Three key NSW agencies have been slapped down by the state’s auditor-general for failing to comply with procurement probity policies and ensure they are getting value for money.

The Procurement Board requires agencies to engage probity practitioners to provide guidance on integrity, fairness and accountability during the procurement process and ensure it is in keeping with best practice – and the law.

However the audit found Transport NSW, the Education Department and NSW Health and their associated agencies tended to rely on a limited number of external probity service providers and did not always manage the independence and conflicts of interest of probity practitioners transparently.

“We found instances where each of the three participating agencies had not fully complied with the requirements of the NSW Procurement Board  … when they engaged probity practitioners,” the report concludes.

“We also found they did not have effective processes to achieve compliance or assure the engagements achieved value for money.”

It recommended they review their probity policies to use probity practitioners more effectively.

“Probity is important for NSW government agencies as it helps ensure decisions are made with integrity, fairness and accountability, while attaining value for money,” acting auditor general Ian Goodwin said.

Mr Goodwin said NSW has more infrastructure projects than any other state or territory, making public sector probity crucial.

Lack transparency on conflict of interest

Despite this the audit found the agencies did not always transparently manage conflict of issues or evaluate whether they were getting value for money.

It also found there were no professional standards or capability requirements for probity practitioners and of the 40 bodies surveyed, 25 didn’t provide probity training, 39 didn’t report on their use of probity practitioners and 14 didn’t have any internal officers.

Meanwhile, the agencies were “predominantly engaging the same three suppliers” and were failing to provide sufficient access to records and meetings.

It also found the NSW Procurement, the body that is supposed to support agencies in meeting business outcomes, did not effectively monitor agencies’ compliance. In fact it had not asked any agency to report on the use of probity practitioners since 2013.

More support needed

Agencies needed  better probity guidance and support from central agencies, the report said.

“A coordinated effort by the Department of Premier and Cabinet and Gateway Coordination Agencies is needed to support agencies manage probity engagements, achieve better probity outcomes and ensure engagements represent value for money,” Mr Goodwin said.

“The NSW Procurement Board also has a role in setting minimum expectations through the pre-qualification scheme for probity providers’ qualifications, capabilities and experience in probity risk management.”

Transport for NSW CEO Rodd Staples, Department of Education secretary Mark Scott and NSW Health Secretary Elizabeth Koff all said they would consider the recommendations to review and revise probity policies.

Secretary of the Department of Premier and Cabinet Tim Reardon said the upcoming move of NSW Procurement into Treasury created “an ideal opportunity to review whether the current guidance on the engagement of probity advisers … remains fit for purpose.”

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