http://www.theaustralian.com.au/politic ... 5889424311
THE troubled Green Loans program will be replaced after scathing reports on the scheme found widespread compliance problems and cost blowouts.
Climate Change Minister Penny Wong has released the reports on her department's website today and announced the program will be phased out in coming months in favour of the new Green Start scheme.
The reports include the Faulkner inquiry, the Resolution Consulting Services report and the Protiviti Consulting report and will be tabled in the Senate.
The inquiry by former senior Victorian government bureaucrat Patricia Faulkner found a “widespread lack of compliance with the principles, guidelines and regulations relating to procurement in the rollout of the program and hence a lack of probity”.
It found evidence of “contract splitting” where work from the same supplier was split into separate contracts to circumvent a more competitive tendering process.
The inquiry examined the procurement of services to roll out the program by the Renewables and Energy Efficiency Division, now within the Climate Change Department.
It was scathing in its assessment, finding that procurement guidelines had not been followed and that contract costs blew out dramatically - in one instance by 19 times on the original contract price.
Key services procured included the accreditation, training and booking of home sustainability assessors, the design of sustainability tools and the provision of subsidised loans.
It also found “repeated and systemic” breaches of the Financial Management Act.
Tenderers were treated inconsistently and there was a lack of documentation to “substantiate the selection process”.
A high percentage of contracts were also found to have 50 per cent of the contract amount payable on contract signing.
There was poor documentation around the appointment of an organisation to accredit sustainability assessors and no quality assurance program for those appointed assessors.
In about 75 per cent of cases only one supplier had been approached.
The Resolution Consulting report was also scathing, identifying key failures including faulty program design and lack of control over the number of assessors in the program.
“The program did not clearly identify the number of assessors required to undertake the assessments planned,” it said.
It also found that assessors were paid 33 per cent more than originally budgeted - $200 instead of the $150 approved by the minister - for each home sustainability assessment.
“Overall, management controls were insufficient for a program that was unnecessarily complex and over engineered," it found.
"Assessors and financial partners have effectively become the drivers of the program outcome and there are significant reputational risks in closing off assessments and access to the Green Loans. There is no clear exit strategy for the Green Loans program."
The Protiviti Consulting report found that none of the staff in the Green Loans program had any formal training in procurement processes.
It also discovered that there was a lack of risk profiling of procurements, that procurement methods were “not justified” and there was a lack of evaluation of proposals.