The Victorian Auditor-General’s Office (VAGO) tabled an independent assurance report to Parliament on 20 June 2024 titled “Assuring the Integrity of the Victorian Government’s Procurement Activities“.

This report examines procurement practices within Victorian government departments, highlighting key areas for improvement and offering recommendations to ensure integrity and probity in public sector procurement.

In this blog series, we have summarised:

• Key aspects of the VAGO report, its recommendations, and lessons learned (Part 1).
• Processes for identifying, disclosing, and managing conflicts of interest to reduce risks to the integrity of procurement activities (Part 2).

In this final instalment of our three-part blog series, we examine VAGO’s insights into the support mechanisms necessary for effective procurement. The report highlights several areas where departments and agencies can enhance their procurement support structures, including procurement approvals documentation, evaluation criteria, procurement document approvals, and probity principles.

Procurement Approvals

VAGO identified a higher risk of fraud and corruption at certain approval stages in the procurement process:

• When departments approve a new procurement, there is a risk that staff may not keep the appropriate paperwork or document decisions.
• When a department approves a new supplier, there is a risk that staff may not submit the appropriate paperwork to support the decision.

VAGO also distinguished between approval to enter into a contract and approval of the evaluation panel’s recommendation of a preferred supplier.  Based on this, it is recommended that documentation and/or online workflow systems clearly specify which approval is being sought.

Identified Gaps in Procurement Document Approvals

The VAGO report identifies weaknesses in the approval processes for procurement documents. Departments must record approvals at key stages in the procurement process to maintain transparency and ensure compliance with procurement policies. VAGO reported that:

• market strategies for 3 procurements were not approved and of these, one did not get documented approval until the stage for awarding the contract
• one procurement did not have approval for awarding the contract but the tender evaluation team’s report on the outcome of their evaluation was approved
• none of the 8 evaluation plans we looked at were approved.

Effective approval mechanisms are crucial for ensuring that procurement activities are conducted consistently and in compliance with policies and procedures.

Evaluation Criteria

The VAGO report referred to a Victorian Government Purchasing Board (VGPB) procurement guide suggesting that departments include in their evaluation plans the methods for assessing a tender offer against the evaluation criteria. This is important for verifying that the offer meets requirements and informing risk assessments.

VAGO reported that most departmental policies provide guidance about criteria weightings, specifically, “what the procurer must consider when deciding how much weight to assign to due diligence checks when completing a value-for-money assessment.” Clear and well-defined evaluation criteria are essential for ensuring fairness and transparency in procurement decisions.  Risks identified through due diligence enquiries and reference checks are often risk-assessed but not typically reflected in the scores for weighted evaluation criteria.

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A participant in the UN Global Compact, CourtHeath seeks to raise awareness about the sustainable development goals and the principles of the Global Compact with business and government organisations in Victoria. The elimination of all forms of discrimination in respect to employment and occupation is Principle 6 of the Global Compact. The Global Compact repudiates labour discrimination internationally.

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