Chapter 10: Purchasing and Asset Management

Purchasing Policy

The Department of Finance and Administration's (Finance) procurement framework reflects the core principle governing Australian Government procurement - value for money. The department's approach to the procurement of all goods and services including consultancies is consistent with the requirements of Commonwealth Procurement Guidelines - January 2005-Financial Management Guidance No.1 (CPGs). The CPGs are applied to Finance's activities through the Chief Executive's Instructions (CEIs) and supporting operational guidelines.

Finance's procurement policies and processes have been designed to help ensure that the department undertakes competitive, non-discriminatory procurement processes; uses resources efficiently, effectively and ethically; and makes decisions in an accountable and transparent manner. Responsibility for procurement in Finance is devolved to individual business groups. The department supports the decentralised approach to procurement by providing information and training about procurement policies and procedures to all staff, and maintaining a single point of contact for staff to seek advice on the CPGs, Finance's CEIs and tendering processes. Finance has also developed standard tendering and contracting documentation to ensure consistent procurement practices are employed across the department.

The department has established a framework for managing risks in respect of procurement activities and has operational guidelines to support staff assessing the risks associated with their projects. The department's CEIs require that risk assessments be undertaken for all procurement activities and formal risk assessments are required for complex or high-risk procurement. Finance's Internal Audit Unit conducts probity reviews of all procurement arrangements that are assessed as high risk or valued over $250,000. During 2005-06, the Internal Audit Unit conducted sixty-six probity reviews to provide assurance that final purchasing outcomes were in accordance with the CPGs, CEIs and departmental probity and procurement guidelines. In all cases the Internal Audit Unit worked with management to address any risks or potential compliance issues identified by these reviews before the procurement opportunities were advertised.

The CPGs require the publication of details of certain agency agreements and Commonwealth contacts on AusTender, but provide that "if the Chief Executive of an agency decides that details of an agency agreement or Commonwealth contract (including a standing offer) are exempt matters under the Freedom of Information Act 1982, the Chief Executive may then direct, in writing, that the details are not to be published". During 2005-06, the Secretary did not issue any such direction.

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