This appeared last week:
05/07/2024 09:34
The logical sequel to procurement, probity and ethics is … this NEW Audit Committee inquiry into Contract Management!
Parliament of Australia
The Joint Committee of Public Accounts and Audit (JCPAA) has commenced an inquiry into the contract management frameworks operated by Commonwealth entities.
The Chair of the JCPAA, Mr Julian Hill MP, said that “recent major inquiries into Commonwealth Procurement and Probity and Ethics revealed serious failings. Recent audit reports have highlighted similar issues ‘downstream’ of procurement in how agencies manage contracts once executed. The Committee will examine whether the frameworks supporting contract management by various Commonwealth entities are fit for purpose to ensure project delivery.”
Mr Hill noted in this regard that “successful outcomes are very unlikely to be achieved from Government procurement activities without effective contract management. This is therefore a vital capability for public sector agencies but one that commonly goes under the radar and is often lacking for a number of reasons.”
He further commented that “we will be carefully evaluating the levels of expertise, governance arrangements, record-keeping, performance measures, and policies and guidelines of a number of recently audited agencies with respect to their external contracts. There are also ongoing probity issues which arise during the management of a contract and the Committee will consider whether current frameworks and practices are fit for purpose.”
The inquiry will have particular regard to any matters contained in or connected to the following Auditor-General Reports:
- Auditor-General Report No. 21 2023–24 Management of the Australian War Memorial’s Development Project
- Auditor-General Report No. 36 2023–24 Procurement of My Health Record
- Auditor-General Report No. 37 2023–24 Administration of the Adult Migrant English Program contracts
- Auditor-General
Report No.47 Defence's management of contracts for the supply of
munitions: Part 1
[This audit has been conducted in two parts and Part 2 is currently expected to be tabled in the Parliament in November 2024]
- Defence’s procurement and implementation of the myClearance system (due to table in July 2024)
Submissions to the inquiry addressing the above terms of reference are invited by Thursday, 15 August 2024. Details of this inquiry – including the submissions received and public hearings – will be available on the inquiry website.
Media inquiries
Mr Julian Hill MP, Chair of the Joint Committee of Public Accounts and Audit
on
(03) 9791 7770 (Electorate Office) or via Laura Hooper 0422 85 1127.
For background information
Committee Secretariat
02 6277 4615
jcpaa@aph.gov.au
For more information about this Committee, you can visit its website. On the site, you can make a submission to an inquiry, read other submissions, and get details for upcoming public hearings. You can also track the Committee and receive email updates by clicking on the blue ‘Track Committee’ button in the bottom right-hand corner of the page.
Here is the link:
Specifically on the myHR we have:
Procurement of My Health Record
Published Wednesday 12 June 2024
Portfolio Health and Aged Care
Entity Australian Digital Health Agency
Contact Please direct enquiries through our contact page.
Activity Procurement
Sector Health
Why did we do this audit?
- My Health Record (MHR) is a national public system. It aims to improve the availability and quality of health information, and the coordination and quality of health care.
- It is estimated that $2 billion has been invested in the MHR system.
- Procurement and contract management relating to large public-interfacing IT systems involve unique and elevated risks.
Key facts
- Approximately 23.8 million Australians have a My Health record.
- Accenture has been contracted as the National Infrastructure Operator (NIO) of MHR since June 2012.
- The Australian Digital Health Agency (ADHA) has been responsible for MHR since 2016.
- ADHA varied the NIO contract with Accenture eight times between 2018 and 2023.
What did we find?
- ADHA’s procurement and contract management of the MHR NIO contract has been partly effective.
- ADHA’s governance framework for procurement and contract management is largely fit for purpose.
- ADHA’s management of the NIO contract has been partly effective.
- ADHA has not conducted procurements of the MHR NIO effectively.
What did we recommend?
- There were 13 recommendations to ADHA. They related to management of risk, contract variations and records; review of contractor deliverables; assurance over system architecture documentation; procurement planning and decision-making; probity policies and practices; and AusTender reporting.
- ADHA agreed to 12 recommendations and agreed in principle to one recommendation.
$699 m was added to the MHR NIO contract with Accenture through contract variations since 2012.
72% of ADHA expenditure on MHR national infrastructure service providers (2018–19 to 2022–23) was to Accenture.
55% of ADHA business area reviews of Accenture monthly operations reports were conducted in accordance with requirements in 2023.
