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STATE PROCUREMENT BOARD

2018-19 Annual Report

STATE PROCUREMENT BOARD 21-25 Nile Street

PORT ADELAIDE SA 5015

GPO Box 1046 ADELAIDE SA 5001

www.spb.sa.gov.au Contact phone number: 8226 5001 Contact email: www.spb.sa.gov.au ISSN: 2209-8848 Date presented to Minister: 30 September 2019

2018-19 Annual Report for the State Procurement Board

To:

The Hon. Rob Lucas MLC

Treasurer

This annual report will be presented to Parliament to meet the statutory reportingrequirements of the State Procurement Act 2004 and the requirements of Premierand Cabinet Circular PC013 Annual Reporting.

This report is verified to be accurate for the purposes of annual reporting to theParliament of South Australia.

Submitted on behalf of the State Procurement Board by:

Nicolle RantanenPresiding Member

Date 2~? ^ayo-^c—x^ '20t^ Signature

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From the Presiding Member

I am pleased to present the State Procurement Board's Annual Report for the yearending 30 June 2019.

The Board's achievements in 2018-19 include:

• building procurement capability across the public sector by providing support andcoordination of a range of programs including targeted training workshops,procurement forums, open days and funding support for procurementqualification and professional development activities

• implementation of the Board's revised 2018-22 accreditation and assuranceprograms

• ongoing operational activities including the review of public authority submissionsto the Board; participation in government reviews and reform activities; requiredupdates of existing policies and guidelines; secretariat support; complaintinvestigation and resolution; and issuing procurement authorities to newlyestablished and re-aligned public authorities resulting from machinery-of-government changes.

During 2018-19 the Board also participated in the ongoing inquiries of the StatutoryAuthorities' Review Committee and South Australian Productivity Commission. TheBoard welcomes the recommendations of these inquiries and is committed to buildinga responsive system of public sector procurement that will deliver value to all SouthAustralians.

On behalf of the Board, I thank the Hon. Rob Lucas MLC, Treasurer, for his ongoingsupport.

I gratefully acknowledge the management and staff of Government Services,Department of Treasury and Finance, who support the Board in meeting its objectives.I also acknowledge the ongoing commitment and contribution of my fellow Boardmembers, who share my enthusiasm for improving the system of procurement.

Nicolle Rantanen

Presiding Member

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Contents

Overview: about the Board ...................................................................................... 5

Our purpose ............................................................................................................ 5

Our role ................................................................................................................... 5

Our organisational structure .................................................................................... 5

Our Minister ............................................................................................................ 6

Our Board ............................................................................................................... 7

Legislation administered by the Board .................................................................... 9

The agency’s performance .................................................................................... 10

Agency contribution to whole of Government objectives ....................................... 10

Agency specific objectives and performance ........................................................ 11

Corporate performance summary ......................................................................... 14

Employment opportunity programs ....................................................................... 14

Agency performance management and development systems............................. 14

Work health, safety and return to work programs ................................................. 14

Executive employment in the agency .................................................................... 14

Financial performance ........................................................................................... 15

Consultants disclosure .......................................................................................... 15

Contractors disclosure .......................................................................................... 15

Risk management................................................................................................... 17

Risk and audit at a glance ..................................................................................... 17

Fraud detected in the agency ................................................................................ 17

Strategies implemented to control and prevent fraud ............................................ 17

Whistle-blowers disclosure.................................................................................... 17

Reporting required under any other act or regulation ........................................ 17

Public complaints................................................................................................... 18

Number of public complaints reported to the State Procurement Board ............... 18

Appendix: Audited financial statements 2018-19 ................................................ 19


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Overview: about the Board Our purpose

The State Procurement Board (the Board) is established under the State Procurement Act 2004 (the Act) to oversee procurement operations for public authorities.

Under the Act, the Board must have regard and seek to further the object of that Act by advancing government priorities and objectives by a system of procurement for government agencies directed towards:

• Obtaining value for money in the expenditure of Government funds;

• Providing for ethical and fair treatment of participants; and

• Ensuring probity, accountability and transparency in procurement operations.

Our role

The Board’s accreditation and assurance programs, oversight of public authorities and major government contracts and a continuing focus on capability development are key elements of the Board’s contribution to effective government administration.

