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17 August 2011 | Angeline Albert
Australian government’s spending watchdog has been criticised for not following
its own purchasing compliance rules over a nine-month period.
internal audit, made public this month following a freedom of
information request, has revealed the government’s Departmentof Finance and Deregulation failed to meet its own
compliance rules in 19 procurements out of a sample of 27 that occurred between
1 July 2009 and 31 March 2010.
by PricewaterhouseCoopers, which focused on
purchasing operations at the government department, found procurement
processes did not encourage competition in accordance with Commonwealth Procurement Guidelines (CPGs and Operational Government Rule 4.3 (OG 4.3)) issued by the department.
included poor value for money, poor risk assessments and discrimination based
The report said finance officers
were unclear about direct procurements, uncertain about the requirements for
completing self assessments for procurements valued below AUD $80,000 (£51,283),
and there was the potential that finance “may not be able to successfully
defend a challenge to a procurement process, due to insufficient
documentation”. Auditors said buyers needed to “read up and follow the department’s guidance for procurement”.
The report said: “A supplier’s
location cannot be a factor in a procurement decision and therefore should not
be referred to in procurement documentation.”
said approval documentation for the 24th procurement was non-compliant because it included the statement: “UNIFY Solutions
Pty Ltd are therefore the only organisation in the Canberra region that can
effectively and efficiently provide support services…”.
In addition, 17 of the 27 procurements
tested were inaccurately reported on AusTender, the
government procurement portal. Auditors recommended compliance education for finance staff for future
procurements, including clarity on the importance of encouraging competition
and reporting accurate information on AusTender.
A spokesman for the Department of Finance and Deregulation said: “The vast majority of findings related to non
compliance with internal guidance, and are not breaches of the Financial Management and Accountability Act
1997 or the CPGs.
“We have initiated a
procurement process improvement project to update guidance and templates, and are
reviewing training and communication of this material to help staff follow
internal guidance. The department has also recently introduced a Basic
Contract Documentation Suite to assist all agencies procure low-risk, low-value
contracts up to $80,000. This will help improve compliance.”