined format
• Timesheets in a pre-defined format
• Attendance for specific committees to present final
results
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Questions?
GROUP COMMERCIAL COMMODITY
SOURCING
Paul O’Flaherty
Finance Director
Manager
Commodity Sourcing
Ellsworth Jonathan
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GROUP COMMERCIAL MANDATE
Create a Group Commercial organization with clear line of sight over all
external spend (including subsidiaries) incurred, which enables Eskom to
achieve world class capabilities and performance in the areas of
Procurement; Inventory management; Warehousing and logistics;
Supplier management and development; Contract Negotiations and
establishment by providing an appropriate platform for effective and
efficient performance to ensure the right product/service at the right time
without causing production interruptions
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TENDER DATA
The tender shall be submitted as follows:
• one (1) printed original,
• one (1) copy of the original
Eskom reserves the right not to evaluate the tender; if the above is not adhered to
the tender will be disqualified.
The RFP shall be addressed to Eskom Holdings SOC Limited as follows:
• Confidential
• Panel for Non-Statutory Audit Services.
• CORP: 3019
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TENDER DATA
The place for delivery of the tender is Eskom’s Tender Box located at
•
ESKOM HOLDINGS SOC LIMITED
•
1 MAXWELL DRIVE
•
MEGAWATT PARK
•
SUNNINGHILL
•
Main Reception
•
Tender Office
The Tender Box is accessible from 06:00 to 18:00 (Monday to Sunday) and the
Tender Office hours are from 08:00 to 12:30 and thereafter 13:30 to 16:15 (Monday to
Friday only).
The deadline for tender submission is 10:00 am on 08 October 2014: South African
Time
The validity period is 180 working days from tender closing date
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TENDER RETURNABLES
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EVALUATION METHODOLOGY
Evaluation Methodology and Criteria
The suppliers will be evaluated according to the Preferential Procurement Policy
Framework Act (PPPFA) process, where a 5 step evaluation process will be followed in
order to evaluate the supplier response for the non- statutory service panel:
Step 1 Basic Compliance
Tender returnable submissions will be reviewed for compliance with all submission
requirements to ensure that mandatory requirements are met.
Step 2 Functional Analysis
The functional analysis will include technical and quality and tenderers will be expected to
score an overall 80% functional threshold to proceed to the next step of evaluation.
Functional Evaluation Criteria
Technical
Quality
Weighted
average
70%
30%
TOTAL
100%
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EVALUATION METHODOLOGY
Step 3 Price and Preference Analysis
• Proposals will be evaluated on price which will be allocated 90 points and B-BBEE
which will be allocated 10 points.
• Once the price and preference analysis is complete, and objective criteria will be
applied.
• The fees will be standardized by using the Auditor General as a benchmark. The out of
range proposals will be negotiated.
Step 4 Financial Analysis
• An analysis of the tenderers’ financial statements will be conducted for the purposes of
establishing the tenderers financial viability and the ability to meet all of its contractual
obligations for the duration of the contract, should the tenderer be awarded the contract.
Step 5 Objective Criteria
• The objective criteria will be applied after evaluation, and are generally the criteria/
conditions specifically linked to contract award. The criteria will consist of the following:
• Safety, Health & Environmental and
• Supplier Development and Localisation
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TASK ORDER ALLOCATION
The external assurance provider selection criteria below will play a critical role in
the allocation process by ensuring fair work allocation.
COMPONENT
DESCRIPTION
Risk and Complexity
The level of risk and complexity of the project scope needs to be assessed
against the external assurance provider’s capabilities.
Cost
In line with the proposed pricing strategy, the external assurance provider will
be requested to price for the variable portions (Site Specific)
Localisation
This is to ensure that the objectives in terms of Skills Development, Job
Creation, Subcontracting takes place and are achieved.
Performance
This will be based on an auditable paper trail, whereby an External assurance
provider’s performance in executing works for Eskom will be taken into
account in terms of technical performance e.g. (Non-Conformance Report,
Quality).