The Board provides comprehensive policies and guidelines to support effective procurement operations across government. These policies have been designed to provide a balance between process rigour and efficiency in accordance with the objective of ensuring value for money, the fair treatment of all bidders, probity and transparency. The Board’s range of capability development initiatives help improve the procurement and contract management capability of the South Australian Government workforce. Information on the Board’s policy framework and capability development program are available on the Board’s website: spb.sa.gov.au Ongoing business activities include the review of public authority submissions to the Board, the development and review of the procurement policy framework, capability development and training, secretariat support, complaint investigation and resolution, issuing a procurement authority to newly established public authorities, and reviewing compliance with the procurement framework. The Board undertakes a strategic role in overseeing the Government’s system of procurement, focusing on fostering efficient and effective procurement practices across government. The Board reviews public authority acquisition plans where the value exceeds the procurement authority issued to public authority Chief Executives by the Board through its Accreditation Program. Data on the number and value of public authority submissions to the Board for 2018-2019 is available on the Board’s website:https://www.spb.sa.gov.au/content/annual-board-attendances-and-approvals-201819.

Our organisational structure

The State Procurement Board is supported by the Policy, Standards and Governance team, Government Services, Department of Treasury and Finance. The structure of the team is set out below.

https://www.spb.sa.gov.au/

https://www.spb.sa.gov.au/content/annual-board-attendances-and-approvals-201819

https://www.spb.sa.gov.au/content/annual-board-attendances-and-approvals-201819


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Development

Changes to the Board

During 2018-19 there were the following changes to the Board’s structure and objectives as a result of resignations or machinery of government changes.

• The Board’s support staff (the Policy, Standards and Governance team) were transferred from the Department of the Premier and Cabinet to the Department of Treasury and Finance

• Resignation of Board members; Ms Marielle Smith, Ms Andrea Michaels and Mr Jason Schell.

Our Minister

The Hon Rob Lucas MLC, Treasurer, is responsible for the State Procurement Act 2004.

Executive Director,

Government Services, DTF

Board Services Officer

Senior Audit and

Compliance Officer

Board Services Officer

Manager, Procurement

Policy, Governance &

Capability

Senior Procurement

Advisor

State Procurement

Board

Senior Policy Officer

Senior Policy Officer

Manager, Procurement

Capability Development

Capability Development

Officer


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Our Board

Nicolle Rantanen, Presiding Member

Nicolle Rantanen was appointed to the role of Presiding Member in April 2016. Nicolle is the South Australian Public Trustee and manages over 185 staff with responsibilities including corporate strategy, financial management and investment of over $1.2 billion. Prior to this, she was the Chief Operating Officer of the Department of Treasury and Finance from 2016-2018. From 2009 to 2016 Nicolle held senior executive positions at Statewide Super, including as Chief Executive Officer for 12 months. Nicolle's extensive experience within the superannuation and banking industry is backed by her strength in strategic planning, organisational development, business improvement, finance, systems and administration. Nicolle has a Master of Commercial Law, a Master of Business Administration and a Bachelor of Commerce. She is a Fellow of the Australian Institute of Company Directors, a Fellow of the Australian Society of CPAs and a Fellow of the Taxation Institute of Australia. Nicolle is a Director of Credit Union SA and Chair of the Risk Committee, Divisional Councillor for CPA SA/NT, and Divisional Councillor SA/NT for the Australian Institute of Company Directors. Ms Jackie Bray – Member

Ms Jackie Bray has held the role of Deputy Chief Executive of the Department for Correctional Services since May 2015. Ms Bray is responsible for the state-wide operations of 9 prisons and the state's community corrections services. Previously, Ms Bray was the Executive Director of Offender Development, responsible for developing best practice strategies, policies and procedures that ensure holistic sentence management and reduced re-offending. Prior to joining Correctional Services, Ms Bray headed up the Youth Justice Directorate for South Australia, leading a major reform agenda for young offenders, including the design and construction of a new Youth Training Centre.


