Canberra’s National Capital Authority blasted for ‘poor transparency and record keeping’

A scathing auditor general's report has blasted Canberra's National Capital Authority for "poor transparency and record keeping" and being unable to demonstrate value for money, with calls for new guidelines around open tenders and competitive procurement.

But while agreeing to implement seven recommendations from the Australian National Audit Office (ANAO), the National Capital Authority (NCA) defended its practises in a "relatively specialised area" which needed "unique or bespoke equipment" to maintain commonwealth assets including sculptures, memorials and parks in Canberra.

"Procurement decision-making has not been sufficiently accountable and transparent," the ANAO concluded in its report on the NCA's procurement activities.

The NCA - with a remit to maintain "national assets" and "enrich the experience of the capital" - has managed projects for roads, bridges, flag displays, the Captain Cook Memorial Jet water feature and conservation in Canberra.

The commonwealth entity had not been audited for 13 years, the ANAO said, explaining its rationale for the audit, published on Thursday.

The audit office assessment of the NCA found "just over half of the contracts were awarded to the candidate where documentation demonstrated that it offered the best value for money".

"The NCA's insufficient use of open and competitive procurement processes, non-compliance with the CPRs [Commonwealth Procurement Rules] and poor transparency and record keeping means it cannot demonstrate value for money across its procurement activities," the ANAO's report said.

The ANAO also said it was "common for there to be gaps in the records of the planning and conduct of procurements", and that the NCA's reporting of contracts on government website AusTender was "largely non-compliant" with procurement rules.

The audit found 64% of procurements above the $80,000 threshold for the commonwealth rules were not included in an open competitive approach.

"Other non-corporate commonwealth entities are much more likely to report using competitive procurement approaches," the report said.

Specifically, the ANAO was concerned it was "common" for conditions to be attached to NCA procurements which "limited competition", and that the authority often only approached suppliers it already knew.

The audit office also noted that in 39% of contracts it examined, some NCA team members had not completed conflict of interest declarations, raising "ethical" concerns.

The ANAO made eight recommendations, including seven for the NCA specifically, and one for the finance department regarding issuing better guidance around procurement rules.

For the NCA, the ANAO recommended increasing open competitive tenders, improving records around justifying limited tenders, and building a new framework to monitor compliance with procurement rules.

The NCA and finance department agreed with all recommendations. But the NCA said it believed there were "practical" reasons underpinning its use of limited tenders.

"The NCA has a complex ageing heritage asset base and operates in a relatively specialised area, often with unique or bespoke equipment and/or requirements. Over many years staff have built a solid knowledge of the various areas of operations," it said in a response, included in the ANAO report.

"NCA officers use this knowledge to optimise the best approach to maintain commonwealth assets effectively and efficiently. As such, procurement processes are designed to deliver the best results often within narrow markets of specialist skills and expertise.

"On occasion, assets fail unpredictably, requiring that procurement activities be reactive, responding to unforeseen and unprogrammed events or driven by a situation that must be addressed immediately."

The NCA said it focused on value for money, and believed it "undertakes its procurements in accordance with the Commonwealth Procurement Rules (CPRs) and in a manner consist [sic] with the Department of Finance's guidelines".

However, the authority said it was already "implementing a number of new arrangements and further education of staff to address the recommendations of this report".