Lessons Learned: PERFORMANCE AUDIT REPORT - Procurement of Office Furniture

The Australian National Audit Office (ANAO) published a report on 14 June 2023 on an audit of the procurement of office furniture, between 2017-2022, for the Department of Home Affairs (HA) and Services Australia (SA). This intention of the audit was to increase transparency of procurement frameworks and ensure that HA and SA were effective in undertaking their respective procurement activities as per the Commonwealth Procurement Rules (CPRs). A total of 58 procurements of office furniture were reviewed in this audit: 40 for SA and 18 for DHA. The key findings resonate with Synergy Group's Strategic Sourcing team, who actively work with clients to deliver business outcomes, with adherence to better practice principles central to our work.

RATIONALE FOR UNDERTAKING AUDIT

Between 2017-2022, the Australian Government spent over $355 million on office furniture across government. HA and SA ranked in the top five government entities with the highest contract value for office furniture. In this period, SA had 990 contracts on AusTender with a total value of $180 million, which was over 51% of the total contract value. HA had 28 contracts with its leasehold providers.

AUDIT OBJECTIVE AND CRITERIA

The aim of this audit was to determine whether HA and SA applied the CPRs in an effective manner in their procurements of office furniture and whether they achieved value for money. To answer this objective the following criteria was used:

• Whether the procurement process for office furniture demonstrated the achievement for value of money.
• Whether the decision-making and expenditure has been accountable and transparent.

RECOMMENDATIONS

The ANAO provided recommendations to SA and not HA since HA were seen to be compliant with the CPRs in the procurement practices.

• To strengthen processes for procurement planning, including the establishment of panel arrangements, ensuring officials give thorough consideration value of money and an understanding of the purpose of a procurement to align with the CPRs.
• To implement processes for officials to evaluate value of money for procurements, including orders off panels consistent with its scale, scope and risk, especially when opportunities to show value for money through competitive pricing are limited or not available.
• Implement guidelines to review its procurement processes to evaluate if panels are achieving value for money before extending an existing panel or when establishing for new panels.
• Consider external panels or alternative procurement methods before extending an existing panel or when establishing new panels.

LESSONS LEARNED

Procurement within the Australian Government is currently under the watchful eye of the public. It has also been under the watchful eye of the Joint Committee of Public Accounts and Audit (JCPAA). This is evidenced by the publication of their August parliamentary inquiry report on Commonwealth procurement, which has served as a reminder for the Commonwealth to always keep ensuring value for money at the forefront of its mind.

While not a part of the JCPAA's enquiry noted above, this recent audit of HA and SA's office furniture procurement presents an additional opportunity to reconsider Commonwealth procurement practices to ensure alignment with best practice.

To begin this process, there are pertinent lessons here that should be used to catalyse the Commonwealth's consideration and critical reflection of its procurement practices:

• Clear objectives - Prepare and Beware:
  • Understand your business outcomes and the purpose of procurement.
  • Are there any foreseen risks that you can mitigate before going to market? Are the desired business outcomes appropriately reflected in the scope of work? Is your scope of work specific enough?
• Establish - Proper Contract Management:
  • Establish effective contract management practices to track deliverables, manage risks, and ensure compliance with contractual terms and conditions.
• Ensure Compliance and Accountability:
  • Ensure compliance with relevant laws, regulations, and policies concerning procurement. Seek internal legal advice where required.
• Evaluate and Incorporate Learning:
  • ​​​​​​​Act on the findings and recommendations of audit reports, incorporating lessons learned to improve future decision-making and procurement practices.

As procurement practitioners at Synergy Group, our role is to provide our clients with a quality service that ensures effective planning, transparency, accountability, and value-for-money consideration in our procurement process. Moreover, we aim to uplift and train public service capability to ensure these practices are sustained over time.

In a moment where an intense focus is being directed toward ensuring optimal value for money within the public sector, it is imperative to treat procurement practices with the utmost seriousness as they play a pivotal role in ensuring the efficient allocation of resources and transparent utilisation of public funds.