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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2012-03-13 Daily Xml
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PROCUREMENT WORKING GROUP

The Hon. M.F. O'BRIEN (Napier—Minister for Finance, Minister for the Public Sector) (14:13): I seek leave to make a ministerial statement.

Leave granted.

The Hon. M.F. O'BRIEN: I rise to update the house on the findings of the investigation led by the Procurement Working Group. The Procurement Working Group's role has been to coordinate the investigation that is being undertaken within agencies and resolve any impediments to the gathering of information. The working group is also ensuring that cases have been referred to the appropriate authority and recommending whole of government actions that can be taken to enhance government procurement processes.

To ensure a rigorous investigation, Ernst & Young was engaged to independently review the process conducted by the Procurement Working Group. A final report was endorsed at the Procurement Working Group meeting on 8 March 2012 which I have tabled today. The report indicated that 11 public authorities purchased printer cartridges at significantly inflated prices from suspect suppliers to the value of approximately $1,205,000 and that eight public authorities have found evidence of gifts or prepaid purchases of printer cartridges.

The report also indicates that approximately $5,500 worth of gift cards were distributed to purchasers, in addition to physical goods such as plasma screens and iPods. Another notable finding by the Procurement Working Group was that approximately $227,000 worth of printer cartridges were paid for in advance of receiving the product, in contravention of Treasurer's Instruction No. 11.

In response to the investigation carried out by the Procurement Working Group, the government has taken action to strengthen procurement and financial management processes across the public sector. These measures include: the establishment of an across-government stationery contract from 1 September 2012, which has been mandated for use by all public authorities; the State Procurement Board taking a leading role in coordinating responses to future issues that negatively impact on the government's achieving the objectives of the State Procurement Act 2004; reminding all public authority chief executives of their responsibilities in complying with government financial management policies, including Treasurer's Instructions; the Commissioner, Public Sector Employment, writing to public authority chief executives in relation to the importance of the government's Code of Ethics for the South Australian Public Sector; and including a statement on all government purchase orders and standard contract documents seeking a commitment to ethical practices by the supplier, and allowing for possible terminations of the contract, without notice, for any breaches.

The Procurement Working Group investigations provided the across-government mechanism to allow public authorities and the Crown Solicitor's Office to deal with any matters relating to ongoing investigations and possible breaches. To date, one employee from SA Health has been terminated, and two have been suspended. Another employee from the Department of the Premier and Cabinet has also been suspended. The Department of the Premier and Cabinet has referred eight invoices, totalling $79,263, to the Crown Solicitor's Office and SAPOL. SA Health has referred two cases from SA Pathology and the Aboriginal Family Clinic to the Government Investigations Unit and the Anti-Corruption Branch, with invoices totalling $43,888.

The Department of Planning, Transport and Infrastructure has referred an invoice of $127,200 to the Crown Solicitor's Office. PIRSA is to refer findings of its external independent investigator's report to the Crown Solicitor's Office when complete. The State Procurement Board will monitor outstanding responses and spending on suspect suppliers by public authorities, as well as coordinating responses to any future procurement related issues that may arise. The Auditor-General has been kept informed of the Procurement Working Group's findings during the investigation.

Members interjecting:

The SPEAKER: Order!

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