The Senate Order for Departmental and Agency Contracts (Autumn 2003)
This report relates to the fourth audit of Financial Management and Accountability Act 1997 (FMA Act) agencies' compliance with the Order of the Senate for Departmental and Agency Contracts, (the Senate Order) to list, on the Internet, contract details for the reporting period 4 February 2002 to 3 February 2003. The audit was conducted in accordance with the Senate Order request for the Auditor-General to undertake twice-yearly examinations of agency contracts listed on the Internet, and to report whether there had been any inappropriate use of confidentiality provisions. The objectives of the audit were to assess agency performance in relation to compiling the Internet listings required by the Senate Order and the appropriateness of the use of confidentiality provisions in Commonwealth contracts.
This report relates to the fourth audit of Financial Management and Accountability Act 1997 (FMA Act) agencies' compliance with the Order of the Senate for Departmental and Agency Contracts, (the Senate Order) to list, on the Internet, contract details for the reporting period 4 February 2002 to 3 February 2003.
The audit was conducted in accordance with the Senate Order request for the Auditor-General to undertake twice-yearly examinations of agency contracts listed on the Internet, and to report whether there had been any inappropriate use of confidentiality provisions.
The objectives of the audit were to assess agency performance in relation to compiling the Internet listings required by the Senate Order and the appropriateness of the use of confidentiality provisions in Commonwealth contracts.
Audit scope and focus
The audit involved a desktop review of all FMA Act agencies to enable the ANAO to report on the information provided on the Internet. In addition, the ANAO selected six agencies for more detailed review of the processes used to make the Internet listings and of the use of confidentiality provisions in contracts.
The six agencies selected for detailed review in this audit were the:
- Australian Federal Police (AFP);
- Australian Greenhouse Office (AGO);
- Department of Defence (Defence);
- Department of Employment and Workplace Relations (DEWR);
- Department of Family and Community Services (FaCS);1 and
- National Capital Authority (NCA).
The focus of the audit in relation to confidentiality was on the commercial information that could be protected as confidential information.2 The ANAO recognised, however, that agencies might have reported confidentiality for other reasons, for example, because it was information with a national security classification or personal information.
The ANAO found that, by the time the audit was completed, 78 agencies3 had either placed a list of contracts on their websites, or did not have any contracts that fell within the scope of the Senate Order and, as a result, were not required to list details of contracts on the Internet. The majority of lists generally complied with the requirements of the Senate Order although there was scope for agencies to improve the presentation of the lists.
In relation to the six agencies subject to detailed audit, all had placed a list of contracts on their website by the due date.
In five agencies, the ANAO concluded that the processes used to compile the Internet listing were generally likely to lead to the lists being complete in terms of the number of contracts listed.
In his tabling letter in March 2003, the Minister for Defence advised the Senate that Defence's list of contracts on the website was not a complete list for the relevant period, nor did it identify contracts as containing either confidential provisions or other requirements of confidentiality. However, the ANAO concluded that Defence's establishment of an interim contracts register, and its consideration of the development of an enhanced contract database, will assist Defence to progressively comply with the requirements of the Senate Order.
All six agencies audited had revised their general contracting practices, policy guidance, tender documentation and contract templates to reflect changes to Government policy, including the requirements of the Senate Order. However, as identified in previous audits on this topic, the understanding of how to implement these changes was not uniform across, or within, agencies.
The audited agencies generally had processes in place to determine whether information in contracts should be protected as confidential and, in over half the contracts reviewed, had specifically identified what information was to be protected as confidential information, an essential element for agreeing to protect information.
The ANAO selected a sample of 20 contracts of the audited agencies for review. All had been entered into after the Senate Order had been amended in September 2001 and after agencies had started to put in place changes to contracting policies and procedures to meet the requirements of the new accountability framework. The ANAO considered that only six of the contracts reviewed had been appropriately listed on the Internet as containing information that was likely to satisfy the criteria for protection as confidential information.
As the contracts were not selected on a statistical basis, the ANAO cannot make a definitive comment on the appropriateness of the listing of contracts with confidential provisions within the selected agencies and across all FMA Act agencies. However, the results from this and previous audits suggest that, although agencies have made changes to their policies and procedures to address the issue of protecting contractual information as confidential, all agencies must continue efforts to ensure that their policies are both regularly reviewed to accord with Government policy, and reflected in their practices.
Comments from the audited agencies
The comments provided by each of the audited agencies in response to the audit report are shown in Appendix 6 of the report.
1 The audit of FaCS focused on the contract listing for FaCS only, and did not include the other agencies in the Family and Community Services portfolio (Centrelink, Child Support Agency and the Social Security Appeals Tribunal).
2 The actual wording of the Senate Order does not specifically refer to commercial information. However, the basis for the original Senate Motion and the holding of the Senate Finance and Public Administration References Committee's inquiry was the Senate's concern that information was being withheld from the Parliament for reasons of commercial confidentiality.
3 At the time of the audit, there were 81 FMA Act agencies. Details of the other three agencies are provided in Chapter 2 of this report.