In 2016, the State Government identified the need for centralised scrutiny when public sector entities engage consultants to provide strategic advice. As a result, Premier’s Circular 2016/02 ‘Contracts for Services – Consultants’ (Circular) was issued by the Department of the Premier and Cabinet (DPC).
The Circular requires state government entities to seek DPC approval of proposals with an estimated value of $50,000 (including GST) and above to establish contractual arrangements with external consultants.
The policy only applies to consultancy services that provide strategic advice for Government to act on. Government trading enterprises are excluded from this policy.
The above process aims to provide Government with information on the levels of expenditure and the nature of externally sourced expertise and specialist skills. Entities should ensure that contracts for consultancy services for strategic advice valued at less than $50,000 are for services which cannot be undertaken within their entity by adequately skilled/experienced staff.
Entities are required to submit an approval request form to DPC at least one week prior to starting the procurement processes to allow sufficient time for consideration and approval. The approval request form requires entities to provide:
- a brief of the project
- description of contracted services
- estimated contract value
- justification for services being undertaken by external parties rather than in-house
- an explanation of how the contracted services will contribute to an improvement in efficiencies and/or outcomes/service delivery.
DPC have published the following statistics regarding the engagement of consultants for strategic advice across the public sector.
|Year end||Consultancies||Entities which engaged consultants||Total cost of contracts|
|30 June 2018||71||18||$4,647,713|
|30 June 2017||41||15||$3,165,981|
|30 June 2016||81||23||$10,249,873*|
Source – Department of the Premier and Cabinet, Reports on Consultants Engaged by Government www.dpc.wa.gov.au/publications/consultants/pages/defaul.aspx
*This includes $4.67million relating to major asset sales
All 8 entities audited had policies, procedures and guidelines in place to ensure compliance with the Circular, and these were being implemented effectively. However, these policies, procedures and guidelines could be enhanced by clearly defining ‘strategic consultancy advice’.
Although not an explicit requirement of the Circular, we noted that the policies and procedures for most entities did not require an assessment, prior to engaging a consultant, of whether in-house staff had the necessary skills and expertise to provide the advice. Consequently, we found instances where this assessment was not performed.