DEVELOPMENT OF WORKS PROCUREMENT POLICY GUIDELINES FOR A PRIVATE TERTIARY INSTITUTION: A CASE STUDY OF THE METHODIST UNIVERSITY COLLEGE GHANA

ABSTRACT
The large volumes of infrastructural works elevate to the fore the need to be particular about the procurement procedures for the acquisition of infrastructure. The private tertiary education industry in recent times has been financially challenged. One of such institutions is the Methodist University College Ghana. Low levels of student admissions have had a direct correlation with revenue projections and therefore the lack of a proper framework in the utilization of scarce funds toward physical development could have serious consequences. The study sort to develop policy guidelines for the Methodist University College Ghana to regulate the procurement of works. The specific objectives were to identify the procurement and contracting cycles in practice; and also to identify the construction procurement structures that exist in the University College. Data were collected through questionnaire survey involving key officers in charge of the procurement of works in the institution. An analysis of existing procurement documentation was also undertaken using seven new management tools. The study found that there was the lack of a regulatory policy for construction procurement. There was the absence of an open competitive tendering process because key tender boards had not been constituted. As a result, poor contract management/administration and supervision, procurement reporting, monitoring and evaluation were the challenges the institution was faced with. The study therefore makes recommendations for the rationalisation of the procurement structures in the institution by the introduction of tender boards and distinctly laying out the requisite roles and responsibilities of all procurement functionaries. Guidelines are also proposed to aid in the preparation of a policy that covers generic tendering procedures, risk management, contracting and contract administration.


CHAPTER ONE 
INTRODUCTION 
1.1 BACKGROUND OF THE STUDY
Procurement is recognized as having a major role in the economic and institutional growth of a developing nation (Schooner et al. 2008). Public procurement in Ghana over the years has formed a large part of government expenditure between 50 – 70% of national budget (Adu-Aning, 2010). The function of procurement of good, services and works is no different for private business organizations. One industry of interest where this assertion holds prominence is the private tertiary education industry. This is mainly due to the fact that this industry has rapidly expanded within the past decade and has been without direct government support since its inception about 20 years ago. The industry actors have had challenges competing with the state owned and sub vented tertiary institutions. With the aid of the state, public universities have the resource for physical expanded mainly for their internally generated funds.

Private universities struggle to admit and maintain large student numbers due to the lack of physical infrastructure, the funds to expand the existing structures and the relatively higher academic fees compared with public universities. According to The Chronicle (2013) corporate tax exemptions being enjoyed by the private education industry was revoked with the amendment of Section 6 of the Internal Revenue Act, Act 859 of 2000. This further highlights the limited financial resources available to private educational establishments and the need for efficient utilization of such resources.

The Methodist University College Ghana (MUCG) is arguably one of the leading private tertiary education establishments in the country. It is fully owed by the Methodist Church Ghana and has the Church’s Presiding Bishop as the Chairman of its Council. The University College had had steady growth in terms of student numbers and revenue from its inception in 2000 to 2012. The student population is said to have increase by 85% from 3,412 to 6,302 between 2009 and 2011 while revenue also increased by 72% from GH¢ 8,318,044.60 to GH¢ 13,559,980.40 (Ampadu, 2015). In the light of this the Council of the University College as part of the strategic goal of attaining autonomy adopted for implementation a five year infrastructure development plan, MUCG Strategic Plan 2011 – 2016.

MUCG negotiated a credit facility from Prudential Bank to carry out major physical and electronic infrastructural development on its three campuses in anticipation of further growth in student numbers. In June 2011 a loan of GH¢ 10,000,000.00 was secured for this expansion drive with a floating interest of 20.5%, 11 equal semester payments and 7 years tenor (Ampadu, 2015). Repayment of the loan is however causing the University College challenges due to a downward trend of student intakes replacing a high number of graduands for the past three years (Adjepong, 2015). This is as a result of new admission requirements issued by the National Council for Tertiary Education (NCTE). Admission figures of MUCG dropped from 2500 to under 1000 over the period and the figures have yet to improve. This represents a drop of more than 60% of the annual fresh students’ fee revenue.

Graphic Online (2015) reports of general speculations within the University College community and the Methodist Church that the works procurement and contractual arrangement for the projects were not undertaken appropriately. Thus forcing the Methodist Church to bail out the University College by compulsorily levying its members. These assertions are further evident in the long project durations, the seemingly lack of capacity by some of the project contractors and sub-contractors, scope creep, volume of construction waste and surplus building materials upon project completion.

The University Colleges’ Internal Auditor adds that “The decision to secure the GH¢ 10million loan to expand the infrastructure base of the University was inevitable at the time and management is commended for taken that decision, however Internal Audit is of the view that adequate internal control measures were not put in place to ensure value for money. Internal structures should be respected and used, while internal procedures are adhered to when undertaken future projects” (Ampadu, 2015). The MUCG Development Office (2015) recognizes the challenges and faults of the existing system of construction procurement and argues for the adoption of a new works procurement policy to promote efficiency, accountability and value for money in the operation, management and reporting of works procurement.

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Item Type: Ghanaian Postgraduate Material  |  Attribute: 101 pages  |  Chapters: 1-5
Format: MS Word  |  Price: GH50  |  Delivery: Within 30Mins.
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