Protecting the public purse with digital footprints

By Rob Cook

July 17, 2015


In a perfect world, two major objectives for procurement are to obtain best value for money and ensure that everything is above board. And when it comes to the public purse, the guidelines around procurement practice exist for a reason. Parameters such as the need to go to tender when the value is more than $100,000 are simply a safeguard for the public purse. They are designed to ensure transparency and value for money — and they also exist to minimise corruption.

Yet in an era of unprecedented technology advances, when the light on operations has never shone brighter, it remains all too common that the guidelines can still be avoided, either inadvertently or otherwise.

Recently covered in The Mandarin, an investigation from former auditor general Ian McPhee examined the application of procurement rules within three government bodies. Among other things, it found that:

  • In some cases, evidence such as supplier quotes, supplier correspondence and evaluation reports providing value for money justifications was lacking;
  • Proof that project expenditure was approved before deals were struck with suppliers was available for only 74% of procurements; and
  • Doing procurement by the book remains an “ongoing challenge” for many public servants.

It’s clear, then, that any approach to market remains prone to human error and other unpredictable variables. Or, put another way, despite the existence of procurement guidelines and safeguards, negative outcomes can still occur.

So what causes such outcomes?

For one, the arduous, manual, paper-based process offers myriad opportunities for error. A call from a supplier might not be recorded in the communication logs. A potentially winning submission may get lost in the mail. A newspaper advertisement may not have reached as far, or as wide, as it should have.

The problem, however, is substantiating the error. To prove anything, there needs to be a forensic trail — breadcrumbs to follow back to the source. And despite the best intentions, reliance on any manual process can make finding proof difficult.

For many organisations there remains an auditing black hole, into which instances of practice error can disappear without trace. It’s the equivalent of being responsible for a crime scene but not having access to the DNA evidence because the forensics lab hasn’t been built.

“Technology has no agenda. It doesn’t crave financial security and it cannot cut corners.”

The thing about humans is that we are just that: human. Following mountains of procedure — especially in such an administratively fraught process as going to tender — is bound to lead to some tasks being accidentally overlooked. Or in some cases, ignored. Humans enable both the possibility of human error and, in the cases of a small minority, an agenda conflicting with the desired outcomes of the organisation.

To address this, organisations need to incorporate technology into the mix.

Technology has no agenda. It doesn’t crave financial security and it cannot cut corners. What technology does, especially when it comes to digitising the manual procurement process, is enable the steps to be easily outlined while making them increasingly hard to circumnavigate.

At every stage of the procurement process, a specialised digital solution leaves a trail that is easily audited and, for most people, impossible to re-write. The “late submission” scenario can be easily navigated, given that electronic submissions can be acknowledged with a time-stamped receipt. And the use of an electronic “Q&A tender forum” ensures that everyone is on the same page with tender-specific communications.

Everything in a digital process leaves a trail which can be followed back to the error or anomaly. By design, it has an in-built audit system which in itself, acts as a quiet deterrent. It provides for a greater forensic analysis of errors and clues as to the best way to fix obvious gaps in process.

Existing guidelines are meant to ensure the procurement processes are as transparent as possible, both in appearance and reality. But when it is clear that the guidelines can be easily avoided, it’s imperative that organisations find ways to shine the light on each step of the process in order to ensure compliance. Specialised technology provides the best opportunity to achieve this.

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