After the automatic count was deemed inaccurate, the AEC spent $8.6m for a hand recount © PA Images
After the automatic count was deemed inaccurate, the AEC spent $8.6m for a hand recount © PA Images

AEC failed to get value on $27.2m election contract

22 January 2018

The Australian Electoral Commission (AEC) failed to get value for money from a $27.2m contract to digitally scan and count ballot papers for the 2016 Senate election, an audit has found.

The Australian National Audit Office (ANAO) found the AEC invested $27.2m in technology to automatically scan ballots but ended up spending up to $8.6m to have ballots recounted by hand after the contracted firm failed to meet security requirements. 

In its report, ANAO said the AEC could not demonstrate that it got value for money from the firm contracted to provide the ballot scanning services and security in the service was lacking. 

“The focus was on delivering a Senate scanning system by polling day and insufficient attention was paid to assuring the security and integrity of the data generated both during and after the operation,” it said. 

The AEC said because of the introduction of a new way to allocate Senate voting preferences, it decided that a manual process would be too expensive and engaged the services of Fuji Xerox Document Management Services to create a semi-automated ballot scanning process at a cost of $27.2m.

At the time, potential security risks were raised by Australia’s cyber security agency, Australian Signals Directorate, which found the AEC’s risk management was “not consistently to an appropriate standard”.

Three days before the electronic system was supposed to be ready, the AEC decided to count the Senate ballots by hand because the automatic version was not sufficiently accurate, costing taxpayers around $8.6m. 

In a letter responding to the audit, the AEC told ANAO that due to the tight time frame imposed on the AEC by a number of factors, including recent Senate voting reforms, a double dissolution election and a shorter timeline for the return of election writs, the AEC had scrapped compliance with Australian government IT security frameworks. 

“Because of the highly compressed time frame available for development, it was accepted that certain controls would not be able to be met and would have to be accepted by the agency as a residual risk,” it said.

However, the ANAO said despite the millions handed over, the AEC also “did not own the intellectual or physical property that would result from this expenditure” and the cost included a $4.1m “contribution” to equipment and infrastructure needed to scan the ballots.

The ANAO also found that the AEC had procured Fuji Xerox’s services via a limited tender, even though the AEC said it was determined by an open tender. 

“The documentation on the Senate scanning system procurement indicates that inadequate consideration was given to assessing value for money and did not demonstrate that it was achieved,” it said.

It said the AEC also spent $8.7m to transport the papers to scanning centres, even though it planned to only spend $5.3m, and it had failed to meet its own deadlines, taking 29 days to complete deliveries instead of 18 days.

Overall, the report recommended the AEC implement openly competitive procurement processes, revise its approach to obtaining election-related transport services, take the necessary steps to ensure the AEC remains compliant with IT government security frameworks and verify the findings of future computer-assisted federal electoral events.

Responding to the report, electoral commissioner Tom Rodgers said the AEC understood ANAO’s recommendations and would work to implement them.

“The AEC is committed to achieving value for money in all procurement processes and the AEC is implementing more effective and efficient supply chain management arrangements, including improving the cost and time efficiency of transport,” he said.

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