Availability
The above criteria will take into account the number of active contracts
awarded to an External assurance provider. A service Provider may not be
asked to provide a quotation if they have already been awarded projects for
both probity and Assurance review, this is to ensure that all panel members
do benefit over time.
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Questions?
TECHNICAL CRITERIA
Jacques van Oordt
Middle Manager: Assurance and Forensic
• Overview of the Technical Criteria
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TECHNICAL CRITERIA
NO
DETAILS
1
CAPACITY, KNOWLEDGE AND EXPERIENCE - 40%
Available capacity to complete the work required
Total capacity in South Africa:
Directors:
Managers:
Other professional staff: (excluding admin staff)
1.2
Relevant knowledge to complete the work required
Location of offices in South Africa:
- Majority of the work will be in Gauteng.
- In addition, provinces outside Gauteng.
List of projects completed in Commercial and the value of the transaction.
The firm should demonstrate the experience of the individual responsible for
the account. (Partners, directors, specialists, managers, senior, team):
- If a Director is responsible for the Eskom account as the main contact
- If a Manager is responsible for the Eskom account as the main contact
- If any other level is responsible for the Eskom account as the main contact
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TECHNICAL CRITERIA
NO
1.3
2
2.1
DETAILS
Does the company have the following type of specialists available:
- IFRS specialist
- Construction specialist
- Risk management specialist
- Public sector/PFMA/PPPFA specialist
- Corporate governance specialist
- Companies act specialist
- IT Audit
- SHEQ Specialist
- Internal Audit/Control Specialist
- Integrated reporting
AUDIT METHODOLOGY/APPROACH - 45%
Provide detail of the firm's audit methodology, approach and technology used. .
If adequate details provided that describes the following:
- sound methodology (Planning, Fieldwork, Reporting, Follow-up),
- efficient technology (automated working paper system, CAATs),
- description of process for continuous improvement
Does the firm ascribe to the following. Proof of being accredited to these bodies (or
Director/Lead Auditor/Partner) should be provided:
- SAICA – South African Institute of Chartered Accountants
- IRBA – Independent Review Board of Auditors)
- Institute of Internal Auditors (IIA).
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TECHNICAL CRITERIA
NO
DETAILS
3
QUALITY CONTROL - 15%
3.1
Provide the firms most recent External Quality Review (not older than 5 years).
Provide the firm(s) quality control system and quality control policies and procedures.
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Thank you
Questions?
SAFETY HEALTH AND ENVIROMENTAL
SAFETY HEALTH AND
ENVIROMENTAL
Ayanda Maxambele
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SAFETY HEALTH AND ENVIROMENTAL
SHE NON-NEGOTIABLE TENDER RETURNABLES - ANNEXURE C
No
SHE EVALUATION
1
Is the acknowledgement form for Eskom's rules and requirements on procedure 32-726 (in Annexure
B) signed and submitted by the tenderer
2
A valid letter of Good Standing from Compensation of Injuries and Diseases
3
SHE Policy signed by the CEO of the Company
4
Risk Assessment for the scope of work to be performed by the Supplier
SHE NON-NEGOTIABLE TENDER RETURNABLES - ANNEXURE C
COMPULSORY DOCUMENTS TO BE SUBMITTED BEFORE COMMENCEMENT OF WORK / AWARD OF
TENDER.
5
Cost for Safety (e.g. PPE)
6
Proof of medical surveillance fitness test records
Vehicle Management: Proof of valid driver’s licence or a confirmation that the employee will be using a
public transport.
The Contractor SHALL comply to the Occupational Health and Safety Act, 85 of 1993, other Legal Requirements
and Eskom Legal Requirements e.g SHEQ Policy 32-727, SHE Requirements for Eskom commercial process
(Annexure B and C) 32-726, Cardinal Rules (Life Saving Rules) 32-421, Incident Management 32-95, Vehicle
Specification 32-345, Vehicle and Driver Safety Procedure 32-93. Please note the Eskom has the right to audit
the contractor before contract award.
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Thank you
Questions?
QUALITY MANAGEMENT
QUALITY MANAGEMENT
Clayton Foba
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Thank you
Questions?
