The objectives of the audit were to assess agency performance in relation to compiling the Internet listings by the Senate Order and the appropriateness of the use of confidentiality in Commonwealth contracts.
- Aboriginal and Torres Strait Islander Service
- Australian Public Service Commission
- Commonwealth Superannuation Administration
- National Archives of Australia
- Commonwealth Ombudsman
- CrimTrac Agency
- Australian Security Intelligence Organisation
- Australian Secret Intelligence Service
- Other agencies
This report relates to the sixth 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 2003 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 to report whether there had been any inappropriate use of confidentiality provisions. Previous audits were conducted on a twice-yearly basis, as required by the Senate Order request at that time.
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 detailed review of the processes used to compile the Internet listings and of the use of confidentiality provisions in contracts.
The six agencies selected for detailed review in this audit were the:
- Aboriginal and Torres Strait Islander Service (ATSIS);
- Australian Public Service Commission (APS Commission);
- Commonwealth Ombudsman (Commonwealth Ombudsman);
- Commonwealth Superannuation Administration (ComSuper);
- CrimTrac Agency (CrimTrac); and
- National Archives of Australia (NAA).
The focus of the audit in relation to confidentiality was on the commercial information that could be protected as confidential information.1 The ANAO recognised, however, that agencies might have reported the need for confidentiality for other reasons; for example, because it was information with a national security classification and/or personal information.
The ANAO found that, by the time the audit was completed, 83 FMA Act agencies2 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. As a result, they were not required to list details of contracts on the Internet. The majority of lists generally complied with the requirements of the Senate Order. However, there was scope for agencies to improve the presentation of the lists so that they met the requirements of the Order and were in accordance with guidance provided by the Department of Finance and Administration.
In relation to the six agencies subject to detailed audit, all had placed a list of contracts on their website by the due date. The ANAO concluded that the processes used to compile the Internet listing, in most agencies, provided a reasonable level of confidence that the number of contracts reported on the Internet was likely to be correct. However, the ANAO found that, in two agencies, the internal controls needed to be improved for the agencies to be assured that the correct number of contracts was listed on the Internet.
In addition, the ANAO could not be certain that all contracts listed had been appropriately identified as containing confidential provisions. This was because the identification of such provisions was done at the time of preparing the Internet list rather than at the contract negotiation stage. All agencies advised that they would be implementing the appropriate controls in the near future.
At the time of audit, none of the selected agencies had implemented changes to their policy and guidance documentation to reflect the new accountability environment for contracting. This new accountability environment, amongst other things, requires both parties to a contract to agree what information, if any, should be protected as confidential prior to the contract being entered into.
However, by the time the audit concluded, all the selected agencies had revised, or were in the process of revising, relevant elements of their general contracting practices, policy guidance, tender documentation and contract templates. As identified in previous ANAO audits of the Senate Order, the understanding of how to implement these changes was not uniform across, or within, agencies.
The ANAO reviewed 26 contracts that were listed on the Internet as containing confidential provisions to determine whether they had been listed appropriately.
The ANAO considered that eleven of the 26 contracts (42 per cent) listed as containing confidential provisions were likely to satisfy the criteria for protection as confidential information. This is an improvement on the results from the previous audits where the percentage of contracts that the ANAO considered had been appropriately listed as containing confidential provisions ranged from 15 to 38 per cent. The other 15 contracts were inappropriately listed because there was no information in the contract that satisfied the criteria for protection as confidential information.
The results of this audit highlight the requirement for agencies to continually review their policies on the new accountability environment so that they accord with the Government policy of the time. In addition, agencies should make sure that the policies are known, and acted upon, at all levels within the agency. This reinforces the need for on-going awareness raising action, including the implementation of formal staff training.
The ANAO examined a selection of contracts excluded from the Internet listing, and concluded that the contracts had been excluded appropriately for reasons of national security and commercial sensitivity.
Comments from the audited agencies
The comments provided by each of the selected agencies in response to the audit report are shown in Appendix 5.
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1 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 FPA Committee's inquiry was the Senate's concern that information was being withheld from the Parliament for reasons of commercial confidentiality.
2 During the Senate Order reporting period, there were 86 FMA agencies identified by reference to the FMA Act list provided on the Finance website. There were 83 FMA Act agencies that were required to, or had agreed to, comply with the Senate Order for the 2003 Calendar Year reporting period. Details of the other three agencies are provided in Chapter 2 of the report.