Working with government series #3

This article about public sector accountability is timely with media coverage of the Australian National Audit Office’s finding that a federal government department paid ten times market value for a plot of land on which to build an airport runway. You can read the details here and some coverage here.

Whatever the outcome, this example illustrates how public sector accountability works and how important it is that governments follow their own procurement rules. It certainly demonstrates how a failure to follow the rules can result in a department being at the centre of an embarrassing media and political scandal.

My last article was all about the rules that govern public sector spending on goods and services they need to help them do their job. The money they spend is provided by taxpayers and as such they have an obligation to Australia’s taxpayers to spend it in a manner that delivers the best possible value for every dollar.

This pretty much sums up why there are so many rules — it’s our money and governments must account for how they spend it. The rules are meant to make sure contracts are awarded fairly and represent the most productive, best value option.

Governments spend billions of dollars every year. How will we know everything is above board? How do bureaucrats account for what they spend? One way is through the relevant jurisdictional audit office uncovering mismanagement or poor decision making, as with the airport land example above.

Another mainstay of accountability is the parliamentary estimates processes. Basically these are specific committees whose members scrutinise government spending on behalf of the taxpayer … as well as attempting to score political points.

These committees hold public hearings one to three times a year, depending on the jurisdiction, and are made up of government and non-government members. In the Australian Parliament, the Estimates hearings are conducted in the Senate three times a year, following the Budget in May and before and after the mid-year economic and fiscal outlook in October-November and February.

Essentially these senators question senior public officials — the heads of departments and their executive teams — in regard to their conduct of government business and spending of public funds. In addition to keeping public officials accountable, non-government senators are looking to uncover government waste and mismanagement for political advantage.

Outside of the estimates process, there are many other opportunities for parliamentarians to question government performance. Question Time is perhaps the most well-known and is the most covered session of parliamentary sittings with footage of its theatrics inevitably featured on nightly news. There is also the less sensational Questions in Writing process in which parliamentary members lodge questions to ministers on the parliamentary notice paper and hope for a response.

For those of us outside the parliament, Freedom of Information processes allow us to seek information about government conduct. The media often use FOI to follow up allegations of mismanagement or inappropriate dealings.

The media itself is a powerful accountability tool in any democracy. A strong, objective media is essential for a healthy, representative and efficient democratic system of government.

Traditional media and more than ever, social media, influence the public’s opinion of their governments. This is especially the case during elections, our most effective accountability mechanism. Governing political parties and their ministers know all too well how unforgiving a community can be of governments that do not deliver.

What does all this mean for public sector suppliers? First, we know it makes good business sense to understand your customer. The accountability requirements placed on public servants do influence their relationships with suppliers.

Second, suppliers who win business through a fair and competitive process are part of a partnership to deliver ‘value for money’ on behalf of taxpayers. Featuring in negative media stories about government waste or mismanagement is not a good outcome for suppliers looking for repeat business or to expand their public sector clients. The performance, reliability and reputation of a supplier can come into play as much as price in the awarding of government contracts.

Third, considering the above, your government contract is likely to come with some potentially onerous reporting requirements, hard targets and KPIs. Such arrangements help your clients account for the money they are spending with your business, so prioritise compliance and factor it into your project costs and timelines.

Government accountability requirements are all part of satisfying community expectations to know what their elected governments are up to and how much they are spending. The transparency, ethical and accountable behaviour we expect is supported by the policy frameworks and rules around government procurement, all of which is implemented by the people we want to work with. It is very much in our interest as suppliers to understand our clients’ accountability obligations and help them satisfy these important requirements.