Tourism Australia has been severely criticised in a recent Audit Office report covering governance, tenders and contract management.
The report examined three tenders for creative development, media placement and digital services (website). Complaints were received and a series of reviews were implemented before the issue was referred to the Auditor-General.
The Auditor found serious problems with the first two tenders:
- Conflict of interest procedures were not sufficient. There was a lack of transparency in the evaluation of tenders, and the Board of TA did not adhere to conflict of interest guidelines;
- Insufficient emphasis was given to the financial viability of tenderers; and
- The risk management framework was inadequate, particularly in relation to consideration of corporate risk.
The Auditor found TA had procurement guidelines in place, but these guidelines were not adhered to. There was a significant gulf between theory and practice.
In particular, the agency did not have a risk management plan in place to address the corporate risks associated with the procurement. The Auditor highlighted the need for agencies to implement a corporate approach to risk, not one that just addresses the risks associated with a particular project. The three tenders that were the subject of this audit accounted for 35% of the total agency budget, and were therefore critical to the business of the organisation.
While there are unlikely to be any specific changes to public sector procurement guidelines as a result of this Audit report, its clear public sector managers need to consider the corporate context of developments and procurements, not just the risk of individual projects.
Public Sector Governance: Showing the Way
Continuing the issue of public sector governance, in a recent speech, Auditor-General Ian McPhee identified the implementation of public sector governance as a critical challenge for most agencies.
Describing some of the challenges facing public sector organisations, he said that delivering on expectations in this environment can only be managed by sound governance arrangements. “There is not other way”.
The Auditor emphasised the importance of implementation. “... the challenge in the APS is generally not the governance framework but its implementation. Because attention to those matters isn’t always seen as the most glamorous part of public administration, providing the leadership and setting the right tone is critical to success.”