Generally, entities have suitable policies and practices in place for the engagement of consultants for strategic advice.
Forest Products Commission (FPC) have a comprehensive contracts manual that has a dedicated section on the engagement of external consultants. Their manual was consistent with the requirements of the Premier’s Circular and covered matters that were not included in the policies and procedures of the other entities, including:
- an overall proviso that consultants should only be engaged when appropriate skills are not available in-house
- a clear indication of the types of consultancy arrangements which are outside the scope of the Circular.
Procurement policies of 3 entities did not fully incorporate the requirements of the Circular as they did not define what constitutes ‘strategic consultancy advice’. However, these entities had other procedures in place that, while less formal, demonstrated a knowledge of, and where applicable compliance with, the necessary requirements of the Circular.
Policies for the engagement of consultants can also be enhanced to ensure they make specific reference to the Circular and its requirements are incorporated in entities’ procedures and guidelines manual.
Our testing of consultancy expenditure indicated that the audited entities were liaising with DPC regarding the proposed consultancy prior to commencing procurement. For many of our samples, DPC determined that the consultancy did not constitute ‘strategic advice’ and did not require approval. However, the fact that entities were discussing these proposals with DPC indicates that their controls are working appropriately.
DPC maintain a listing of consultancies which they considered were for strategic advice and therefore within the scope of the Circular. Although our lines of inquiry did not assess DPC’s determination of which engagements represented strategic advice, we did not note any inappropriate decisions in this regard.
We sampled a small number of these consultancies to determine if DPC had approved the consultancy prior to the consultant being engaged. All of our sample had been approved except for one contract for $98,669 at the Public Transport Authority, where a consultant was engaged without the approval of DPC, but subsequently reported to DPC.
The Circular encourages entities to take due care to ensure that contracts for consultancy services valued below $50,000 are for services that cannot be performed by existing staff with the necessary skills and experience.
We found that entities could strengthen their policies and procedures by requiring officers to document why in-house skills were not considered adequate, for consultancy projects in general, including those below the $50,000 threshold. This would ensure monies are not spent unnecessarily.
Only FPC had evidence to indicate that the entity had performed an assessment of whether there was sufficient in-house expertise prior to engaging the consultant.
Entities often required clarification from DPC regarding the types of engagements that could be deemed to be ‘strategic advice’.
DPC advised that when they made their determinations, there were a number of other factors they considered, which were not made available to entities. Some of these factors included but were not limited to:
- the nature of the work
- how it was to be used and by whom
- the public interest
- the likelihood that the strategic advice would be acted on by Government.
We noted the Circular does not give clear guidance on the types of engagements that are likely to be strategic advice.