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Thursday, 28 November 1974
Page: 2909

The PRESIDENT -Is leave granted? There being no objection, leave is granted. (The document read as follows)-

The 149th report of the Public Accounts Committee comprises 4 Treasury Minutes relating to previous reports of the Committee. These reports are the 137th report which dealt with the Auditor-General's report for 1970-71, the 139th report relating to internal audit, the 140th report relating to expenditure from the Advance to the Treasurer 1971-72 and the 141st report relating to expenditure from the Consolidated Revenue Fund 1971-72. The 150th report concerns the Committee's inquiry into aspects arising from the report of the Auditor-General for the financial year 1972-73. The committee would again commend the Auditor-General and his staff for the sustained effort they have made over the years to present his report to Parliament early in the Budget session. As we have indicated in previous occasions the tabling of the report at this time each year has assisted the committee considerably in this important area of its work.

In its inquiry the Committee took evidence from the Department of Aboriginal Affairs, the Department of the Army, the Department of Defence, the Postmaster-General's Department, the Department of Supply and the Department of Works. In all, our inquiries related to 7 matters.

The Department of Aboriginal Affaris through its Northern Territory Division, inherited overall responsibility for the self-help housing scheme from the welfare division of the former Northern Territory Administration- the Department of the Interior. The Committee inquired into the arrangements made in 1971-72 by the Northern Territory Administration for the purchase and delivery of 34 demountable houses to be erected for occupation by Aborigines at three aboriginal settlements. The evidence shows that suitable arrangments had not been made by the welfare division of the Northern Territory Administration for the delivery and storage of these houses at the settlements and that damage and deterioration had resulted. The Committee has criticised those responsible and has suggested that delivery and inspection problems in remote areas should be fully considered before delivery to site clauses are written into contracts relating to the Northern Territory.

In the case of the Department of the Army our inquiries were directed towards ascertaining the reasons why a prototype trailer-mounted refrigerator unit was passed by the Department as suitable for production when it was later found that the prototype and the 85 units produced were unsuitable for the purpose for which they were purchased. The committee has criticised the quality of the tests made on the prototype and has drawn attention to the principle it has previously enunciated that in contracts with a developmental content, the prototype should be subjected to exhaustive testing before authority is given for the rest of the production to proceed.

The evidence taken from the Department of Defence related to the lack of control in the administration of a cleaning contract which resulted in a number of underpayments and overpayments to the contractor. Action was taken by the Department to improve the administrative control over the contract by increasing staff and instituting new verification procedures. The Department intends to terminate the existing contract and replace it with a new contract which will include a more precise formula for adding new areas and for wage adjustments.

In connection with the Postmaster-General's Department the evidence taken related to the development of a computer-based message switching and data network, the awarding of the contract to UNIVAC Australia and the resultant delays in the completion and acceptance of the network which the Post Office considers could affect its profits to the extent of $ 12m. From the evidence presented, the Committee concluded that a proper evaluation of the tenders was made and that the decision to award the contract to UNIVAC seems to have been the correct one based on the information available to the Post Office at the time. However, the Committee considers that the delays could have been shortened had the Post Office made representations to the contractor's parent company in New York earlier than it did.

Evidence was taken from the Department of Supply in relation to a payment made to a contractor towards the end of the financial year in what appeared to be an attempt to avoid the lapsing of an appropriation. The Committee was satisfied that the New South Wales district contract board acted quite properly in authorising the payment to the contractor.

In connection with the Department of Works the Committee inquired into the circumstances of a payment made by the Department's regional office in the Australian Capital Territory to a contractor before the supplies had been received and before the payment was required to be made under the contract. In all the circumstances the Committee concluded that the payment should not have been made before the equipment was delivered on site. Again in connection with the Department of Works, the Committee inquired into a number of instances in the Department's regional office in the Northern Territory where cheques were drawn towards the end of a financial year and held by departmental officers for subsequent delivery to contractors. The Committee concluded that the rate of payments had been deliberately accelerated in June 1973 in order to expend the appropriation, which was contrary to the directions issued by the Treasury. Action has been taken by the Department to improve the financial procedures at its regional office in Darwin. I commend the reports to honourable senators.

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