Senator CHAPMAN --I simply wanted to follow up the question that I asked in relation to the goods and services that were paid for apparently in advance of receiving invoices. They were identified in the Auditor-General's audit report No. 1 1993-94. There seemed to be some confusion as to whether, when Mr Mazitelli said, `I would need to go back and have a look at what in fact transpired at that point'--which is in Hansard on page 111--that constituted a question on notice. I advised the secretariat that it did.

Senator Robert Ray --I advised him that it did not, so he has had conflicting advice.

Senator CHAPMAN --And that was after he received your advice, Minister. I then went back and said, `No, that was intended to be a question on notice.'

Senator Robert Ray --I will ask for a response in a moment, but I want to make it quite clear that I am happy to respond to questions on notice when I say yes, and I have got a reasonable track record of making sure answers come across. I did not regard that as a question on notice and I will not in future so, if senators want, we will have to make that a little more explicit. But I have said that just to say what my position was.

Mr Mazitelli --My recollection of Senator Chapman's question was this: were suppliers of goods and services actually invoicing the department before they were giving us the said goods and services? Is that the particular question, Senator, that you wanted a specific response to?

Senator CHAPMAN --The initial question was this: how could payments be made prior to the receipt of the relevant goods and services? You said then it related to the adequacy of documentation. I followed up with this question: were suppliers of goods and services actually invoicing the department before they were giving you the said goods and services? Otherwise, why would you have paid if you did not have an invoice, or was the invoice coming before the goods and services?

Mr Mazitelli --Yes. The short answer is that in the circumstances that pertained at the time that was the finding of the Auditor-General, that there was inadequate documentation associated with the receipt of goods and services, and that the invoice was processed in the event with the goods and services not having been received in some cases--not in all cases.

Senator CHAPMAN --So what I said was in fact correct, that some suppliers were actually sending their invoices before they were sending the goods and services?

Mr Mazitelli --In the circumstances that pertained at the time, the greater detail is that we were in a situation at that time where, as the department, we had taken over accounts in May of the year 1991-92 and we were also in the process of changing over to a computerised system. We were operating on a manual system at the time. There were three main elements, I suppose, to the goods and services referred to. In the main the goods and services related to a payment for accommodation and for the provision of telecommunications services and equipment to other government departments. But there was also some furniture that was being purchased and stored because the department was moving into new premises at that stage and the premises were not available. The system broke down in the checking of the receipt of some of that furniture.

Senator CHAPMAN --I must say I am still a little bit confused as to the sequence of events. Were suppliers actually invoicing these goods and services and you were getting the invoices and paying on invoice before you had actually been supplied with the goods and services?

Mr Mazitelli --That is the conclusion that the Auditor drew, Senator, yes.

Senator CHAPMAN --You said you were purchasing on behalf of other departments?

Mr Mazitelli --No.

Senator CHAPMAN --Or you were supplying to other--

Mr Mazitelli --No, other departments were purchasing on our behalf, or supplying to us and were purchasing also on our behalf--for example, telecommunications equipment, for the fit-out of our premises. For example, the Department of Primary Industries and Energy undertook the purchasing of telecommunications equipment to go into our building, and there was a transfer of funding from the Department of Tourism to the Department of Primary Industries and Energy which ran across that financial year. The Auditor was of the view that a portion of that transfer was for the provision of services that in fact were not going to be taken receipt of, in that particular case phone calls, until the 1992-93 financial year.

Senator CHAPMAN --Were all of these examples about which the Auditor expressed concern, or to which this concern refers, in that category--they were goods and services purchased by some other department on your behalf--or does that only refer to some of them?

Mr Mazitelli --No, that only refers to some of them.

Senator CHAPMAN --So there were some direct purchases by your department?

Mr Mazitelli --Yes, indeed, furniture and equipment.

Senator CHAPMAN --Has corrective action been fully taken to ensure that does not happen?

Mr Mazitelli --We believe so. We had another audit, of course, in the 1992-93 year and there were no qualifications on that audit. The department put in place a range of procedures to ensure that those documentation problems did not occur again, and they have not, and we are keeping a very close eye on that to make sure that it does not happen.

CHAIRMAN --That completes the inquiries of the Department of Tourism. I thank the minister and the officers of the department for their help in this matter.

[4.15 p.m.]