Two public servants cleared of ‘improper’ conduct, but procurement procedures ‘not fit for purpose’: ICAC

by | Apr 29, 2021 | Business, News | 0 comments

The NT Government’s procurement processes are susceptible to corruption and have not been fixed for more than a decade despite repeated incidents, an Office of the Independent Commissioner Against Corruption report into alleged “improper” conduct has found.

The ICAC investigated the conduct of two public service employees in an unnamed department over allegations the staffers manipulated a select tender procurement.

The investigation concluded that while the staffers had failed to adhere to best practice, “there was insufficient evidence of unsatisfactory conduct”.

However, it pointed to bigger issues with government procurement processes that were “either not fit for purpose and/or poorly understood by public officers”.

This is despite 19 Auditor General reports – including 10 under the current Gunner Government – that found multiple incidents of lack of compliance with procurement directions and policies since 2010.

Commissioner Ken Fleming said allegations of improper procurement processes undertaken by the public service make up 20 per cent of all reports to his office.

“Given that the Northern Territory Government procures $1 billion of goods and services annually, there is a serious risk of improper conduct if fraud and corruption controls – and procurement legislation, policies and rules – are not fit for purpose, out of date, or not complied with,” he said in a statement.

Details of the specific case investigated were sparse. It was not revealed what department the two staffers worked for nor what project was alleged to have been involved.

The investigation found that “despite the tender arguably being a tier three procurement because of its value”, a two-member panel was convened instead of the required three members.

The contract was ultimately awarded to one company despite another company receiving a higher score on a “value for Territory” internal spreadsheet. That form was later amended to show the first company was the highest scorer.

However, the investigation, which was carried out by deputy commissioner Rex Wild, found “there was insufficient evidence of unsatisfactory conduct” against the two public servants on the panel.

“However, I find that the officers had engaged in conduct that did not comply with the rules and governance of the procurement function, best described as failing to adhere to best practice,” Mr Wild wrote.

The report offered nine recommendations for reforming procurement processes, including considering risks in procurement and allocate resources to prevent it, simplifying the existing processes, and improving training across all of government.

It also recommended the NT Government “consider the findings and recommendations from previous Auditor Generals’ reports on procurement compliance and incorporate these findings into any reforms”.

Questions to Chief Minister Michael Gunner, including whether the government will take the ICAC’s procurement reform recommendations on board, went unanswered.

Mr Gunner’s office also did not say why his government has ignored 10 Auditor General reports into improper procurement processes since 2016.

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