We are currently finalising a review of contract management with two councils, focusing on areas such as risk management, performance management, contract variations, and contract extensions and renewals. The insights from this review will be of significance to all local government, as well as broader government agencies. This review is scheduled for tabling in June 2025.
Our reviews continue to identify a pattern of recurring issues in contract management practices across government, many of which we have highlighted in previous reports. This suggests that while awareness of these issues may be growing, consistent and sustained improvements in practice are still needed.
Our 2024 annual report (Part B Controls opinion) identified a number of opportunities for improvement in contract management practices with application across government.
What we found
We reviewed a sample of significant contracts from several agencies and found an ongoing need to improve contract management practices. We found:
- instances where contract management plans were not in place, were outdated or did not address all key areas of contract management, or were not approved before the contract commencement date
- that contract management practices did not always ensure key contract and legislative requirements were met
- that contract management processes did not always demonstrate a clear understanding of risks to the agency, how they were managed, and whether the responses were effective, tracked and documented
- that contract management practices did not always ensure that all aspects of the arrangements were assessed through appropriate measurement, reporting of KPIs and annual reviews
- that contract registers were incomplete, not updated or did not agree to executed contracts
- instances where contract meetings with suppliers were not held or were held with no documented outcomes
- instances where the agency’s application of contract management differed from Procurement SA’s recommended approach
- that key documents required for the contract management phase of a project were not always prepared and submitted promptly to those charged with governance of the project
- that contract management reporting did not always have sufficient evidence to support contract activities performed by the supplier occurring at the right times an instance of a contractor not performing in line with contracted service levels
- that contract closure assessments, post‐contract reviews and timely reporting to governance on the outcomes did not always occur
- that there was no evidence of contract managers completing mandatory contract management training in some cases
- an instance where an agency was not effectively monitoring or appropriately approving expenditure incurred under a contract.
Several of these findings represented non‐compliance with Treasurer’s
Instruction 18 and Procurement SA policies and procedures.
What public authorities should do
Regardless of the nature of the contract, it is important for agencies to take an active role in improving their contract management practices by:
