The Office of the Auditor General has identified weaknesses in procurement at the Public Utilities Corporation (PUC) between 2020 and 2023. The findings come from an audit requested by the National Assembly’s Finance and Public Accounts Committee (FPAC).
During the period reviewed, PUC spent about SR 4.9 billion on goods, services and infrastructure projects. PUC provides water and electricity nationwide. For that reason, it must follow the Public Procurement Act and related regulations.
Gaps in planning
PUC submitted annual procurement plans and received approval for them. However, it later carried out several projects and purchases that did not appear in those plans. In particular, auditors found that PUC spent more than SR 27 million on procurements that were not clearly reflected in approved planning documents. According to the Auditor General, this gap weakened oversight and financial control.
Missing records
In addition, auditors could not locate full procurement records for a major project to relocate a central pump station. Key documents, including contracts and completion certificates, were missing. Despite this, PUC paid 93% of a consultancy contract linked to the project. At the same time, auditors found no clear progress reports or formal records explaining why PUC ended the contract.
Advance payments outside the rules
Auditors found that PUC made advance payments without the required guarantees in several cases. Overall, PUC paid about SR 6.8 million in advance across five procurements. In four cases, payments exceeded the legal limit of 25% of the contract value. In one notable case, PUC paid up to 90% of a contract value in advance. Crucially, auditors found no written approval allowing a departure from procurement rules.
Cost overruns and delays
Meanwhile, auditors identified cost overruns of more than SR 7.7 million across several projects. According to the report, design changes, inaccurate estimates and difficult ground conditions drove the increases. At the same time, delays affected many projects. Out of 15 projects reviewed, nine finished late. Delays ranged from a few months to almost four years. While Covid-19 contributed to some delays, auditors said weak planning and slow execution also played a significant role.
Outdated procurement policy
Separately, the audit found that PUC adopted its procurement policy in 2021. Since then, procurement laws changed in 2022. However, PUC has not updated its policy to reflect those amendments. In addition, the policy does not clearly set out rules on advance payments.
Overall assessment
In conclusion, the Auditor General said PUC generally complied with procurement rules, especially during tendering and contract awards. Nevertheless, the report said PUC must improve planning, record-keeping and project management. Taken together, these changes would reduce overspending and limit delays.
Finally, the Auditor General recommended that PUC update its procurement policy, tighten controls on advance payments and strengthen project planning.