Each of the agencies involved in the audit were provided with the opportunity to comment on the proposed audit report in accordance with the provisions of section 19 of the Auditor‐General Act 1997.
Agencies’ responses to the recommendations have been included in the main body of the report under the subheading ‘Agencies’ responses’ directly following the recommendation. Specific comments in response to audit findings have also been noted in footnotes to the main body of the report.
A summary of the agencies’ responses is provided below.
Department of Families, Housing, Community Services and Indigenous Affairs
Overall, FaHCSIA considers that this report is well targeted and has made sound recommendations which the Department supports. In addition, FaHCSIA looks forward to the Department of Finance and Deregulation reviewing the clarity of the Commonwealth Procurement Guidelines relating to classification of procurement methods. It is pleasing to note that FaHCSIA was recognised as having good practices in several areas covered by the audit.
FaHCSIA continuously reviews its procurement policies and practices to ensure they reflect better practice.
Department of Innovation, Industry, Science and Research
The Department of Innovation, Industry, Science and Research acknowledges the findings of the ANAO Audit of Direct Source Procurement and supports the recommendations proposed in the report. The department found the audit process to be a valuable exercise and is continuing to implement measures to further improve its performance in this area.
Department of Veterans’ Affairs
The Department of Veteransʹ Affairs (DVA) agrees with the overall findings and recommendations of the ANAO report. In regard to the observation that DVA has a lower than average percentage of direct sourcing procurements it should be pointed out that DVA has health services contracts with a value in excess of $4 billion annually which include a large volume of small value
DVAʹs commitment to increasing the number and scope of procurement opportunities offered to the open market.
Australian Crime Commission
The Australian Crime Commission (ACC) agrees with the findings of the audit and will undertake the appropriate action to implement the relevant recommendations.
In response to the findings of the audit the ACC has already implemented changes to its processes to ensure the accuracy and timeliness of reporting contract information on AusTender. In addition to this the ACC is currently undertaking a full review of its procurement framework and guidance material to ensure that it is current and addresses these findings. This review will be followed by a training and awareness program advising staff and delegates of their responsibilities in relation to direct sourcing. It is planned that this training will focus on the findings of the audit, in particular the requirement for adequate documentation to support the justification for direct sourcing and the documented evidence of the approvals.
Department of Finance and Deregulation
This Audit Report highlights practices that are of concern because they indicate a lack of understanding of key rules and procedures in Commonwealth procurement, underpinned by legislation, and an appreciation that these are intended to promote value for money and accountability. These practices included either not estimating the value, or significantly underestimating the value, of a proposed procurement to avoid an open approach to the market, required by Mandatory Procurement Procedures of the CPGs.
As outlined in Appendix 3 of the Report, Finance continues to provide a broad range of support to agencies to assist them to manage their procurement obligations. In addition, Finance is in the process of reviewing its procurement policy guidance to both simplify and better target it towards the specific needs of new procurers, experienced procurers and financial delegates.
Improved understanding and procurement practice within agencies is necessary to support enhanced value for money outcomes. In this regard, Chief Executives could be encouraged to consider providing the central procurement areas of their agencies with clear authority to advise line areas on effective and
DVAʹs commitment to increasing the number and scope of procurement opportunities offered to the open market.
Australian Crime Commission
The Australian Crime Commission (ACC) agrees with the findings of the audit and will undertake the appropriate action to implement the relevant recommendations.
In response to the findings of the audit the ACC has already implemented changes to its processes to ensure the accuracy and timeliness of reporting contract information on AusTender. In addition to this the ACC is currently undertaking a full review of its procurement framework and guidance material to ensure that it is current and addresses these findings. This review will be followed by a training and awareness program advising staff and delegates of their responsibilities in relation to direct sourcing. It is planned that this training will focus on the findings of the audit, in particular the requirement for adequate documentation to support the justification for direct sourcing and the documented evidence of the approvals.
Department of Finance and Deregulation
This Audit Report highlights practices that are of concern because they indicate a lack of understanding of key rules and procedures in Commonwealth procurement, underpinned by legislation, and an appreciation that these are intended to promote value for money and accountability. These practices included either not estimating the value, or significantly underestimating the value, of a proposed procurement to avoid an open approach to the market, required by Mandatory Procurement Procedures of the CPGs.
As outlined in Appendix 3 of the Report, Finance continues to provide a broad range of support to agencies to assist them to manage their procurement obligations. In addition, Finance is in the process of reviewing its procurement policy guidance to both simplify and better target it towards the specific needs of new procurers, experienced procurers and financial delegates.
Improved understanding and procurement practice within agencies is necessary to support enhanced value for money outcomes. In this regard, Chief
Appendix 9
direct link to procurement advice from Finance and are encouraged to participate in proposed developments to the procurement framework and activities.
