28 June 2006
PROCUREMENT REFORMS HAVE DELIVERED SAVINGS, BUT DRIVE FOR COST EFFICIENCIES
MUST NOT JEOPARDISE SERVICES, CAUTIONS AUDITOR GENERAL
The Government’s procurement reform program, designed to assist
public sector agencies to obtain greater value for money and improved
outcomes when procuring goods and services, has got off to a good start,
says WA Auditor General Des Pearson in a report tabled in Parliament
today.
The report shows that the Department of Treasury and Finance (DTF) has
estimated that savings of over $47 million have been made through the
program in 2004-05 – with some $29 million of those savings available
to Government for other uses through a process called “harvesting”,
whereby DTF reduces agencies’ budgets by an amount it predicts
they can save through procurement reform.
Following audit testing, Mr Pearson found that DTF’s estimates
of the savings achieved by agencies were reasonable; however, he reveals
that the Government’s savings target of $50 million and the DTF
estimate of a total of $47 million in savings in 2004-05 did not include
the cost of procurement reform.
He recommends that in future DTF should publish in full the cost of
procurement reform (which he calculated at some $36 million over five
years) to accompany their estimate of savings achieved.
Mr Pearson also indicates that these initial savings came from obvious
economies and that in the future years of procurement reform there will
need to be more sophisticated strategies to find savings and efficiency
gains.
However, this quest for savings should not jeopardise the delivery of
services to the public, he says.
There were already some warning signs evident about the balance between
achieving savings and maintaining service delivery, with some agencies
sourcing savings from areas not affected by procurement reform and others
treating the savings “harvest” as an across-the-board budget
cut.
He cautions that both DTF and agencies must make sure that the funds
cut from budgets really come from internal savings in procurement and
not from budgets used for service delivery; and further, that agencies
should redirect any windfall savings from procurement reforms to improvements
in services to the community.
Ends/.
Media Contact: Peter Villiers,
Manager Reporting and Communications
Tel: (08) 9222 7558. Mobile:
0417 936 171 Fax: (08) 9322 5664
4th Floor Dumas House 2 Havelock
Street West Perth
|
