PROCUREMENT
Compliance and Probity
The integrity of Local Government and reputation of the sector stands on the basis of compliance. Best
practice procurement can assist Local Government to move beyond a minimalistic approach and to deliver
greater value to the organisation, however underpinning this are basic regulatory requirements, and
fundamental ethics and values that govern and guide the procurement operation.
It is however possible and desirable for Local Government to take a proactive approach towards compliance
and probity. Self-regulation can be delivered to the sector in the form of review and checks, internal audit,
and other forms of self-assessment. External checks and balances can also be facilitated.
WALGA and other local and interstate service providers provide a probity audit service that can deliver
independent checks of particular procurement projects. WALGA has also conducted a large number of
procurement review services which provides Local Governments with an analysis of their procurement
processes and practices to help Local Governments identify potential problems and improve their
procurement function with benchmark assessments. WALGA employs qualified probity auditors to
undertake this activity.
Regulatory bodies have, and remain, active in both scrutinising the sector, and engaging Local Government
to support process improvement. When breaches of compliance are identified, voluntary disclosure and
cooperation are common and appropriate forms of response from the Executive, however are also fraught
with risk in an environment of uncertain circumstances.
Common compliance, risk and probity issues for Local Government include;
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Breach of regulations, particularly anti-avoidance provisions
Interpretive issues relating to application of the Tender Threshold
Processes that are weighted to support particular outcomes
Breach of purchasing policy and operational process guidelines
Poor structure of procurement plan, insufficient skill and technical balance within evaluation panels
Governance and external interference in process
Long-term established supplier relationships and incumbency
Poorly constructed specifications that lack detail and increase propensity for fraud
Lack of procedural fairness and breach of duty to be fair
Inappropriate relationships, gifts and inducements, and bribes.
Corruption and fraud through procurement processes and contract management
Procurement capability development will assist to avoid these problems, as will knowledge and awareness of
the regulatory framework. The reform process provides a unique opportunity for Local Government to
review the procurement function and integrate best practice procurement structures and controls into the
new organisation, with heightened awareness of the consequences of non-compliance.
The procurement regulations and consumer and competition law provide clear minimum requirements,
however the structuring of procurement activity is in accordance with Local Government operations. Care is
needed to ensure that procurement risks are identified and addressed, that core separation of duties
alongside clear communication of policy, values and operational guidelines support the compliance and
probity objectives of the organisation.
Summary
Procurement Compliance and Probity Notes | Page 1
Each year the Local Government sector will undertake thousands of tenders, Requests for Quotation and
sourcing exercises, the majority of which are fair and transparent processes which deliver the intended
outcomes. However a small portion of poorly constructed procurement processes, and at worst corrupt and
fraudulent processes, can have a widespread and detrimental impact on the reputation of the Local
Government and the sector as a whole. Each of the Commissions of Enquiry and suspended Councils over
the past decade in Western Australia has involved procurement related issues.
It is critical to address appropriate controls at the governance level, and to regularly test the impartiality of
the organisations procurement. The ideal operating environment is for the sector to stand proud and uphold
the structure of its procurement activity, however a strong reputation and evidential support is required to
underpin this.
Procurement Compliance and Probity Notes | Page 2