The government is failing to ensure it’s getting value for money in its Murray Darling Water water buyback scheme and needs up update conflict of interest safeguards and better manage risks, an audit has found.
Since 2016 the government has been strategically purchasing water via limited tender to protect the environment in the basin, which has about 2.6 million people living on it and produces large amounts of food and fibre, but also supports huge numbers of waterbirds, fish and wetlands.
Auditor General Grant Hehir looked at 27 transactions worth $190 million of made between January 2016 and December 2019.
His report found that arrangements in place to support the government’s strategic water purchases weren’t effective and the Department of Agriculture, Water and Environment didn’t apply approved policy, planning or guidance to all procurements.
“The price the department paid for water entitlements was equal to or less than the maximum price determined by valuations,” he found.
The report said: “The department did not appropriately manage procurement risks. While the department identified risks associated with the broader water recovery strategy, there is limited evidence of risks being raised or managed for individual procurements”.
The ANAO said it was also unclear whether instructions given to the department by the minster were fully executed, and briefings to the minister failed to give an indication of how the procurements would obtain a triple bottom line in keeping with the original commitment.
“The department did not consistently apply the guidelines it developed to all limited tender procurements. Four offers were assessed and provided to the Minister for approval prior to the guidelines being fully developed and approved,” the ANAO says.
The report recommends improving procurement guidance, developing assurance mechanisms, updating conflict of interest arrangements and doing better evaluation.
Greens Water spokeswoman Sarah Hanson Young, who was among a group referred of MPs who referred research and allegations of overpayment to the auditor, said the report found the government didn’t appropriately manage conflicts of interest or even try to achieve value for money.
“At best, this report reveals incompetence, at worst it shows another taxpayer rort,” she said.
The Australia institute, which conducted analysis that was referred to the ANAO, said the audit showed the government had paid record prices for water.
“Today’s ANAO report has shown the Commonwealth did not properly manage $190 million worth of water purchases,” Director Rod Campbell said.
“The implementation of the Murray Darling Basin Plan has been riddled with problems from day one and now we know the department has not consistently applied approved policy, planning and guidance to water purchase agreements.”
Secretary of the Department of Agriculture, Water and Environment Andrew Metcalfe said the department agreed with all four recommendations made by the ANAO and was implementing administrative changes were relevant.
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