Whilst the scale of probity spend is small in the context of the NSW Government's overall spend on projects, probity in procurement is important for the government to ensure decisions are made with integrity, fairness and accountability while attaining value for money.

Against this background, the New South Wales Auditor-General has issued its report on the engagement of probity advisors and probity auditors (report) dated 27 May 2019.

The report assessed compliance with the 'PBD-2013-05 Engagement of probity advisers and probity auditors' (direction) during the asset procurement and disposal processes of Transport for NSW, the Department of Education and the Ministry of Health over the period 1 July 2015 to 30 June 2018, and surveyed 40 NSW Government agencies with the largest total expenditures to analyse their use of probity practitioners.

The three participating agencies were found to have compliance issues under the direction, in failing to:

  • document detailed terms of reference
  • ensure the probity practitioner was sufficiently independent
  • manage probity practitioners' independence and conflict of interest issues transparently
  • provide probity practitioners with full access to records, people and meetings
  • establish independent reporting lines
  • evaluate whether value for money was achieved.

With respect to the independence aspects, the report noted a tendency among the participating agencies to rely on a limited number of probity practitioners, sometimes on a continuous basis, which threatened actual or perceived independence.

The report also found that the NSW Procurement Board had not effectively monitored compliance with the direction, since the direction's introduction in 2013.

The report recommended that:

  1. government agencies review and revise probity policies, processes and systems to ensure they:
    • comply with the Directions
    • establish criteria (in particular qualitative criteria) for engaging the probity practitioners
    • evaluate the qualifications and performance of probity practitioners
    • capture lessons learnt
    • ensure internal audit functions regularly review probity governance and processes
  1. the NSW Procurement Board develop and implement criteria to ensure prequalified practitioners have the required capability and experience to deliver quality outcomes
  2. the Department of Premier and Cabinet develop probity guidance to assist agencies with the consistent application of the direction.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.