Auditing agencies may also carry out performance, or value for money audits of particular PPP projects. INTOSAI published guidelines for auditing PPP projects in 2007 [#158] with the aim to help audit entities carry out thorough performance audits of PPP projects, leading to recommendations for improved performance, and the spread of good practice.
The INTOSAI guidelines recommend that the audit office review a PPP project soon after procurement, and carry out further reviews over the project lifetime. The guidelines recommend the review cover all major aspects of the deal that have a bearing on value for money. They provide guidance for reviewing how the PPP was identified, how the transaction process was managed, the tender process adopted, how the contract was finalized, and on-going management of the PPP contract.
Auditors and other similar bodies may in particular review particular projects where there is concern over whether processes have been appropriately followed, or whether the project is providing value for money.
The following are examples of PPP project performance audits:
• In the State of New South Wales, Australia, the Auditor-General audited the Cross City Tunnel through Sydney. The 2006 report included an analysis of the process in which the PPP contract was awarded, how the contracted was eventually amended, and whether the costs of the project to citizens were justified. The project was criticized for its high tolls, lower than expected levels of traffic, and a lack of transparency in the amendment of the initial contract. The Auditor-General provided opinions on each of these issues based on the analysis [#10]
• The State of Victoria, Australia, awarded concession contracts (called 'franchises') for the tram and train system in the city of Melbourne. When these operators ran into financial difficulties, the government decided to renegotiate with the existing private contractors, rather than re-tender. Because of the concerns this raised for the resulting value for money, the government committed to carrying out an ex-post value for money audit of the concessions and renegotiations. The report, published in 2005, focused on the effectiveness of the responsible agency, transparency of the process, proper risk allocation of the project, the development of public sector benchmarks, and adequate monitoring systems.