Two case studies illustrate key issues in managing risks associated with probity follow. These have been grouped according to the important aspects of probity most evident in each study.
Case study: ministerial travel claims (probity of process and record keeping)
Source: Australian National Audit Office Performance Audit Report No.23 1997-98, Ministerial Travel Claims Audit.
This audit was undertaken in response to a request from the Prime Minister concerning matters primarily relating to travel allowance claims made by a former minister. The focus of this audit was on the administration of travel claims under the current policy arrangements.
The audit findings stated that: 'The audit highlights the importance of sound administrative processes as a means, not an end, for effective public administration. This is a facet of public administration which does not always receive the profile or attention that it should. Yet sound processes, determined by the application of risk management, are the essential foundations upon which efficient and accountable administration and cost effective outputs and outcomes are delivered.'
'A lack of documentary evidence in this audit meant that the ANAO often had to rely on statements from individuals and their sometimes differing recollections of the same events. In some cases individual's recollections of events changed during the period of the audit and their statements were subsequently revised.'
Risk management issues from Ministerial travel claims case study
The ministerial travel claims study highlighted the importance of record keeping.
The Auditor General stated that: 'Records are consulted as proof of activity by senior managers, auditors, members of the public or by anyone inquiring into a decision, a process or the performance of an organisation or an individual. As such, they are an appropriate example of not only the importance of good process but also how it often contributes importantly to a myriad of outcomes or results.'
'In addition to legislative requirements, there are several other significant reasons for emphasising the importance of recordkeeping in the public sector. Up-to-date, accessible, relevant and accurate records can ensure that decisions made by an agency are consistent, based on accurate information, cost-effective, engender a sense of ownership of decisions throughout the agency, and place the agency in a considerably better position to justify to Parliament and the public any decisions made. It is often not just outcomes that are of concern to Parliament and the public, but also the process of decision-making and the reasons for decisions made.'
'This transparency is achieved by ensuring that the decision-making process, and the reasons for decisions made, are adequately documented by the agency. Transparency through recordkeeping is an agency's first line of defence against accusations of bias and negative public perceptions. It also promotes confidence in the integrity of the [public sector] and allows the public to perceive the [public sector] as making 'value for money' decisions, especially where procurement is concerned, as well as meeting any requirements for fairness, equity, privacy and freedom of information.'
'As [public sector] agencies move into an era of increasing risk and other management challenges brought about by new ways of delivering services such as outsourcing and the greater use of information technology, there is increasing concern about organisations' ability to preserve those records which are needed to support the delivery of programs and services, and to meet their accountability, as well as archival, obligations.'
'Good records that form an accountability trail are the first line of defence against accusations of bias and/or misinformation.'
Speech by Mr P.J. Barrett (AM) Auditor-General for Australia Recordkeeping in Commonwealth Agencies: An Audit Perspective. Delivered 11/08/2000 to the National Archives of Australia Advisory Council.
Case study: Metropolitan Ambulance Service (probity of process)
Source: Thwaites v Metropolitan Ambulance Service Victorian Administrative Appeals Tribunal 1995/4289.
Late in 1993, the Metropolitan Ambulance Service (MAS) decided to contract out its non-emergency stretcher transport services to the private sector so that it might focus attention on its core activities of emergency transport. It entered into short term contracts with six private providers for the provision of such non-emergency services.
In 1994, the MAS decided to enter into longer term contractual arrangements for the provision of these services and placed public advertisements seeking expressions of interest in providing these services. The MAS used a consultancy firm to prepare the tender specification and evaluation methodology, and to conduct shortlisting and tender evaluation processes without any input from MAS. The contractor was also responsible for developing a tender evaluation report for approval by MAS and notifying the unsuccessful tenderers.
As a result of the shortlisting process carried out by the consultants employed by the MAS, eight companies were invited to tender. This included five of the six companies that were interim contractors. The timeframe for the tender response was tight, and the tender stipulated that the contractor would need to be fully operational within one month of the close of tenders and within two weeks of the announcement of the successful tenderers. Eventually, four companies, all of which were interim service providers, were selected to provide the services and were offered long term contracts with the MAS.
Questions about the tender process were raised in the Victorian Parliament. It emerged that the principal consultant who had managed the tender process for MAS was unaware of the Government tender process and that he did not know what the role of the State Tender Board was.
Mr W's role also became public knowledge. An MLA sought access under the Freedom of Information Act to a large number of documents relating to the tender process. The MAS and the contractors refused to provide this information on the grounds that it was confidential and commercially-sensitive information which had been supplied to the MAS in good faith by the tendering businesses on the understanding that such information would remain confidential.
The tribunal released many documents that it acknowledged would normally have been considered exempt from release under the Freedom of Information Act. These included tender responses from each company, the contents of the Tender Evaluation Report and other sensitive information. The justification for releasing this information was given as the public interest requiring disclosure. The public interest issues identified included:
- The time afforded to parties to register an interest in tendering for the provision of the relevant service was brief and thereby, some advantage may have been conferred upon those companies which were already interim services providers. In fact all of the companies with whom longer terms contracts were ultimately negotiated were interim service providers.
- The relevant representative of the consultant running the tender gave evidence to the Tribunal that he was unaware of the Government tender process and that he did not know what the role of the State Tender Board was.
- An officer of MAS who was significantly involved in the task of selection of successful tenderers had a continuing financial obligation in respect of one of the successful companies while the tender process was in progress.
The Tribunal further remarked that 'furthermore, the transfer of a significant ambulance service from its statutorily established provider to profit-motivated private companies is of such public significance that it must be seen to give rise to a high level of entitlement of the public to be well informed as to the circumstances, thereby requiring release not only of information relevant to the
circumstances referred to above but to such other relevant information much of which in other circumstances would be exempt from disclosure.'
Risk management issues probity of process
There is a growing risk to public sector managers that information previously believed to be confidential may be released in the public interest. This is particularly the case in situations of competitive tendering and contracting, and in situations where there is some evidence that there has been a lack of probity in the process.
If a public sector manager has run a good clean process and has kept adequate, contemporaneously created records, this trend should not be a source of concern. However, any public sector manager who has not kept proper records or who has overseen a process that was in any way unfair, lacking in probity or involved in a conflict of interest, has accepted a high level risk. Proper risk treatments for these risks include:
- having a clear understanding of the process which is being managed
- ensuring that processes are applied fairly, equitably and with probity
- keeping adequate records
- employing only skilled and experienced staff and contractors
- having procedures for identifying and dealing with conflict of interest
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