Probity and fairness
- You must always act fairly and be seen to act fairly.
- To this end, you should introduce probity controls around every step of the procurement process.
- You are responsible for understanding your obligations. While you can appoint a probity auditor or adviser to help, this should not be standard.
- Procurement is particularly susceptible to corruption.
- You must also embed controls in your business practices and administration to minimise the risk of corruption.
General obligation to ensure probity and fairness
You must be seen to act fairly at all times. Ethical, transparent and principled work — or probity — is a key objective of government procurement policy.
That said, while ensuring probity is an essential part of procurement, you must not use it as a road-block or a way to stifle innovation by reducing risk.
You must follow your agency’s policies and codes of conduct around actual or perceived conflicts. As a general rule, you must never accept gifts or benefits from suppliers.
Any conflict of interest or failure to act fairly will undermine your agency’s reputation, diminish the government’s standing as a business partner and lead to poorer procurement outcomes.
Probity and fairness controls
You must develop internal controls that help you fulfil your statutory obligations around probity and fairness. This includes defining internal delegations and accountabilities, but also making sure all employees understand they’re accountable when it comes to ensuring probity.
You should also publish data and reports on your procurement activities, to provide open information on your performance and outcomes.
To reinforce your commitment to ensuring probity and fairness, you should:
- monitor how you’re complying with legal, policy and reporting requirements
- review your policies approximately every 2 years
- define best practice in your organisation’s documents, such as codes of conduct
- train employees to manage conflicts of interest
- make sure employees understand corruption-prevention policies and procedures
- include procurement as a risk area in your internal audit and corruption risk management processes.
Your framework for managing procurement should specifically embed processes that:
- ensure you treat all suppliers fairly and consistently
- clearly explain procurement procedures
- make it easy for all suppliers to do business with you
- make sure you don’t engage with the market unless you intend to proceed. This includes having your budget approved, unless you’re engaging in market testing and research
- provide ways for anyone to report conduct or behaviour inconsistent with your legal obligations, policy and principles
- safeguard security, including protecting suppliers’ confidential information.
Probity advisers and auditors
You should understand all procedures concerning probity and fairness. Everyone within your agency should be clear about the principles they must follow.
You, your managers and other staff are all accountable for how you conduct procurements and your procurement decisions.
You may engage a probity auditor or probity adviser for complex or high risk procurements. However, this should be the exception, not the rule. Engaging a probity auditor or adviser is not a substitute for good management practices.
Engage a probity adviser or auditor
Whenever you engage an adviser or auditor you must be satisfied they’re independent and there’s no real or perceived conflict of interest.
Don’t use advisers or auditors already doing other work inside your agency, except when the audits are directly linked or there are other mitigating circumstances.
To ensure independence, be careful not to engage the same probity advisers or auditors continually or serially. Also, be mindful that you may be asked to report to the Procurement Board on your use of probity advisers and auditors.
Obligation to prevent corruption
Procurement is a business sector vulnerable to corruption and maladministration. You must embed corruption controls in your business practices and decision-making.
The Independent Commission Against Corruption’s (ICAC’s) report, 'Corruption and integrity in the NSW public sector’ outlines the factors that contribute to corruption and other forms of serious misconduct. It also identifies high-risk areas and emerging trends.
Conflicts of interest
ICAC recommends you identify, disclose and manage all potential conflicts of interest of staff within your agency.
To do this, many agencies set up a register of conflicts of interest that have been disclosed by their staff. A central register provides a single source of information that can be easily analysed and used to assist an audit or investigation. It also allows agencies to ensure that conflicts of interests are being managed in a consistent, acceptable manner.
Find out more in ICAC’s report ‘Corruption and integrity in the NSW public sector’.