ANAO scrutinises Services Australia in furniture procurement

A recent audit by the Australian National Audit Office (ANAO) has put Services Australia under scrutiny after its failure to demonstrate value for money and non-compliance with procurement guidelines when procuring office furniture. 

The audit report revealed that the organisation frequently approached a single supplier for furniture procurement. This disregard for internal guidelines on engaging multiple vendors limited the department’s ability to obtain competitive prices and showcase cost-effectiveness. 

The report, which also investigated the Department of Home Affairs’ procurement practices, affirms the organisation’s procurement decision-making as generally transparent and accountable. 

Services Australia and Home Affairs were identified as two of the federal government’s top five spending departments for office furniture. During the five-year audit period, Services Australia accounted for approximately $180 million and 1.7 million for the Department of Home Affairs. 

Services Australia was also criticized for poor record keeping, inadequate price evaluations, and a failure to manage conflicts of interest. In contrast, the Department of Home Affairs had robust processes to address conflicts of interest and did not grant undue advantages to existing contractors during procurement. 

ANAO also reproached Services Australia for failing to adhere to regulations by establishing a contract at a predetermined price prior to finalizing the purchase of items from a sole supplier. ANAO  then advised the organisation to enhance the quality of its records and approval processes. 

Services Australia has responded to the audit by acknowledging the shortcomings identified and emphasizing its commitment to strengthening processes and controls to ensure value for money in future procurements. 

It remains to be seen how the organisation will address these criticisms and implement measures to improve transparency, competition, and cost-effectiveness in its furniture procurement practices moving forward.