AHSPO C AHSPO Conference f “Is it a Legal Catch - Probity & Management” Probity & Management 23 O t b 23 October 2009 2009
My Background y g � Chartered Accountant and Certified Internal Auditor; � General Manager Assurance and Risk Management in Oakton; g g ; � ASX listed Business and IT Consulting Organisation (OKN) with over 1,100 staff - BRW Best Professional Services Firm in 2008 ($20m-$200m Revenue); � Diverse Probity experience over 60 assignments including: • Probity Advisor for HealthSMART; • Probity Advisor for HealthSMART; • Probity Auditor for Health Purchasing Victoria for the past 4-5 Years; • Recently commenced with Probity Advisor with Bendigo Health R tl d ith P bit Ad i ith B di H lth accommodation project; • Probity Advisor for the National Emergency Warning System y g y g y 2
Overview � What is Probity? � � Am I Effected? Am I Effected? � Essential Elements of Probity � What Governs Probity Requirements in Victoria y q � Ethical Decisions you May Confront � What are the Consequences? � Some Probity War Stories � Key actions to manage probity risks � What if I Discover a Probity Breach? � Questions 3
What is Probity? y “…Probity is where I leave my brain at home and just do what I’m told” – a client c e t “I’m not against probity, I just don’t want it to interfere with what I’m doing…” another client h li “Probity will cause delays to my project Probity will cause delays to my project… ” 4
Am I Effected? � Yes!! � It does not cause delay or add costs. It generates value from proper reflection & efficient handling; � Probity should be viewed as a key element of governance, setting the tone for how things are done. 5
Essential Elements of Probity � All procurement processes be fair, open, transparent to all parties and be defensible. � The essential elements of probity that must exist throughout a procurement are: 1. Compliance with legislative obligations and government policies; 2. Effective management of conflicts of interest 3. Fairness and impartiality; 4. Security & confidentiality; 5. Open and competitive process; and 6. Consistency & transparency of process (accountability). � � Proactive mitigation of probity risks Proactive mitigation of probity risks. � Aim is to achieve a justifiable, defensible process, not a perfect one !! 6
What Governs Probity Requirements in Victoria The key elements that define how probity in procurement operates in Victoria and/or provides guidance on probity principles includes: � Common Law � Victorian Industry Participation Policy; � Public Administration Act 2004; � Ethical Purchasing Policy and � VGPB Policies and guidelines; Environmental Purchasing o e ta u c as g � Policy for Conduct of Commercial � Policy for Conduct of Commercial Statement; Engagements”; � Partnership Victoria Policy; � The supporting “Good Practice � Your Procurement Policy and Guidelines for Commercial Procedures; Procedures; Engagements in Government”; G � SAI Global Probity Handbook; and � Victorian Public Sector Code of � Conduct; YOUR ETHICAL BEHAVIOUR . � Building Commission requirements; u d g Co ss o equ e e s; � Ministerial Directions; 7
Ethical Decisions you may confront? 8 questions to ask yourself when conducting procurement activities: 1 1. What would the reaction be if the decision was front page of the Herald Sun? What would the reaction be if the decision was front page of the Herald Sun? 2. Do you think (or would a reasonable person think) it is the right thing to do? 3. Can the action be supported? 4. Is the action legal? 5. Is the action consistent with the organisation’s Code of Conduct? 6. Is the action consistent with your organisation’s Policy and Procedures? 7. Is there going to be any benefit to you or your friends? 8 8. What will be the outcome for your organisation your colleagues and yourself? What will be the outcome for your organisation, your colleagues and yourself? IF YOU ARE UNSURE, seek help. 8
What are the Consequences? � Loss of confidence in procurement process; � Legal action; � Delays in achieving organisation’s outcomes if projects are delayed to rectify issues; � � Additional cost – particularly if you have to restart the procurement process; Additi l t ti l l if h t t t th t � Your Dismissal or Disciplinary Action; � � Professional scrutiny by third parties such as: Professional scrutiny by third parties such as: • Ombudsman; • VAGO; • Internal Audit / External Audit; • Legal Advisers; • Media � Parliamentary Questions. y 9