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Dr Caroline Croser-Barlow – Member

Dr Caroline Croser-Barlow is currently the Project Director, Year 7 into High School at the Department for Education. Her previous role was Group Executive Director, People and Performance at the Department of Environment, Water and Natural Resources (DEWNR). Dr Croser-Barlow has worked across a number of elements of corporate governance, including overseeing the establishment of an internal process to manage unsolicited proposals, supporting improved clarity of relationships with statutory boards and as DEWNR's lead on energy policy. Dr Croser-Barlow has previously worked in the Department of the Premier and Cabinet (SA) and the Department of Defence, including a posting as the civilian Policy Advisor to the Australian Defence Force Commander of forces in the Middle East. Mr David Henchliffe – Member

Mr David Henchcliffe is currently Group Manager, Strategic Procurement at OZ Minerals. David has over 25 years’ experience in the supply chain profession. As an Army officer he served in a series of supply chain related operational appointments and later became a project manager for a range of capital equipment acquisition projects within Defence. He then moved into defence operational and contingency planning with responsibility for the supply chain aspects. David later led the Procurement, Materials Management & Logistics functions within Santos and has had extensive experience in the areas of sourcing, contracting, supplier relationship management, materials management, logistics, project management, organisational leadership and change management. Ms Kelly Tattersall – Member

Ms Kelly Tattersall is currently the Director, Service Transfer in the Department of Human Services. She has previously held procurement roles within Revenue SA, the Department of Education and South Australia Police and moved into a procurement leadership role when she joined the former Department for Families and Communities.


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Ms Tattersall led the procurement and grants function within the department, whilst also taking responsibility for the department’s strategic planning function and Registered Training Organisation and Screening Unit at various times. Ms Tattersall completed her Bachelor of Laws and Legal Practice and Bachelor of Science at Flinders University in 1999 and was admitted to the bar of the South Australian Supreme Court in 2001. Through the State Procurement Board’s procurement capability development program Ms Tattersall completed a Master’s in Management (Strategic Procurement) at the University of South Australia in 2015. Ms Tattersall has been a member of the Chartered Institute of Procurement and Supply since 2006 and attained full membership (MCIPS) in 2015 and Chartered status in 2018. Mr Jamin Woolcock - Member

Mr Jamin Woolcock is the Chief Finance Officer, SA Health. Mr Woolcock has been in the role of Chief Finance Officer, SA Health since 2010. With over 16 years’ working in the public sector Jamin has considerable experience in a range of public sector functions including management and financial accounting, procurement and audit.

Legislation administered by the Board

State Procurement Act 2004


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The agency’s performance Agency contribution to whole of Government objectives

Key objective

Agency’s contribution

More jobs The Board continues to collaborate with the Office of the Industry Advocate to ensure all policy requirements of the South Australian Industry Participation Policy (SAIPP) relevant to the scope of the Act are incorporated into the Board’s policy framework. Broadly, The SAIPP is designed to deliver economic benefit by promoting:

• employment for residents of South Australia;

• investment and capital expenditure that builds capacity in the South Australian economy;

• use of businesses and supply chains that employ South Australian residents and invest in the State.

The Board’s policies reflect the SAIPP, requiring all procurements to consider the opportunities for small, start-up and Aboriginal businesses operating in South Australia to provide a quote or tender in the procurement. Public authorities are also required to implement Economic Contribution Tests and Industry Participation Plans across Government procurements above various thresholds.

Lower costs

The Board supports a consistent approach to government procurement from the Not-for-Profit (NFP) sector that sets clear requirements and lowers administrative costs. This year, the Board worked with the Department of Treasury and Finance to finalise a standard NFP funded services agreement. The standard NFP funded services agreement adds to the Board’s simplified contracting suite, aimed at lowering the costs of contracting to both Government and its suppliers. The Board’s policy framework is directed towards achieving procurement outcomes that deliver the best value in the expenditure of public money while ensuring the optimal use of government resources.

Better Services

The Board supports and develops public authority procurement capacity and capability through targeted training and other capability development activities. The effective implementation of procurement policies, procedures and operational practices by public authorities improves services and reduces unnecessary administrative costs, procurement and contracting risks to Government.


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This supports:

• the achievement of value for money;

• ethical and fair treatment of suppliers;

• probity, accountability and transparency

Agency specific objectives and performance

Agency objectives Indicators and Performance

Support and develop public authority procurement capacity and capability through targeted training and other capability development activities.

In 2018-19, the Board ran an extensive capability development program, which included the following activities: • 5 procurement graduates completed a structured 12-

month program Strategic Contracts, Department of Treasury and Finance, including team rotations, executive on the couch sessions, site visits and leadership resources.

