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Councils must focus on procurement risks to prevent corruption
Councils must better manage corruption risks in procurement, however small the dollars involved, new anti-corruption research shows.
An IBAC review of six Victorian councils found procurement-related issues were generally considered low-risk by senior managers and staff. But IBAC CEO Alistair Maclean says the amount of public funding committed to purchasing goods, services and works, makes procurement a major corruption risk area for local councils.
“Corruption risks associated with procurement are not limited to large contracts or purchases. In fact, the risk of corruption can be higher for goods or services that are relatively low in financial value because low-value items may be subject to a lower level of scrutiny, while being purchased more frequently,” he said.
“With a total operating expenditure of around $7.1 billion in Victoria and a wide range of services to deliver to the public, it is important that councils operate efficiently and work to prevent corruption.”
“Prevention is better than cure. The costs to a council in the wake of corruption are generally far greater than the costs of controls that address corruption risks.”
The review showed councils were good at identifying and rating corruption risks overall, but it was apparent that many controls in place to manage risks had not been acted upon.
“There is an opportunity for councils to improve their systems, processes and controls to manage corruption risks,” Mr Maclean said.
“Councils can use the findings from this review to assess their integrity framework and identify where they can improve.”
“When councils operate more efficiently and effectively, there will be more money available for services such as libraries, waste management and road maintenance.”
The review also included a survey of council employees’ knowledge of corruption prevention policies and attitudes towards reporting potential corruption.
Encouragingly, the majority of respondents (65 per cent) said they would report corruption if they saw it. However, there were still barriers to reporting, including fears that reporting could affect career opportunities and that management would not take action.
The research results will help guide IBAC’s work with the local government sector to prevent corruption. IBAC will run a similar survey in 2015 and councils are encouraged to participate and assess their own integrity frameworks.
