The Joint Committee of Public Accounts and Audit has released its report on the contract management frameworks operated by Commonwealth entities, which examined whether they are fit for purpose to ensure project delivery and value for money.
The Australian National Audit Office audits examined by the Committee revealed areas of good practice in this regard, underpinned by effective governance. They also exposed deficiencies, including insufficient record-keeping and poor documentation of value for money in contract variations.
The inquiry also highlighted the need for entities to maintain an appropriate arm's length relationship with suppliers and to establish and monitor effective and measurable Key Performance Indicators.
Committee Chair, the Hon Linda Burney MP, stated, 'It became clear from this inquiry that value for money cannot be achieved for the taxpayer if a well-managed procurement process is not followed up with effective contract management.'
The following requirements are among the Committee's six recommendations:
- That the Department of Finance's annual self-assessment survey for contract management capability becomes mandatory, contains clearer indicators of this capability and that corrective action is taken when shortfalls are revealed.
- That the Department of Finance consults with relevant agencies to ensure that guidance and training address weaknesses in contract management, as outlined by the Committee.
- That updates be provided on the management of the My Health Record and the Adult Migrant English Program contracts, and on their upcoming tendering processes.
'The Department of Finance has a pivotal role to play in addressing shortfalls in contract management across the Commonwealth. The Department needs to be more than just a policy steward that provides advice and resources,' Ms Burney said.
The report can be downloaded from the inquiry website.