• 2 procurement forums were held, both were fully subscribed with 100 attendees at each session.

• An open day was held, which provided the opportunity for agency staff to network and hear from the Board’s capability development contract panel providers about training, qualification and professional membership opportunities. The Board’s capability team provided an overview of funds and initiatives, and SA Health provided a customer perspective of the benefits realised from engaging in the various capability development initiatives offered by the Board.

• A suite of 11 online training courses was launched. The following online courses were available:

- Introduction to Procurement - SA Government specific

- Introduction to Contract Management - Managing Supplier Relationships - Developing and Writing Specifications - Evaluating Tenders and Quotes - Disposing of Assets - Managing Procurement Risks - Business Acumen and Commercial Skills - Negotiation Skills - Category Management - Engaging and Influencing Stakeholders

• 49 face-to-face training courses were held, with a total of 599 staff attending training. Training was delivered by


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Comprara Pty Ltd, CIPS Australasia, Major Training Services (MTS) and Transformed Pty Ltd. The 2019 Targeted Procurement Training Program consists of 23 different courses ranging from Procurement Fundamentals (Introduction to Procurement), Contract Management, Negotiation and Debrief Suppliers and Other Stakeholders.

• Students commenced the first online Diploma of Procurement & Contracting. The Diploma is self-paced and remains in progress.

• The Board launched a procurement qualification support fund, providing financial support to staff who have successfully completed a procurement or contract management qualification. The fund was designed to recognise and reimburse staff who have undertaken a procurement qualification at their own full or partial expense.

• A Procurement qualification academic excellence initiative commenced and will run for 5 years. The two inaugural winners received funds for further professional development.

• 3 staff won a conference place, travel & accommodation to attend the 2019 CIPS conference in Melbourne and 3 staff won a conference place, professional membership, travel & accommodation to attend the 2019 IACCM conference in Sydney, paid for by the State Procurement Board.

• A CIPS Corporate Award Program was established. This 12-month learning program has a blended group of seven public and six private sector representatives, building a centre of procurement excellence within Strategic Procurement, Government Services, Department of Treasury and Finance.

Confirm and monitor an accreditation program to ensure that public authorities have the capability to appropriately exercise their delegation

The accreditation process is an independent assessment of each public authority’s procurement strategies, processes and systems to ensure it effectively manages its procurement operations. Accreditation provides public authority Chief Executives with the authority to undertake procurements up to a specified dollar value without reference to the Board, with transactions greater than the accredited level to be considered by the Board for approval. This promotes good governance and managerial effectiveness at the local level and provides greater accountability to CEs. Through accrediting CE’s, the Board can better focus on strategic matters, recognising that public authorities are best placed to manage their risk and deliver value for money. The 2018-22 Accreditation Program has commenced. The program has initially focused on the six largest public


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authorities (Tier 1), accredited to a value threshold of $15 million. These Tier 1 public authorities account for approximately 80 percent of the goods and services spend across government. The program reviews these public authorities across 28 better practice procurement principles in the areas of:

• Leadership and Strategy

• Organisation and People

• Governance and Performance Management

• Processes and Systems

• Relationships – Internal and External. In 2018-2019, the Board has completed the accreditation reviews for the Department of Education and the Department for Human Services. The accreditation reviews were undertaken by an independent reviewer. The reviewer assessed how the public authority fulfilled each of the designated five, high level procurement categories. Public authorities were required to prepare a development plan to address issues requiring improvement or rectification. If significant issues are identified during the accreditation reviews in areas such as governance, risk or any of the procurement principles, the Board can implement strategies to reduce risk to government, such as reducing the procurement authority of public authorities or implementing strategies to increase oversight of procurement operations.

Confirm and improve public authority procurement compliance and practice against Board policies and procedures through an assurance process

The 2018-22 Assurance Program has commenced. The program requires onsite evaluation of the compliance of public authorities with the mandated requirements of Board policies, principles, guidelines, standards or directions. The Assurance Program reviews all public authorities with a procurement authority. The Assurance Program enables the Board to meet its legislative obligations by ensuring that public authorities comply with the mandated requirements of Board procurement policies, principles, guidelines, standards or directions. The new Assurance Program also includes an assessment of Tier 2 public authority procurement operations to ensure that fundamental organisational requirements are in place for an effective procurement operation. In 2018-19, the Board completed four Tier 3 public authorities reviews and one Tier 2 public authority. The assurance review for the Tier 2 public authority was undertaken by an external reviewer.


