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Thursday, August 06, 2009

Treasury's public management practices

The Grech affair isn't over by any means, and continues to throw up a wide range of issues, with plenty of uncertainty still surrounding the future of key players. Of course at the heart of this when it all started was whether the Prime Minister and/or the Treasurer had arranged for special treatment for a mate. On that, the Auditor General's Report Representations to the Department of the Treasury in Relation to Motor Dealer Financing Arrangements finds no evidence to support the claim. The big issue now is Grech, his conduct in the light of the law and the APS code of conduct, and the behaviour of Turnbull and Abetz in parliamemtary proceedings. And even recognising the need for urgency in responding to a significant policy problem, a list of shortcomings in public administration for Treasury, always put up there as one of the premier practitioners of good public management.

For example the Auditor General's report includes details of the way things were done in this case which may have wider implications: the decision to appoint David Murray, former Commonwealth Bank CEO and Chairman of the Future Fund as a consultant and Grech's claim that instructions were to engage him and pay him whatever he asked, with a contract signed only many months after he came on board; signing up Credit Suisse as program manager for Ozcar for a flat fee of $5million without testing the price or going to tender (Treasury says its Probity Auditor says this was OK); engaging other third party service providers for the project through a direct sourcing process with a single supplier approached and contracted and agreeing to various engagements before it had obtained a quote or estimate from the contractor; and failing to publish details of all but one of those engaged on AusTender.

Despite Treasury policy, records throughout weren't created and important physical and electronic records were not captured in Treasury's TRIM record keeping system (for the details see 3.61). Grech claims Treasury IT told him that the email back-up system had not worked on three days around the time he says he received an email from the PM's Office so emails deleted on those days could not be identified or retrieved.(Update:The Australian reported on 11 August that Treasury asserts this is not true.)

While no-one is suggesting anything sinister, Grech managed to avoid for 18 months requests to undergo re-evaluation of his security assessment, without much apparent fuss, and his clearance ran out in January this year long before the current imbroglio (3.56).

There is more about public management aspects of the report picked up in this editorial in the Sydney Morning Herald and by Patrick Walters in The Australian. Scholars of public administration and political science will be writing reams about it all.

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