The federal government's central welfare agency has been slapped on the wrist for failing to show value for money on its $180 million office furniture bill.
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The millions in government funds were spent on purchasing new work stations and chairs for Services Australia over the five-year period between July 2017 and June 2022 and represent more than half of the $355 million reported against these categories by other government agencies.
The Australian National Audit Office's report probed the welfare agency's furniture expenses along with those at the Department of Home Affairs.
But it was Services Australia's processes that failed, the audit found.
The ANAO found the agency "often approached one supplier, despite internal guidance to approach multiple suppliers" and did not compare prices when doing so.
The report sampled 40 procurements from Services Australia, finding most did not demonstrate how value for money was achieved.
Three of the 40 samples were also reported inaccurately on the government's tenders website with discrepancies between contract dates and the notice.
One contract variation, which increased $1.3 million since it was initially entered into, was not reported on the public site.
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The report also found no evidence to show Services Australia had evened the playing field for newcomers hoping to win bids over contractors who had been engaged before.
The audit found Services Australia, in one case, had created a process to order from one supplier by first signing a contract at a nominated price before deciding on items for purchase.
To "gain efficiencies", property branch officials agreed to two contracts worth $2.2 million and $1.1 million with furniture supplier Schiavello and later provided the specific details of what items were purchased.
"The use of an exclusive process to order from a supplier on a panel by first signing a contract before deciding upon purchased items is not compliant with the [commonwealth procurement rules]," the report said.
"Services Australia advised that this process 'was not a procurement for new furniture' and was for the retrofit of non-electric Schiavello workstations and repair of Schiavello products that were out of warranty.
"There was limited evidence to support this advice and no evidence of the agency considering a process that would be in line with the CPRs."
The agency accepted all three recommendations from the auditor to improve its processes for planning procurement arrangements and demonstrating how value for money can be achieved.
"The agency notes that many of the procurements examined by the ANAO were undertaken on or before 30 June 2022," the agency said in response to the audit.
"Since then, the agency has strengthened its processes and controls for supporting the achievement of value-for-money in procurement consistent with updates to the commonwealth procurement rules and best practice."
Services Australia chief executive Rebecca Skinner in a response letter said her agency was working to improve training and strengthen contract management frameworks.
While the audit report found deficiencies in aspects of the Home Affairs Department's, it was found to be largely compliant with the rules.
- with AAP
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