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ANAO runs the rule over Government entity's probity and procurement, and comes up with useful lessons
Ensure your guidance material, supporting documentation and relevant training programs are clear and up-to-date, and your personnel know their responsibilities and are complying with them.
With the "silly season" just around the corner and the Government Procurement (Judicial Review) Act 2018 (Cth) soon to receive assent, the Australian National Audit Office (ANAO)'s Performance Audit Report No. 9 2018-19 on procurement processes and management of probity by a Government Business Enterprise is a timely reminder of the increasing importance of establishing and maintaining robust procurement governance and probity practices within your organisation as a whole, as well as considering how these practices relate to your specific procurement processes.
The objective of the ANAO Performance Audit was to assess the entity's achievement of value for money and management of probity in its operations and procurement activities, as determined using the following three high-level criteria:
- whether the entity employed open and effective competition, demonstrably achieved value for money and managed conflicts of interest in its procurement of consultants and advisers
- whether the entity effectively managed and controlled the use of credit cards and reimbursement of staff expenses for official purposes
- whether the risks associated with accepting and providing hospitality, gifts or benefits were effectively managed by the entity.
Unfortunately for the entity the ANAO's conclusions were not positive. Fortunately for us, however, the ANAO did include as part of its Audit Report "Key learnings" (including instances of good practice) for all Australian Government entities (replicated below), which your entity can draw from to assist in bolstering its probity practices.
Key learnings for all Australian Government entities
Governance and risk management
- For newly established entities, priority should be given to the development and approval of those policies and procedures that are essential to delivering on the organisation’s purpose. For corporate government entities, the Public Governance, Performance and Accountability Act 2013 and associated guidance provides a sound framework which can be used to develop these policies.
- When engaging consultants and advisers, entities should put in place mechanisms to ensure, where possible, competitive processes are used to maximise value for money. In addition, entities should identify and actively manage probity risks, including conflicts of interest.
- Entities should ensure that their policies include effective processes for identifying the gifts and benefits offered and/or accepted by its employees. The maintenance of a central register may assist entities in implementing these policies and meeting their accountability and transparency obligations. These aspects would be further enhanced by the publication of entity gifts and benefits registers on the internet.
Procurement
- Obtaining value for money through open and competitive procurement processes is aided by the early development of an overarching procurement strategy, the scope of which includes the engagement of advisers and technical consultants and enables adequate planning for tender processes.
- Public disclosure of the planned scope and timeframe of procurement activities, and providing capacity for potential candidates to register their interest, assists to maximise competitive pressure in selection processes and, consequently, with achieving value for money for taxpayer funds.
As concepts, these learnings and instances of good practice are not new ideas to government, and it's quite likely your entity already has similar guidance included in your Accountable Authority Instructions, procurement manuals or other risk management documentation.
However, with the passage of the Government Procurement (Judicial Review) Act into law imminent the ANAO's findings provide a timely reminder of the importance of ensuring that your entity's guidance material, supporting documentation and relevant training programs are clear and up-to-date, and your personnel know their responsibilities and are complying with them.
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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.