SUPPLIER DEVELOPMENT AND
LOCALISATION
SUPPLIER DEVELOPMENT AND
LOCALISATION
Ishmael Modiko
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SD&L MANDATE
We have a mandate to contribute positively to the
development of the country
Our mandate is to achieve maximum and sustainable
local development impact through leveraging Eskom’s
procurement spend in a manner that allows flexibility within
the business in order to accommodate government local
development initiatives and policies
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SD&L MEASURES IMPACT ALONG THESE
KEY PERFORMANCE AREAS
Key performance areas
Definition
Skills development
•
Increasing the skill base (number and skill level) of
South African workers in areas relevant to the
energy sector and where there is a national
scarcity of skills
Local content
•
Utilisation of Eskom and suppliers’ spend to
develop South African based suppliers relevant to
the energy sector (focusing primarily on BBB-EE
Black Owned and youth owned suppliers)
Industrialisation
•
Utilisation of Eskom and suppliers’ spend to foster
the establishment of new competitive industries in
the energy sector
Employment and job
creation
•
Creation of new jobs by suppliers as a direct result
of Eskom business
Supplier development
•
Providing a platform to develop emerging
suppliers, and further contribution to local
developmental opportunities for national and
international suppliers
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SD&L EVALUATION CRITERIA (CONDITION OF
TENDERING)
Specific objectives of Tender (Application of the objective criteria in terms
of section 2(1)(d-f) of PPPFA)
The objective criteria for this tender are the following:
o Transformation of this sector by the appointment of a Black Owned Firm(s) that meets all functionality
requirement,
o Job creation for previously disadvantaged people.
o Development of small black suppliers
To achieve the above the following aspects will apply


Appoint a Black Owned firm ( more than 51% shareholding) or
Joint venture where the lead firm with more than 51% black owned
NB. The joint venture may be:
i)
Black Owned Company and Black Owned Company or
ii) Black Owned Company (Majority shareholding) and Non-Black Owned Company or
iii) Black Women Owned and Black Owned Company or
iv) Black Women Owned (Majority shareholding) and Non-Black Owned Company

In the even where task order is issued to a Generic Company, 30% of their task order value shall be spent with
a Black Owned Company (EME) (where necessary and the list of qualifying subcontract will be provided).
 Please note the above Specific objectives will not have a weight barrier for evaluations but Eskom reserves a
right to award this contract using this conditions of tender,
 Local content and skills development will form part of negotiation prior tender award.
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SD&L EVALUATION CRITERIA UNDER PPPFA
The evaluation criteria seeks to increase SD&L evaluation
score allocation in the overall scoring and to ensure all
dimensions of local development are considered:
10%
 B-BBEE - Levels (see
below score card)
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B-BBEE Evaluation Scorecard
35
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SD&L Compliance Matrix example {It will form
part of negotiations}
Skills Type
Estimated number of candidates to trained
Learnerships
30
Senior Auditor
10
Tax Advisory -Junior Analyst
10
IT Risk Auditor
12
Junior Auditor
30
Total number of 92 candidates will benefit through this transaction
•
Successful supplier will be obligated to train 1 candidate for every R3.2 Million cumulated through task
order awarded to the supplier; this obligation will be for the duration of the contract. The duration of the task
order will not be linked with the supplier’s obligation to train; therefore the supplier will have to ensure that
the skills committed are successfully achieved by the end of the contract period. Skills candidates shall be
sourced from previously disadvantage groups in South Africa. The purpose is to provide these candidates
with skills and workplace experience in order to increase the opportunity for them to be employable within
the industry. The supplier may develop the candidates directly, through their supply network or through the
SETA accredited training providers.
•
Skills development candidates should be currently unemployed graduates from FET Colleges and
universities and/or matriculants. The composition of the candidates shall be representative of the population
demographics of South Africa. The supplier will be provided will the list of skills as per respective discipline
to choose from, this will mean this supplier will train candidate with skill type that is relevant to their area of
expertise.
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Thank you
Questions?