Series Titles
ANAO Audit Report No.1 2010–11
Implementation of the Family Relationship Centres Initiative Attorney‐General’s Department
Department of Families, Housing, Community Services and Indigenous Affairs
ANAO Audit Report No.2 2010–11
Conduct by Infrastructure Australia of the First National Infrastructure Audit and Development of the Infrastructure Priority List
Infrastructure Australia
ANAO Audit Report No.3 2010–11
The Establishment, Implementation and Administration of the Strategic Projects Component of the Regional and Local Community Infrastructure Program
Department of Infrastructure, Transport, Regional Development and Local Government
ANAO Audit Report No.4 2010–11 National Security Hotline
Australian Security Intelligence Organisation Attorney‐General’s Department
Australian Federal Police
ANAO Audit Report No.5 2010–11 Practice Incentives Program
Department of Health and Ageing Medicare Australia
ANAO Audit Report No.6 2010–11
The Tax Officeʹs implementation of the Client Contact ‐ Work Management ‐ Case Management System
Australian Taxation Office
ANAO Audit Report No.7 2010–11
Confidentiality in Government Contracts: Senate Order for Departmental and Agency Contracts (Calendar Year 2009 Compliance)
ANAO Audit Report No.8 2010–11
Multifunctional Aboriginal Children’s Services (MACS) and Crèches
Series Titles
ANAO Audit Report No.1 2010–11
Implementation of the Family Relationship Centres Initiative Attorney‐General’s Department
Department of Families, Housing, Community Services and Indigenous Affairs
ANAO Audit Report No.2 2010–11
Conduct by Infrastructure Australia of the First National Infrastructure Audit and Development of the Infrastructure Priority List
Infrastructure Australia
ANAO Audit Report No.3 2010–11
The Establishment, Implementation and Administration of the Strategic Projects Component of the Regional and Local Community Infrastructure Program
Department of Infrastructure, Transport, Regional Development and Local Government
ANAO Audit Report No.4 2010–11 National Security Hotline
Australian Security Intelligence Organisation Attorney‐General’s Department
Australian Federal Police
ANAO Audit Report No.5 2010–11 Practice Incentives Program
Department of Health and Ageing Medicare Australia
ANAO Audit Report No.6 2010–11
The Tax Officeʹs implementation of the Client Contact ‐ Work Management ‐ Case Management System
Australian Taxation Office
ANAO Audit Report No.7 2010–11
Confidentiality in Government Contracts: Senate Order for Departmental and Agency Contracts (Calendar Year 2009 Compliance)
Series Titles
ANAO Audit Report No.9 2010–11 Green Loans Program
Department of the Environment, Water, Heritage and the Arts Department of Climate Change and Energy Efficiency
ANAO Audit Report No.10 2010–11 Centrelink Fraud Investigations Centrelink
Current Better Practice Guides
The following Better Practice Guides are available on the Australian National Audit Office website.
Strategic and Operational Management of Assets by Public Sector Entities –
Delivering agreed outcomes through an efficient and
optimal asset base Sep 2010
Implementing Better Practice Grants Administration June 2010 Planning and Approving Projects
an Executive Perspective June 2010
Innovation in the Public Sector
Enabling Better Performance, Driving New Directions Dec 2009 SAP ECC 6.0
Security and Control June 2009
Preparation of Financial Statements by Public Sector Entities June 2009 Business Continuity Management
Building resilience in public sector entities June 2009
Developing and Managing Internal Budgets June 2008
Agency Management of Parliamentary Workflow May 2008
Public Sector Internal Audit
An Investment in Assurance and Business Improvement Sep 2007
Fairness and Transparency in Purchasing Decisions
Probity in Australian Government Procurement Aug 2007
Administering Regulation Mar 2007
Developing and Managing Contracts
Getting the Right Outcome, Paying the Right Price Feb 2007 Implementation of Programme and Policy Initiatives:
Making implementation matter Oct 2006
Legal Services Arrangements in Australian Government Agencies Aug 2006
Administration of Fringe Benefits Tax Feb 2006
Current Better Practice Guides
The following Better Practice Guides are available on the Australian National Audit Office website.
Strategic and Operational Management of Assets by Public Sector Entities –
Delivering agreed outcomes through an efficient and
optimal asset base Sep 2010
Implementing Better Practice Grants Administration June 2010 Planning and Approving Projects
an Executive Perspective June 2010
Innovation in the Public Sector
Enabling Better Performance, Driving New Directions Dec 2009 SAP ECC 6.0
Security and Control June 2009
Preparation of Financial Statements by Public Sector Entities June 2009 Business Continuity Management
Building resilience in public sector entities June 2009
Developing and Managing Internal Budgets June 2008
Agency Management of Parliamentary Workflow May 2008
Public Sector Internal Audit
An Investment in Assurance and Business Improvement Sep 2007
Fairness and Transparency in Purchasing Decisions
Probity in Australian Government Procurement Aug 2007
Administering Regulation Mar 2007
Developing and Managing Contracts
Getting the Right Outcome, Paying the Right Price Feb 2007 Implementation of Programme and Policy Initiatives:
Making implementation matter Oct 2006
User–Friendly Forms
Key Principles and Practices to Effectively Design
and Communicate Australian Government Forms Jan 2006
Public Sector Audit Committees Feb 2005
Fraud Control in Australian Government Agencies Aug 2004 Better Practice in Annual Performance Reporting Apr 2004 Management of Scientific Research and Development
Projects in Commonwealth Agencies Dec 2003
Public Sector Governance July 2003
Goods and Services Tax (GST) Administration May 2003
Building Capability—A framework for managing
learning and development in the APS Apr 2003
Performance Information in Portfolio Budget Statements May 2002 Some Better Practice Principles for Developing
Policy Advice Nov 2001
Rehabilitation: Managing Return to Work June 2001
Building a Better Financial Management Framework Nov 1999 Building Better Financial Management Support Nov 1999
Commonwealth Agency Energy Management June 1999
Controlling Performance and Outcomes Dec 1997
Protective Security Principles
(in Audit Report No.21 1997–98) Dec 1997