RSM Australia

Probity in Public Sector Procurement

Technology Insights

Are you worried about probity?

If you’re in a public sector position of responsibility, you will have thought about this at some point. Probity complaints aren’t always the result of an improper process. Frequently, they come from disgruntled vendors. Sometimes they’re based on hearsay; occasionally, they are based on fact.

Phil Thomas, a member of the East Coast Probity Team at RSM, says that it’s always painful, exhausting, and potentially damaging for the individuals and organisations involved. The best outcome is a conclusion that a proper process was followed, and those involved, vindicated. The worst outcome varies depending on who and where you are in the process. Auditors and audit and risk committees are usually involved. Occasionally, ombudsmen may also feature. In certain cases, anti-corruption bodies (ICAC or IBAC)  or even the media may take an interest.

So… are you worried?

If not, well done!public sector risk

Probity is a complex concept, requiring thoughtful and thorough planning, and rigorous and relentless execution. Mastery of it will protect you and the process, your agency, your government, and the public from the risks associated with probity mishaps. Any complaint against your process will likely be harmless to the reputations and futures of the people and organisations involved- and may even enhance them.

If you are worried, read on.

You can use this “Probity 101” to give your performance a five-minute probity health check. Think carefully about your answers, and ask yourself:

  • Who is likely to ask me these questions?
  • Can I answer them confidently, and with proof? 
  • Where can I find support for myself and my colleagues as we protect our stakeholders and ourselves?

Probity 101 Health Check

Probity means integrity, uprightness, and honesty. In the context of public sector procurement, this means:

  • giving suppliers confidence that their offers will compete fairly, and
  • assuring that public funds are being spent well.  

Probity requirements differ for each procurement and these should be considered from the initial planning of a procurement. Probity processes should be proportionate to the procurement’s complexity, value, and risk. Specific aspects to address include:

  1. Maintaining integrity and accountability
  2. Ensuring market confidence
  3. Establishing fair processes
  4. Managing conflicts of interest
  5. Ensuring all people can competently perform their responsibilities and understand their accountability
  6. Engaging a probity practitioner

1. Have you maintained integrity and accountability?

Proving this generally relies on: 

  • being scrupulously fair, honest, and transparent;
  • not taking advantage of market power;
  • managing conflicts of interest;
  • making decisions objectively and predictably;
  • assessing all relevant information;
  • ensuring people understand their accountability; and,
  • ensuring there is a legal basis for the procurement and complying with relevant laws, policies and procedures.

2. Have you ensured market confidence?

This can be shown by: 

  • providing suppliers with the same information and timelines;
  • treating all suppliers fairly;
  • protecting confidential information and knowledge; and,
  • addressing incumbent advantage.

3. Have you established fair processes?probity list

This can be demonstrated by things such as: 

  • applying transparency and fairness throughout the procurement lifecycle
  • creating clear and effective governance arrangements 
  • ensuring procurement processes, including evaluation and negotiations are conducted fairly and in accordance with organisational policies
  • creating records and maintaining documentation to demonstrate probity considerations and decision-making, sufficient for independent verification
  • ensuring any changes to processes do not impact, positively or negatively, any proponent
  • ensuring that confidential information remains secure and confidential. 

4. Have you managed conflicts of interest?

This is frequently the cause of major probity problems, and effective management depends on:

  • setting up procedures and processes to identify, declare, address, manage and record relevant interests; and,
  • other people considering whether an interest represents a conflict (whether actual, perceived, or potential).

5. Have you ensured people can competently perform their responsibilities and understand their accountability?  

Proving this requires ensuring people:

  • have relevant expertise and current training on relevant laws, policies, and procedures;
  • are sufficiently competent to understand their accountabilities; and,
  • understand the procurement objectives, can perform the processes and manage the risks. 

6. Have you engaged a probity practitioner? 

A probity practitioner’s job is to help you protect your organisation, the public, and yourself. Like any other professional, a probity practitioner can provide independent advice and value by ensuring high probity standards, and ideally, probity advisors should be engaged as early as possible in the procurement process.

A probity practitioner assists in giving suppliers confidence that their offers will compete fairly and assists in assuring the public that funds are being spent well. 

In selecting a probity practitioner, think carefully about the types of organisations and oversight environments they have worked in.

Do they ‘get’ your context? Will they provide practical help? Do you trust them to move the needle on your probity risk?

FOR FURTHER INFORMATION

For more information about Probity Advice and Assurance Services at RSM, please click here, or contact Michael Shatter.

As a trusted advisor with over 27 years of experience, specialising in delivering probity advice and services to an extensive range of public sector and government enterprise clients across all jurisdictions, Michael Shatter brings an informed and expert perspective as a Director of the Risk Advisory Services division in Melbourne, delivering practical and defensible probity advice that aligns with the highest probity standards of Australian and state governments. Working with teams that focus on Probity & Assurance as well as Security & Privacy services - both services reflect his focus on the security and integrity of information and related processes. Read Michael's profile

Phil Thomas's knowledge uniquely positions him to create governance solutions in one context from the breadth and depth of his experience in others. He is available for consulting through Governance & Performance Insights. Phil is a seasoned executive leader and a respected adviser of several dozen peak boards and committees in NSW and cross-jurisdictionally. He has more than 20 years experience serving at the highest levels of for-profit, NFP and public sector organisations in Australia. He has benefited from a career at senior levels of public sector probity, with deep experience both as an auditor and a practitioner. I’ve helped state and federal agencies, state owned corporations, local councils, and private companies. I’m happy to provide practical help with everything from a top-down review to re-writing specific policies. If you would like to connect and talk to Phil about your probity environment, you can contact him via his LinkedIn profile

Authors

Michael Shatter
Partner - Melbourne
asset_3.png

Subscribe to Risk Insider to stay up to date with the latest in Technology, Fraud and Security.