3.1
Chapter 3 sets out the findings of the Joint Committee of Public Accounts and Audit’s (JCPAA) inquiry into Commonwealth procurement, based on Audit Report No. 13 (2016-17), Delivery of Health Services in Onshore Immigration Detention. The Department of Immigration and Border Protection (DIBP) was the audited agency. The chapter comprises:
Committee conclusions and recommendation
Committee conclusions and recommendation
3.2
As the 2014 Commonwealth Procurement Rules explain, ‘Procurement continues through… the ongoing management of the contract’. While the other audits under consideration in this inquiry focus on the initial phase of the procurement process, this chapter concerns the subsequent management of a contract entered into between DIBP and International Health and Medical Services (IHMS).
3.3
The Committee notes the Australian National Audit Office (ANAO’s) conclusion that the contract in question ‘was developed by the department based on a strategic analysis of shortcomings that had arisen under earlier contracts’.
3.4
However, the Committee also notes that the ANAO identified areas for improvement in DIBP’s contract management, particularly as it relates to performance monitoring of:
the quality of health services being delivered; and
areas of health service delivery risk, including those related to detainees with mental health conditions.
3.5
The Committee was concerned to note the ANAO’s findings that the monitoring arrangements were ‘not sufficiently robust’; that key documents that support the delivery of health services and the contractual partnership remained outstanding more than 12 months after they were due for completion; and that DIBP did not validate the data capture or treatment methods of the data provided by the contractor on which performance is measured. These ‘shortcomings in monitoring and oversight arrangements’ affected DIBP’s ability to ensure delivery and proper oversight of safe and efficient health care services.
3.6
The Committee concluded that action to address areas for improvement identified by the ANAO are required, and therefore requests that DIBP report back on measures it has taken to address the concerns raised in the ANAO report, including:
the implementation of appropriate performance monitoring of the contractor;
the implementation of a risk-based remediation plan;
progress on finalising key performance documents, including the Departmental Medical Audit Tool and the Health Policy and Procedures Manual; and
the outcomes of any targeted audits it has undertaken to assess IHMS’ policies and procedures against the relevant clinical benchmarks
3.7
The Committee notes that DIBP did not make a substantive submission to this inquiry regarding the progress in the areas about which this audit raised concern. It is expected that DIBP will provide information in response to this audit report, to enable the Committee to assess the progress DIBP has made in addressing the concerns identified by the Auditor-General.
3.8
The Committee recommends that the Department of Immigration and Border Protection reports back to the Committee on:
its implementation of appropriate performance monitoring of the contractor for the provision of health services in onshore immigration detention, including assessments against performance measures set in the contract;
its implementation of a risk-based remediation plan;
its progress finalising key documents, including the Departmental Medical Audit Tool and the Health Policy and Procedures Manual; and
advice as to which targeted audits have been undertaken to assess the contractor’s policies and procedures against relevant clinical benchmarks, and the outcomes of all such targeted audits.
Review of evidence
Implementation of ANAO recommendations
3.9
DIBP agreed with both ANAO recommendations of Audit Report No. 13 (2016-17), Delivery of Health Services in Onshore Immigration Detention. In its submission to this inquiry, DIBP noted that it is ‘finalising a risk based remediation plan over the next 6, 12 and 18 months’.
3.10
ANAO’s audit assessed the effectiveness of DIBP’s administration of health services in onshore immigration detention centres; it did not examine the procurement process for the awarding of the contract.
3.11
The audit found that, while DIBP’s administration had improved from previous contracts, further scope for improvement existed:
… primarily through strengthening arrangements for monitoring:
the quality of health services being delivered; and
areas of health service delivery risk, including those related to detainees with mental health conditions.
Contract management processes
3.12
The ANAO audit of DIBP’s contract management found:
… a number of strengths in the contractual framework, but it also highlighted that there had been insufficient focus on assessing and monitoring contractor performance and the need for the department to obtain greater assurance that health services were being delivered as intended.
3.13
DIBP’s submissions to this inquiry focused on audit no. 16 – Offshore Processing Centres in Nauru and Papua New Guinea: Procurement of Garrison Support and Welfare Services, which the Committee reviews in Chapter 4. On many of the key findings of ANAO audit no. 13, DIBP has not presented the Committee with any further information or updates. However, DIBP’s submission noted that:
Based on the insights provided in the report, the Department is finalising a risk based remediation plan over the next 6, 12 and 18 months. This plan focusses on introducing an annual risk-based program to provide quality assurance over the contract service delivery, improving the performance reporting framework and reviewing triaging and medication management policies and procedures.
The Department has also utilised the ANAO Report to benchmark the management of offshore contracts and assist in the development of a contract management framework for all detention related contracts onshore and in the regional processing centres.
3.14
A penalties and rewards system was built into the contract as a means of performance management, in part to focus on outcomes rather than processes. This system resulted in the contractor being penalised over $300, 000 in the first six months of the contract’s term. The performance management system was based on seven high-level Key Performance Indicators, which in turn informed 17 specific performance measures, developed by DIBP to monitor the contractor’s performance.
3.15
However, ANAO analysis found that the monitoring arrangements established by DIBP were ‘not sufficiently robust’: as of March 2016, ANAO found that only 9 of the 17 performance measures were supported by an appropriate methodology for assessing the contractor’s performance.
3.16
The ANAO noted that key documents that support the delivery of health services and the contractual partnership with the providers, including the policy and procedures manual, remained outstanding (as of March 2016) more than 12 months after they were due for completion.
3.17
Similarly, the Departmental Medical Audit Tool – required for the assessment of multiple performance measures concerning the quality of health care provided – had not been finalised as of the ANAO audit (a draft version was in use). ANAO commented that the absence of a finalised version had ‘compromised the department’s ability to assess the quality of health care delivery and undermined its ability to determine whether contractual obligations are being fully met’.
3.18
Contractor self-reporting is heavily utilised in the performance measurement framework, but the ANAO audit revealed that while DIBP had validated that the wording of performance measures and associated methodologies was accurate, it ‘did not validate the data capture method or the data treatment within the spreadsheet’. As such, ANAO commented that, ‘Given the reliance that is placed on the spreadsheet, there would be merit in the department reviewing the data capture and treatment methods’.
3.19
DIBP advised ANAO in March 2016 that the department would ‘undertake targeted audits’ to assess IHMS’ policies and procedures against relevant clinical standards. By June 2016, none had been undertaken.