[Peetwo]

OneSKY trough fund update - 

From the ANAO website I note that the 2nd ASA audit reporting date has been brought forward...

"..The anticipated tabling date for this report has been brought forward to March 2017. It was previously anticipated to table in May 2017..."
Update published Dec 01, 2016 01:15 pm

Conduct of the OneSKY Tender
Report preparation

Contribution has closed

Due to table: March, 2017

Portfolio: Infrastructure and Regional Development; Defence; Finance

Entity: Airservices Australia; Department of Defence; Department of Finance

Contact: Please direct enquiries relating to reports through our contact page.

The objective of this audit is to assess whether the OneSKY tender was conducted so as to provide value with public resources and achieve required timeframes for the effective replacement of the existing air traffic management platforms.

Audit criteria

1. Was the OneSKY tender process based on a sound business case and appropriate Defence, Airservices and joint governance arrangements?
   
2. Did the tender process result in the transparent selection of a successful tender that provided the best whole-of-life value for money solution at an acceptable level of cost, technical and schedule risk, consistent with the Request for Tender?
   
3. Did negotiations with the successful tenderer result in constructive contractual arrangements that ensured continuity of safe air traffic services, the managed insertion of an optimum system of systems outcome within required timeframes, and demonstrable value?
   

Not sure what that means but anyhow...

I also note that the Hansard for the Harfwit confession session is finally out: Joint Committee of Public Accounts and Audit (Joint-Friday, 25 November 2016)

P2 comment - I just love this bit, Harfwit simply can't help himself and keeps swallowing the bait...  

Mr HART: Why didn't Airservices more effectively manage ICCPM's engagements to ensure that the OneSKY tender process was free of concerns over perceptions of conflict of interest?

Mr Harfield : Sorry, could you just repeat the question?

Mr HART: Why didn't Airservices more effectively manage the engagements of ICCPM to ensure that the tender process was free of concerns over perceptions of conflict of interest?

Mr Harfield : We acknowledge that our management of it was not as good as it should be, particularly around the perceived potential conflicts. There were certain assumptions made that just having individuals sign off conflict-of-interest registers and probity aspects was done, and some of those things were done early in the piece but were not updated subsequently. There was also an assumption made in setting up the strategic partnership, and part of one of the criteria of that strategic partnership was that the conflict-of-interest aspects were to be addressed, and then there was noncompliance with some of those procedures.

Mr HART: I think we have a different understanding of what we are talking about. I am not talking about actual conflicts of interest; I am talking about perceptions of conflict of interest. Do you accept, for example, that Airservices had a closed mind with respect to its engagement, or its strategic partnership, with ICCPM?

Mr Harfield : Yes, I do.

Mr HART: Right. Why was Airservices' approach to administering declared conflicts and monitoring ICCPM's contractors' compliance with the probity plan inconsistent and passive?

Mr Harfield : It goes back to a point that I made, which is that the process was put in place and, therefore, there is an expectation that it just gets followed. Instead of actively managing things, people say, 'There is a process in place, therefore it is all done.' But, when you have put a process in place, you have to actually manage it to make sure that you are achieving the outcomes. This goes back to that cultural element that we talked about that needs to be addressed, and I can apply some of those pieces referenced—the conflict of interest and that passiveness—to a range of other processes that we have within the organisation. It is actually one of the fundamental drivers of why we are going through a transformation program of creating an accountable performance culture in the organisation.

Mr HART: On that issue, your response indicates, under the heading of 'Monitoring', that you have put in place steps for improved monitoring and oversight by the executive and board in relation to project delivery and governance. Insofar as that applies to the issue of probity management, what, if any, oversight was there by the executive and the board with respect to probity and conflict of interest?

Mr Harfield : The board and executive approved the probity management framework and the conflict of interest—

Mr HART: Which you did not follow.

Mr Harfield : frameworking system and procedures. It was 'by exception' for things to be elevated within that framework. It should not have been 'by exception'; there should have been much more active management. They are some of the corrections we have made as a result. We admit that it was not appropriate, and the reporting out of it to board level in particular was not adequate.

Mr HART: The point was that you had a range of frameworks available to you, particularly with regard to procurement, and you did not follow them.

Mr Harfield : That is correct.

Mr HART: Would that be correct with respect to probity management?

Mr Harfield : The probity management was managed. What occurred was some of the follow-ups and closing out—I will call it loose ends—and review. So there were elements of non-compliance or not following, but generally speaking it was appropriate.

Mr HART: I put it to you that your response, in particular from the organisation, was directed primarily towards the existence of actual conflicts rather than the question of perception. Is that correct?

Mr Harfield : That is a fair assumption.

Mr HART: That is a pretty serious failure, isn't it?

Mr Harfield : In hindsight, yes, it was.

Mr HILL: Because the response was signed by the chair.

Mr Harfield : The response to the audit?

Mr HILL: The response to the audit was very defensive; it was saying there was no actual conflict—almost implying that perceived conflicts do not matter—and that was signed by the chair.

Mr Harfield : That is correct, but also that we have been on the public record a number of times, even into Hansard, acknowledging that our management of perceived potential conflicts of interest was not appropriate. We have even put that in part of our response, that we have acknowledged that and they are areas we have taken action on to improve going forward. We actually have acknowledged that we did not manage them appropriately.

Mr HILL: But that failure goes right up to the mind of the organisation—that is, the governance of the organisation.

Mr Harfield : It goes to the focus of the probity framework, and the conflict of interest was very much around the actual. The considerations around potential were not given the due respect that they should have been.

Mr HART: In response, you have indicated that there have been some further steps put in place. How many investigations have been undertaken by the probity adviser and the auditor panel separately? Have there been any significant findings made? What has changed as a consequence?

Mr Logan : In response to this ANAO audit, we have explained some of the pieces of changes to policy procedure and activities that we have put in place. We have the probity adviser sitting alongside, reviewing some of those elements, and, as Mr Harfield mentioned earlier, we then had a probity auditor run a probity audit over recent months. The report out of that process is due next week.

Interrogation rule 101: When your in a hole just stop digging...
MTF...P2