WA audit slams sloppy ICT procurement

WA audit slams sloppy ICT procurement

Summary: Western Australian auditor-general Colin Murphy has wagged the finger at five out of six agencies that took part in a recent study of ICT procurement services after finding lax business plans, poor contract management practices and a failure to identify potential conflicts of interest during the bidding process.

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Western Australian auditor-general Colin Murphy has wagged the finger at five out of six agencies that took part in a recent study of ICT procurement services after finding lax business plans, poor contract management practices and a failure to identify potential conflicts of interest during the bidding process.

Murphy, in his report handed to WA Parliament today, investigated the state Department of Education, the Department of Mines and Petroleum (DMP), Landgate, Lotterywest, Synergy and Tourism WA for how well the six obeyed ICT contractor procurement guidelines.

"We expected to find appropriate governance arrangements in place, and that the procurement of ICT contractors complied with relevant legislation ... [Department of Finance's] procurement guidelines and agency policies," the auditor said in his report.

Murphy found in his review, however, that only Landgate managed its ICT procurement effectively, while other agencies fell behind in their procurement practices, especially those that ensured the best value for money.

"DMP, Lotterywest, Synergy and Tourism WA lacked either comprehensive or up-to-date strategic ICT plans. Each of these agencies had some elements of a strategic ICT plan in place; however, these were often out of date, did not clearly align ICT projects and sourcing strategies with identified current and future business needs, did not include resourcing requirements, lacked clear objectives and associated performance measures [and] did not address risks of different ICT delivery options or strategies to mitigate them," the audit report read.

The audit added that DMP, Lotterywest and Synergy failed to comply with current procurement guidelines, for example obtaining ministerial permission for changes in project scopes.

"Synergy obtained ministerial approval for a $38 million contract arrangement as required. However, Synergy reduced the scope of this work to $21 million. Synergy then entered into further arrangements, including some work beyond the original scope, valued at over $30 million, and did not obtain ministerial approval," Murphy found.

Other agencies, meanwhile, failed to adequately identify and manage conflicts of interest, including proper recording and management of gifts given to agency procurement personnel at the Department of Education and Synergy.

Murphy recommended that the agencies rectify such issues by complying with ICT procurement policies, maintaining strategic ICT procurement business plans and staying on top of gifts and potential conflicts of interest.

Each agency responded to the auditor-general positively, and pledged a fix for the issues, while Synergy said that its fixes were already well underway.

"Synergy has now implemented a new Contract and Procurement System (CAPS) to provide ongoing management and oversight of procurement activities. A new CIO has been appointed to oversee development of an ICT strategy and operational plans. A Project Investment Council has been established, providing strong and effective project gate keeping, and project management training has been improved and increased. Gift and conflict of interest registers have been established," the agency said in its response.

The auditor-general said that the correct handling of ICT procurement by these agencies is crucial, due to the sheer cost involved in their purchase. Murphy estimated that the total expenditure on ICT goods and services in 2009-10 exceeded $360 million.

Updated at 3:52pm, 13 September 2011: clarified the auditor's concerns about DMP.

Topics: Government, CXO, Government AU

Luke Hopewell

About Luke Hopewell

A fresh recruit onto the tech journalism battlefield, Luke Hopewell is eager to see some action. After a tour of duty in the belly of the Telstra beast, he is keen to report big stories on the enterprise beat. Drawing on past experience in radio, print and magazine, he plans to ask all the tough questions you want answered.

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