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Corporate performance summary

Reporting is included in the 2018-19 Department of Treasury and Finance Annual Report.

Employment opportunity programs

The Board’s support staff, as employees of the Department of Treasury and Finance, participate in programs set out in the 2018-19 Department of Treasury and Finance Annual Report.

Agency performance management and development systems


Work health, safety and return to work programs


Executive employment in the agency

Reporting on executive employment is included in the Department of Treasury and Finance’s Annual Report 2018-2019. The Office of the Commissioner for Public Sector Employment has a workforce information page that provides further information on the breakdown of executive gender, salary and tenure by agency.

https://publicsector.sa.gov.au/

https://publicsector.sa.gov.au/about/office-for-the-public-sector/workforce-information/

https://publicsector.sa.gov.au/about/office-for-the-public-sector/workforce-information/


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Financial performance Full audited financial statements for 2018-2019 are attached to this report.

Consultants disclosure

The following is a summary of external consultants that have been engaged by the agency, the nature of work undertaken, and the actual payments made for the work undertaken during the financial year. Consultancies with a contract value below $10,000 each

Consultancies Purpose $ Actual payment

All consultancies below $10,000 each - combined

Various $18,127

Consultancies with a contract value above $10,000 each

Consultancies Purpose $ Actual payment

PSI Asia Pacific P/L Complaint investigation $13,207

Data for previous years is available on Data.SA at: State Procurement Board Annual Report data1 See also the Consolidated Financial Report of the Department of Treasury and Finance for total value of consultancy contracts across the South Australian Public Sector.

Contractors disclosure

The following is a summary of external contractors that have been engaged by the agency, the nature of work undertaken, and the actual payments made for work undertaken during the financial year. Contractors with a contract value below $10,000

Contractors Purpose $ Actual payment

All contractors below $10,000 each – combined

Various $1,982

https://data.sa.gov.au/data/dataset/state-procurement-board-annual-report-data-public-complaints1

https://data.sa.gov.au/data/dataset/state-procurement-board-annual-report-data-public-complaints


http://treasury.sa.gov.au/

http://treasury.sa.gov.au/


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Contractors with a contract value above $10,000 each

Contractors Purpose $ Actual payment

Comprara Pty Ltd Capability assessment $63,927

Major Training Services Training $49,734

KPMG Assurance reviews $107,893

ArcBlue Asia Pacific Accreditation reviews $53,617

ArcBlue Asia Pacific Policy review $13,805

Total $ 288,976

Data for previous years is available on Data.SA at: State Procurement Board Annual Report data

The details of South Australian Government-awarded contracts for goods, services, and works are displayed on the SA Tenders and Contracts website. View the agency list of contracts. The website also provides details of across government contracts.



https://www.tenders.sa.gov.au/contract/buyerIndex

https://www.tenders.sa.gov.au/contract/buyerIndex

https://www.tenders.sa.gov.au/contract/search?preset=organisationWide


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Risk management Risk and audit at a glance

The Department of Treasury and Finance administratively supports the Board in accordance with the department’s Risk Management Framework. Reporting is included in the 2018-19 Department of Treasury and Finance Annual Report.

Fraud detected in the agency

There were no known instances of fraud detected in the activities undertaken by the Board in this reporting period.

Strategies implemented to control and prevent fraud

Strategies implemented by the Department of Treasury and Finance are included in the 2018-19 Department of Treasury and Finance Annual Report.

Whistle-blowers disclosure

Number of occasions on which public interest information has been disclosed to a responsible officer of the agency under the Whistleblowers Protection Act 1993:

0


Reporting required under any other act or regulation Nil.




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Public complaints Number of public complaints reported to the State Procurement Board

Complaint categories

Sub-categories Example Number of Complaints 2018-19

Supplier procurement complaint against an Agency

Flawed procurement process.

Claims of a flawed and biased procurement process undertaken by a Government Agency. The Board appointed an external investigator to review the procurement process and the complaint was not upheld.

1





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Appendix: Audited financial statements 2018-19

2018-19 annual report 2018... · 2018-19 annual report for the state procurement board from the...

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