Image: Jeremy Seitz
A new report from New South Wales Auditor-General, Margaret Crawford has found that a number of agencies in the Premier and Cabinet haven’t been paying their suppliers invoices on time in 2016.
The report shines and unflattering spotlight on the performance of state government agencies in their procurement practices, suggesting there are opportunities for agencies to improve financial controls and governance of outsourced service providers.
Ms Crawford said agencies in the Premier and Cabinet cluster should ensure purchase orders are raised and approved before goods and services are ordered and then pay supplier invoices on time.
According to the report, many ‘cluster agencies’ use shared service arrangements that process financial transactions and provide a range of other services.
“Cluster agencies using ServiceFirst were transitioned to the private sector operator GovConnect during the year,” the report said.
Consequently, “significant breakdowns” in internal controls at both ServiceFirst and GovConnect during 2015-16 contributed to the “poor performance” in raising purchase orders and paying invoices that also increased the risk of fraud and error.
The Audit Office now recommends that all cluster agencies address the issues preventing invoices being paid on time.
The other big problem identified by the Audit Office is that seven cluster agencies had a high number of purchase orders raised after goods and services were ordered.
“The Parliamentary Counsel’s Office and the Department of Premier and Cabinet had 83 per cent and 71 per cent respectively of purchase orders raised after the invoice dates,” according to the report.
As a result, the Audit Office recommends that cluster agencies should strengthen procurement processes to ensure purchase orders are approved before goods and services are ordered.
The Audit Office’s second recommendation in this area is that cluster agencies should collect information on purchase orders raised after invoice date and set targets to improve performance.
