Central Bank attracts no tender for €1.7m external audit contract

The Central Bank has not received any tenders for a €1.7 million contract to act as independent external auditor to the bank over the next five years.

Last October, the Central Bank put the five-year contract with the option to extend for a further two years out to tender.

However, the Central Bank on Thursday confirmed that “no responses were received to the tender for the provision of external auditing services”.

A Central Bank spokeswoman said that in compliance with an EU Procurement Directive, “the bank will seek to award a contract directly through a negotiated procedure”.

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It is understood that the lack of interest in the work arises from restrictions on the successful firm carrying out other work for the Central Bank, such as potentially lucrative consultancy, during the duration of the contract.

Mazars has acted as independent auditors to the Central Bank since 2016 and has received fees of just over €1.6 million during that period. Its work includes the audit of 2020 figures.

However, figures provided recently by Minister for Finance, Paschal Donohoe in a written Dáil reply show that other accountancy firms earned lucrative sums from the Central Bank from other work in a much shorter time frame.

The figures show that EY was paid €1.4 million by the Central Bank in 2019 and 2018 while Grant Thornton was paid €2.45 million over the same two-year period.

The Central Bank’s annual report for 2019 shows Mazars received fees of €504,000 for its work for the Central Bank in 2019.

This was comprised of fees of €155,000 for the audit of accounts; €34,000 for ‘other assurances services’ and €315,000 for ‘other non-audit services’.

Seven years

Mazars was appointed to the role following a public procurement competition after Grant Thornton resigned as external auditors in 2016.

The Central Bank has a policy that no external auditor act for it for longer than seven years at any one time as it seeks to rotate the work around different firms.

In the tender documentation, the Central Bank said that after the expiry of the maximum seven-year duration, the audit firm shall not undertake any audit of the Central Bank within the following four years or “cooling off” period and then would be eligible to enter the next public procurement competition.

The Central Bank put a €1.7 million estimate on the cost of the new contract.

The financial statements of the Central Bank are also audited by the Comptroller and Auditor General (C&AG), and the Central Bank said the successful independent external auditor will be required to engage with and work in conjunction with the C&AG on certain areas of audit focus.

In 2019, the C&AG was paid €149,000 by the Central Bank for its audit work.