Some Probity War Stories y 10
Key Probity Challenges Each project is unique and can throw up many probity challenges. Some of the more Each project is unique and can throw up many probity challenges Some of the more common issues include: 1. Late tenders; 2. Poor record keeping and confidentiality of project information; 3. Identification and management of Conflicts of Interest; 4. 4 Benefits to project staff – entertainment, financial, offers of employment; Benefits to project staff entertainment financial offers of employment; 5. Lack of sufficient time and resources for project – cut corners; 6. Insufficient skills to run procurements – errors; p ; 7. Evaluation plans not completed in sufficient time to test; 8. Use of mandatory criteria vs criteria to be scored. 9. Scoring Scale and cut-off levels for short-list not defined; 10. Contract negotiations – material changes to specification. 11
Lessons Learned Ombudsman Report – Probity Controls in Public Hospitals for Procurement of Non-Clinical Goods and Services (August 2008) Some key areas identified: y � Develop and circulate to staff guidance on whether to accept gifts. Advise contractors what the Departments policy is on acceptance of gifts; � Keep a register for recording gifts and benefits; � Suggested maximum of $50; � � Review the Conflict of Interest process and practices; Review the Conflict of Interest process and practices; � Formal Process for selection of contractors – public tender, EOI, publicly advertised and follow Building Commission / VGPB � � Independently check that all work has been completed before making payment Independently check that all work has been completed before making payment – sign off sign off checklist; � Look to use centralised procurement function; 12
Lessons Learned (Cont ’ d) ( ) Ombudsman Report – Probity Controls in Public Hospitals for Procurement of Non-Clinical Goods and Services (August 2008) � � Formal process to regularly check pricing at least once every six months (independent of Formal process to regularly check pricing at least once every six months (independent of contract manager); � Effective process for monitoring contractors performance; � � Ensure that delegations are current; E th t d l ti t � All contracts to be reviewed by Legal; � Centrally manage all contracts; � Conduct regular audits to ensure compliance with VGPB/Building Commission policies; 13
Lessons Learned (Cont ’ d) ( ) Ombudsman Report – Office of Housing Contract (2007) � � Clarify in RFT, Evaluation Plan and Tender Briefing that Past Performance will be Clarify in RFT, Evaluation Plan and Tender Briefing that Past Performance will be assessed; � Give tenderers an opportunity to comment on their past performance; � � There was strong record keeping, file record system and audit trail; There was strong record keeping file record system and audit trail; � Record movements of all tenders outside of secure room; � Ensure all evaluation reports are dated, signed and duly completed; � Have Probity Auditor/Advisor at Tenderer Debrief; � Plan debrief; � Advise the Evaluation Panel and Tender Steering Committee to be alert to situations that create a potential conflict of interest � Tender Steering Committee members to complete Conflict of Interest declarations 14
Refresh - Essential Elements of Probity � The essential elements of probity that must exist throughout a procurement are: 1 1. C Compliance with legislative obligations and government policies; 2. Effective management of conflicts of interest; 3. 3 Fairness and impartiality; Fairness and impartiality; 4. Security & confidentiality; 5 5. Open and competitive process; Open and competitive process; 6. Consistency & transparency of process (accountability). 15
Key Actions to Manage Probity Risks 1. Comply with Government and Legal requirements eg Prepare a Procurement Conduct Plan (Probity Plan) 2. Effective Management of Conflicts of Interest � These are not wrong – should be declared and appropriately managed; � Refer to the organisation’s Conflict of Interest policy; � Declared at all times by all people that have any form of influence on the outcome of a project process; � Check COI before Procurement commences and when Tenderers are known and then as CoI arise and then as CoI arise 16
Recommend
More recommend
