Investigation Launched Into 18 Officials at Australian Passport Office
The Australian National Audit Office is questioning the awarding of contracts and spending of money, including $31,000 in trips to a venue that was never used.
A federal audit has found that the Australian Passport Office (APO) disregarded government procurement rules and misused funds, spending $31,422 on travel costs for supposed planning trips to set up a conference in Port Douglas, Queensland.
However, the conference ended up taking place in Canberra, leading to the loss of $104,196 in deposits paid to the Port Douglas venue. An additional $19,940 was spent on the Canberra venue.
An examination of the Office conducted by the Australian National Audit Office (ANAO) revealed misconduct among the staff of the Office, which falls under the Department of Foreign Affairs and Trade (DFAT). Subsequently, 18 staff members are under investigation.
Irregularities During Tendering
The ANAO reviewed 331 contracts totaling $1.58 billion awarded between July 1, 2029, and Dec. 31, 2023. It found that competitive processes were not followed, rendering none of the contracts compliant with the Commonwealth Procurement Rules and DFAT’s procurement policies.
According to the audit, procurement decision-making lacked accountability, transparency, and ethical standards were not met.
During this period, 243 new contracts totaling $476.5 million were initiated without an open request for tender. In over three-quarters of the cases, the Passport Office had already selected their preferred supplier before the procurement process began.
Although in one instance, the winning bidder submitted their bid late, resulting in automatic disqualification as per the rules, they were still awarded the contract.
Related Stories
The ANAO stated, “The [Passport Office] had already identified its preferred supplier or candidate prior to approaching the market for 52 contracts totaling $305.5 million, equating to 71 percent by number or 75 percent by value of the 73 APO contracts examined.”
Despite claims by APO staff that all contracts went through open tenders, documentation showed that quotes were solicited from Indigenous firms even when they were not. These contracts ranged from passport delivery to call center services, accounting services, artwork supply, and labor hire to meet the surge in demand after border reopening.
A contractor managing the APO’s procurement team had their contract extended repeatedly for a decade. This extension was initiated through an email to a subordinate contractor instructing them to proceed with the extension. The APO, however, insisted that the contract resulted from an open tender process.
Conflicts of interest were not appropriately handled, with 16 cases where they were not disclosed. In two instances, contracts were awarded to the spouses of DFAT employees.
The audit also revealed instances where staff guided contractors on filling out tender forms and contract extensions, resulting in significant avoidable costs for the Department.
Expenses classified as “low risk” by Passport Office staff exceeded budget estimates by up to seven times in some cases, and in one situation, costs were ten times the initial estimate.
Insufficient Oversight by DFAT
“The Department’s central procurement team has not exercised sufficient oversight of the APO’s procurement activities,” the audit report states.
“The Department also does not have adequate arrangements in place for the identification and reporting of breaches of finance legislation.”
In response, DFAT acknowledged that “clear indications of misconduct involving a number of current or former DFAT officials and contractors as well as clear cultural issues” exist, as per the ANAO.
DFAT stated, “The procurement of a resort in Port Douglas did not comply with the requirements of the DFAT procurement policy and did not represent value for money. The Department noted that the justification for this venue and location was that the event would benefit the regional economy; however, [it was] also considered that this was not substantiated by any evidence or analysis.”
DFAT pledged to enhance its procurement practices to ensure compliance and efficiency and confirmed that steps have been taken to address specific problematic actions of staff members. While cooperating now, DFAT initially hesitated to provide ANAO with information.
In October 2023, the auditor general requested emails from the Department, which they refused, prompting the ANAO to exercise its compulsory information-gathering powers under the Auditor-General Act.
Opposition Responds
Coalition foreign affairs spokesperson Simon Birmingham expressed that the ANAO’s findings reveal unethical and improper use of taxpayers’ money. He intends to further inquire about DFAT and the APO during Senate Estimates next week.
“The Australian Passport Office (APO) is tasked with offering Australians an official government document and ensuring adherence to the Commonwealth Procurement Rules to manage this service,” Birmingham emphasized.
“Australians are being financially burdened both through paying the world’s highest passport prices and due to officials potentially exposing taxpayers through questionable procurement practices,” he added.
