The Senate Order for Departmental and Agency Contacts (Calender Year 2004 Compliance)
The objectives of the audit were to assess agency performance in relation to compiling their Internet listings as required by the Senate Order and the appropriateness of the use of confidentiality provisions in Commonwealth contracts. The audit involved a detailed examination in seven agencies of the processes used to compile their Internet listings and the use of confidentiality provisions in contracts.
This report outlines the results of the seventh audit of Financial Management and Accountability Act 1997 (FMA Act) agencies' compliance with the Senate Order for departmental and agency contracts (the Senate Order), to list contract details for the 2004 calendar year reporting period on the Internet.
The audit was conducted in accordance with the Senate Order request for the Auditor-General to undertake an annual examination of agency contracts listed on the Internet, and report whether there had been any inappropriate use of confidentiality provisions.
Audit scope and objectives
The objectives of the audit were to assess agency performance in relation to compiling their Internet listings as required by the Senate Order and the appropriateness of the use of confidentiality provisions in Commonwealth contracts.
The audit involved a detailed examination in seven agencies of the processes used to compile their Internet listings and the use of confidentiality provisions in contracts.
The seven agencies selected for review were:
- Australian Customs Service;
- Australian Electoral Commission;
- Department of Family and Community Services;
- Department of Immigration and Multicultural and Indigenous Affairs;
- Department of the Prime Minister and Cabinet;
- Department of Transport and Regional Services; and
- Department of Veterans' Affairs.
The audit found that each of the audited agencies had placed a list of contracts on their website that were, with one minor exception, in accordance with requirements in the Senate Order. In two instances, Ministerial letters had not been tabled in the Senate by the due date of 28 February 2005. The letters were tabled on 4 April and 14 June 2005 respectively.
The audit concluded that the controls and processes for compiling the Internet listing were generally adequate and provided reasonable assurance that the number of contracts reported on the Internet was correct. However, the ANAO considered that these controls could be strengthened by some agencies implementing additional controls such as undertaking a reconciliation between the Senate Order listing and contract information contained in their Financial Management Information Systems (FMIS) and/or their AusTender information. 1
The audit also found that all of the selected agencies had included in their standard Request For Tender documentation and contract templates satisfactory information on the Australian Government's accountability framework, including its policy in relation to confidential information and disclosure to the Parliament and its Committees.
However, guidance to staff with responsibilities for contract negotiations that outlined the requirements of the Senate Order was an area that needed improvement in some agencies, as was the extent and timing of training and/or awareness sessions on the Senate Order requirements.
The ANAO reviewed 53 contracts that were listed on the Internet as containing confidential provisions or ‘other requirements of confidentiality' to determine whether they had been appropriately listed. The ANAO considered that only 14, or 27 per cent, of these contracts satisfied the criteria for protection as confidential information. This low level of compliance is consistent with the overall result for the previous six audits, suggesting that some agencies need to give higher priority to complying with this important requirement of the Senate Order.
The ANAO found that no contract details had been excluded from the Internet listings of the selected agencies for reasons of national security or commercial sensitivity.
Overall, the ANAO concluded that although agencies' Internet listings generally complied with the Senate Order, the percentage of contracts listed as containing confidential information, that were considered by the ANAO as being appropriately listed, was low. This situation could be attributed to inadequate guidance being provided in some agencies to staff with contract negotiation responsibilities, as well as a lack of training and/or the provision of awareness-raising sessions to these staff.
Importantly, the audit found that all the agencies reviewed had included in their templates contract, and the majority of contracts, a clause providing for the disclosure of information to the Parliament and its Committees.
The results of the ANAO's audits over the last three years indicate a need, at least in some agencies, to improve their awareness of, and compliance with, the Senate Order. The need for agencies to revise their procurement and related guidance material in the light of revisions to the Commonwealth Procurement Guidelines (CPGs), that took effect from 1 January 2005, represents a good opportunity for agencies, that have not already done so, to review and as necessary improve their guidance of material relating to the Senate Order. Agencies should also reinforce the importance of compliance with the Order in procurement-related training and awareness sessions undertaken. This is particularly important in circumstances where agencies have a devolved procurement environment where line managers are responsible for the negotiation and management of contracts, including making judgements about the confidentiality of contract provisions.
All agencies agreed with the recommendations. Where provided, agencies' additional responses to each recommendation are provided in the body of the report, and agency responses relating to the report in general are provided at Appendix 3.
1 All agencies subject to the Financial Management and Accountability Act 1997 are required by the Commonwealth Procurement Guidelines to publish on AusTender contracts and standing offers with a value of $10,000 or more.