I awoke at half five this morning with the tentacles of a thought wrapped around my brain. It wouldn’t let go and three hours later I’m still pissed off.
I’m not angry about being woken up; I’m furious about what I realised in that pre-dawn, half awake moment.
Last night, the Twitter-sphere went a bit manic after it was revealed that Home Secretary Priti Patel’s expense card had been used for some questionable purchases. It didn’t sit right with me, but my brain was busy with other thoughts and so I didn’t pay it much heed at the time.
That all changed at half five this morning when I realised what it was about the Home Secretary’s latest scandal that bothered me so much.
Here’s the thing… In my day job, I work in vendor management, so I know a few things about how this should work. If these are legitimate Home Office purchases, why were they put through as expenses rather than as purchases? Every big business or institution has a procure-to-pay (P2P) system for exactly that purpose.
If someone wants to make a planned purchase, they can request a purchase order. That means the vendor has to be added to the P2P system (Oracle Fusion or the like). This means the vendor must be approved and in the system.
Using P2P has three main benefits for organisations.
- Budget management: knowing what you’re going to spend and when
- Risk management: due diligence into what kind of operations your vendors are running
- Transparency: insight into not only how much you’re spending, but also what you’re buying and from whom
Expenses, on the other hand, bypass all three of those benefits.
- How much will you spend? You won’t know until after the fact.
- Who are your vendors and how are they managed? You get one line on a credit card statement, no more.
- Transparency? Ha!
The expense system should be used for small, one-off purchases. If an employee is travelling for work, they may need to buy themself a meal. A manager may take their team out for a thank-you dinner. Someone may send flowers to an employee who’s off sick. Those are expenses.
Booking training events through expenses? Buying PPE through expenses? Sorry, that’s how you evade your company’s P2P processes.
It’s the sort of thing someone might do once if they knew they wouldn’t get approval and wanted to force their organisation’s hand.
It’s the kind of thing someone might do regularly if they didn’t want scrutiny into who their vendors were or what they were buying from them.
Of course, it’s also the something you might do if your organisation’s P2P processes were so broken that it was virtually impossible to add a new vendor or get a purchase order.
As someone pointed out this morning, government P2P systems are designed to be difficult. This is precisely because of how much hot water a government body can find themselves in if they’re found to be dealing with dodgy suppliers or doing deals with their mates.
Well, how much trouble they should get in for that sort of dirty deed. Alas, our current government seems to specialise in dirty deeds done dirt
While I have no doubt the Home Office’s procurement processes are convoluted and slow, I suspect they’re also designed to be scrutable. My money’s on the second reason: someone wants to evade scrutiny into who their vendors are and/or what they’re buying.
A purchase order for PPE will show what you were buying (e.g. surgical masks), how many (e.g. 5,000), at what price per unit (e.g. £1). It will also show the name of the vendor, which must precisely match the name on the invoice(s) and the bank account.
An expense claim for PPE will simply show £77k at SP Beautiful Brows. What did you buy there? How many? Does the invoice actually name a different business? What do we know about the vendor?
Hopefully the expense claim is backed up by a receipt that can answer some of these questions. But there’s no guarantee it will be anywhere near as specific as it ought to be. And it provides zero transparency into who you’re doing business with.
I cannot stress that last bit strongly enough. Every third party you do business with brings risk to your organisation. Reputational risk, financial risk, operational risk. We put vendors into P2P systems precisely so we can understand and mitigate those risks.
Every vendor engagement (you may have multiple engagements with a single vendor) brings new risks. We put these contracts into a database so that we can interrogate and mitigate those risks.
Using expenses to bypass the P2P system removes transparency and increases risk.
I was angry when I finished the original thread. I’m out of bed now. Had my coffee and my breakfast (burnt pancakes, thank you very much). I’m still frakking furious.
If you’re half as angry as I am, please donate to the fabulous folks at the Good Law Project so they can continue holding this government to account.