Government departments not getting value for taxpayers

QUEENSLAND auditor-general Andrew Greaves has handed down a scathing report criticising three government departments for not securing the best value for money for taxpayers when dealing with goods and services contracts.

The report, which was tabled in State Parliament on today reviewed 62 contracts and concluded the departments had not consistently demonstrated they achieved value for money from their goods and services contracts, or got the best solution for the best price.

The three audited departments included Community Safety, Housing and Public Works as well as Transport and Main Roads.

Mr Greaves said deficiencies in governance arrangements and contract management systems hindered the audited departments' ability to plan effectively for contract expiry.

"By not flagging in advance that a contract was due to expire, the departments did not give themselves enough time to plan for contract expiry and were more likely to extend without confirming that the current arrangements were achieving value for money," he said.

"These capability gaps, combined with inadequate contract management systems, will make it more challenging for PTD (government tendering system) to achieve its objective of obtaining maximum value from government spending."

Mr Greaves said the departments had not consistently assessed supplier performance during the life of the contracts.

Furthermore, he found 27 contracts did not receiving any monitoring at all.

"Of the 62 contracts examined the departments regularly monitored the KPIs of 21 contracts," he said.

"Research shows that ineffective contract management can result in lower value for money over time.

"The lack of regard given to supplier performance at contract establishment, and inconsistent performance monitoring throughout the life of the contract, put at risk the ability to achieve value for money."

Mr Greaves recommended all departments develop and implement a contract management framework to ensure the respective department had sufficient and appropriate resources to manage contracts effectively, develop and apply a risk/value approach to contracts, validate a contracts value for money before extending it or renewing it by actually reviewing it and implement a contract management life-cycle system.

The directors-general of all three departments wrote to the auditor-general to confirm steps had been taken to address his recommendations and findings.