Annual Report 2004–05
Management of financial resources
Purchasing
Following the commencement of the free trade agreement between Australia and the United States, a revised version of the Commonwealth Procurement Guidelines (CPGs) was released in January 2005. The department revised the Clerk’s Instructions to reflect changes to the CPGs, and relevant staff in the department were made aware of their procurement obligations.
In June 2005, the department published an annual procurement plan on AusTender (the Australian Government’s web-based electronic tender system). The plan outlines the department’s proposed major purchases in the forthcoming year.
One issue which is developing in the context of the revised CPGs is the expectation of some senators that Australian-made paper should be purchased for senators’ printing. The issue has arisen through questioning at estimates committees, in correspondence from a lobby group and informally in respect of individual purchases. The guidelines prohibit the department from discriminating in favour of or against suppliers on the basis of country of origin. Suppliers must be treated equally, regardless of their ownership, location or size, and products or services must be assessed on the basis of their suitability for the intended purpose, not their country of origin.
The department is committed to achieving best value for money and, in making procurement decisions, assesses products and services using various criteria in accordance with the CPGs.
All goods and services were purchased in accordance with the Financial Management and Accountability Act 1997, the CPGs, the Clerk’s Instructions and the endorsed supplier arrangement. Over 99 per cent of all payments to suppliers were made electronically.
Asset management
In conjunction with the Information Technology and Financial Management sections, the Office Services Subsection is responsible for the effective management of Senate assets.
At 30 June 2005, the department controlled 4,572 assets with a fair value of $4.3 million (last year’s total was 5,092 assets with a total written down value of $16.8 million). Security assets valued at $10.5 million were transferred to the Department of Parliamentary Services on 1 July 2004. All the department’s assets were revalued on 30 June 2005 resulting in a decrement of $0.9 million. In 2004–05, 64 new assets were added and 637 assets were written off.
The majority of the department’s computers and printers are fully written down and are expected to be replaced in 2005–06.
The annual stocktake was conducted in April 2005. On completion of the stocktake, 62 assets with a combined depreciated value of $40,748 had not been located. Of these, 34 had not been found in the previous stocktake and will be written off.
This year’s stocktake result was an improvement on the previous year’s, with a failure rate of 1.4 per cent in terms of asset numbers (3.5 per cent for 2003–04) and 0.7 per cent in terms of depreciated value (1 per cent for 2003–04).
Consultants and competitive tendering and contracting
Consultants
The policies and procedures for selecting and contracting consultancies, and approving expenditure in relation to consultancies, are set out in the Clerk’s Instructions, which have taken account of the CPGs, the Financial Management and Accountability Act 1997 and regulations, and Senate standing order 25(18), relating to approval of consultants for committees.
During 2004–05, seven new consultancy contracts, involving total actual expenditure of $217,060, were entered into. In addition, three ongoing consultancy contracts, involving total actual expenditure of $165,826, were active during 2004–05.
During the year, a total of $316,653 (inclusive of goods and services tax) was paid in relation to consultancy services. Table 5 provides details of consultancy contracts let during 2004–05 to the value of $10,000 or more.
| Consultant name | Description | Contract price ($) | Selection process a | Justification b |
|---|---|---|---|---|
| Eureka Strategies | Survey of senators | 18,645 | Open tender | C |
| KPMG | Internal audit services | 66,233 | Extension of existing arrangement | B, C |
| Michael Griffin Consulting | Professional advice to the Foreign Affairs, Defence and Trade Committee | 82,577 | Selected through expressions of interest sought by the committee | B, C |
| Walter and Turnbull | Review of corporate transactions processing | 29,920 | Extension of existing arrangement | B, C |
a Selection process terms:
Open tender—a procurement
procedure in which a request for tender is published inviting all
businesses that satisfy the conditions for participation to submit
tenders.
Select tender—a procurement procedure in which the
procuring agency selects which potential suppliers are invited to
submit tenders in accordance with the mandatory procurement procedures.
Direct sourcing—a procurement process, available only under
certain defined circumstances, in which an agency may contact a
single potential supplier or suppliers of its choice and for which
conditions for direct sourcing apply under the mandatory procurement
procedures.
Panel—an arrangement under which a number of suppliers,
usually selected through a single procurement process, may each
supply property or services to an agency as specified in the panel
arrangements.
b Justification for decision to use consultancy:
A—skills currently unavailable within agency
B—need
for specialised or professional skills
C—need for independent
research or assessment.
Total expenditure by the department on consultancies in 2004–05 increased by $56,885 from the total for 2003–04. This increased expenditure resulted from one large consultancy entered into during 2004–05, rather than from an increase in consultancy activity.
Competitive tendering and contracting
A memorandum of understanding between the chamber departments and the Department of Parliamentary Services for the provision of security services ceased on 30 June 2004.
The department did not contract out to another organisation the delivery of any other activities previously performed by a Commonwealth agency.