The State Supply Board, a statutory authority established under the State Supply Act 1985 (the Act), is principally responsible for providing a framework for public sector supply.
An amendment to the Act was effected in January 2002. The important aspect of the amendment is to extend the definition of supply operations to cover not only goods but also services and other commodities, namely energy and intellectual property. In so doing the amendment makes it clear that the Board’s statutory ambit regarding supply operations covers public authorities in relation to the management, procurement, disposal and control of goods and services.
The Board is also responsible for the purchase and on selling of gaming machines under the Gaming Machines Act 1992.
The Board comprises six members appointed by the Governor and, except as provided by the Act, is not subject to ministerial control and direction. The Board receives policy, administrative and financial accounting support from the Department for Administrative and Information Services (DAIS). The Contract Services Business Unit within DAIS administers the strategic and complex whole-of-government contracts on behalf of the Board.
Subsection 21(2) of the State Supply Act 1985 provides that the accounts of the Board must be audited at least once in every year by the Auditor-General.
During 2001-02 specific areas of Audit attention included:
Supply Operations framework
contract management
expenditure
salaries
Board Minutes.
The accounts and financial transactions of the Board are maintained and processed by DAIS. In addition, in relation to the contract management activity, the Contract Services Business Unit of DAIS undertakes certain aspects of this activity on behalf of the Board.
Audit reviews of the financial operations and contract management activity of the Board was covered as part of the examination of the operations, systems and processes of DAIS.
The review of the accounts and financial transactions of the Board revealed a generally satisfactory position.
Previous reports have included comment concerning the legal, regulatory and policy framework for procurement in the South Australian public sector. The issues of importance that have been the subject of comment have included the matter of doubt concerning the statutory ambit of the Board’s functions regarding the procurement of ‘services’ as distinct from ‘goods’ and the limited instructive guidance available to agencies concerning best practice procurement policies and procedures.
As mentioned the State Supply Act 1985 was amended, effective from January 2002. The amendment made it clear that the Board’s functions extended to ‘services’ procurement. In addition, the Board has recently commenced the promulgation of various procurement guidelines.
Last year’s Report also indicated that audit review in 2001-02 would be directed to the quality of execution of aspects of the tendering and contracting components of the procurement process cycle undertaken within agencies.
These reviews have either been completed or are in the process of finalisation. Where appropriate, issues identified by Audit have been communicated in management letters to the applicable government agencies and have been included in respective agency commentary in Part B of this Report.
Audit intends in the immediate future, to communicate to the Board matters arising from the various reviews, that may need to be considered and addressed by the Board because of their significance and/or government wide implications. Following that communication and consideration process and notification from the Board on any remedial actions, these matters will be presented in a separate Report to Parliament.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the State Supply Board included an assessment of the controls exercised in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities. The assessment also considered whether those controls were consistent with the prescribed elements of the Financial Management Framework as required by Treasurer’s Instruction 2 ‘Financial Management Policies’.
Audit formed the opinion that the controls exercised by the State Supply Board in relation to the receipt, expenditure and investment of money; the acquisition and disposal of property; and the incurring of liabilities, were sufficient to provide reasonable assurance that the financial transactions of the organisation were conducted properly and in accordance with law.