Summary and recommendations
Background
1. My Health Record (MHR) is a national public system for making health information about a healthcare recipient available for the purposes of providing healthcare to the recipient.1 The My Health Records Act 2012 (MHR Act) states that the goals of MHR are to overcome fragmentation and improve the availability and quality of health information; reduce adverse medical events and the duplication of treatment; and improve the coordination and quality of health care provided by different healthcare providers.2
2. The Australian Digital Health Agency (ADHA) was established as a corporate Commonwealth entity in 2016, at which time it became MHR system operator.
3. MHR ‘national infrastructure’ is comprised of the IT systems and support enabling the flow of information in and out of the MHR system. The Department of Health and Aged Care and ADHA used IT supplier contracts to implement MHR national infrastructure. The largest contract is for the National Infrastructure Operator (NIO), which is responsible for operation, maintenance, support and integration of MHR national infrastructure.
4. The NIO contract was first executed with Accenture Australia Holdings Pty Ltd (Accenture) on 27 June 2012 for a total value of $47 million to 30 June 2014. As at February 2024, arrangements with Accenture totalled $746 million for MHR NIO services between 2012 and 2025.
Rationale for undertaking the audit
5. The Australian Digital Health Agency reports that approximately 23.8 million Australians had a My Health record as at March 2024.3 It is estimated that $2 billion has been invested in the My Health Record system.4
6. There has been parliamentary interest in government procurement.5 Procurement of large public IT systems can raise risks relating to obsolescence, security and interoperability. This audit provides assurance to the Australian Parliament about whether ADHA has effectively managed MHR procurement.
Audit objective and criteria
7. The objective of the audit was to assess the effectiveness of the Australian Digital Health Agency’s procurement and contract management of the My Health Record National Infrastructure Operator.
8. To form a conclusion against the objective, the ANAO adopted the following high-level criteria.
- Does ADHA have a fit-for-purpose governance framework for contract management and procurement?
- Has ADHA managed the My Health Record National Infrastructure Operator contracts effectively?
- Has ADHA conducted procurements of the My Health Record National Infrastructure Operator effectively?
Conclusion
9. ADHA’s procurement and contract management of the My Health Record National Infrastructure Operator has been partly effective. Effectiveness has been diminished by poor procurement planning and failure to observe core elements of the Commonwealth Procurement Rules.
10. ADHA’s governance framework for contract management and procurement is largely fit for purpose. There are policies and guidance for procurement and contract management, although probity guidance could be improved. Management and oversight arrangements for procurements and contract management are largely appropriate. Internal audit coverage of procurement has been limited.
11. ADHA’s management of the National Infrastructure Operator contract has been partly effective. The identification and assessment of commercial risk has been limited. The effectiveness of day-to-day administration of the contract is diminished by contract management planning that is not fully fit for purpose. Contract variations within the existing contract term have been made with insufficient assessment of risk, consideration of materiality and justification of value for money. The management of contract performance has not utilised all available levers under the contract.
12. ADHA has not conducted procurements of the National Infrastructure Operator contract effectively. ADHA’s planning and decisions about how to approach the market for the contract in 2019 and 2022 were deficient. For both sole source limited tender procurements, ADHA’s conduct of limited tender processes under Division 1 of the Commonwealth Procurement Rules (including demonstrating value for money, managing probity and public procurement reporting) was also deficient.
----- End Extract – more at the link:
I think it is fair to say this is not a clean bill of health for the ADHA is procuring myHR goods and services by a long way.
In summary the ADHA needs to do a great deal better with our money.
Pity no one ever gets reprimanded or fired as our money is just not spent and managed as it should be!
Hopeless for the public interest. Lots of words but little change and! improvement apparently!
David.
3 comments:
"The Australian Digital Health Agency reports that approximately 23.8 million Australians had a My Health record as at March 2024."
" It is estimated that $2 billion has been invested in the My Health Record system."
All these Audits, Reports, Enquiries and Reviews dance around the core issue deftly avoiding the simple fact thate, few people use the system,
Such an audit is grossly inadequate when it comes to accountability.
It asks the question: Did the agency do what the law requires?
It does not ask the question: Did the project, of which procurement is only a part, achieve its business objectives?
Or, to put it another way: Did the project deliver the savings and/or benefits it predicted in the business case?
After over 14 years we still don't know.
Insourced or outsourced? Who circumvented due process and for what advantage to whom?
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