Tourism Australia breached federal rules across $256m worth of contracts, audit finds

The Australian National Audit Office's review of the national tourism body, handed down on Monday, found the agency "regularly fails" to act ethically in its procurement processes including the "fair treatment of suppliers and through the declaration and management of any conflicts of interest".

"TA [Tourism Australia] makes insufficient use of open and competitive procurement processes, with 70 per cent of the 33 procurements examined in detail by the ANAO not involving open competition," the Auditor-General found.

"An appropriate procurement policy framework is not in place, and TA's conduct of procurement activities regularly fails to adhere to requirements under the CPRs."

Tourism Australia reported 55 contracts with a start date falling within the last three financial years as of June 2024, at a total value of $265.6 million.

None of the contracts analysed during the audit, including some "high-risk and high-value arrangements," had a contract management plan in place, the report found.

"The value of these contracts (where sufficient evidence was available) ranged from $102,980 to $311.3 million at contract execution," the audit said.

Conflict of interest declarations were not completed by staff in four per cent of contracts, with the report identifying systemic failures on behalf of the tourism agency to keep sufficient documentation on file.

"For 8 per cent of the contracts where advisers were appointed to assist with the procurement process, TA's records did not include a complete list of the individuals involved," the report found.

For more than half (55 per cent) of contracts, Tourism Australia did not include clear performance requirements in the contract. The agency took seven months on average to publish contract notices on AusTender for 40 per cent of contracts.

Under mandatory rules, government entities must report a standing contract offer within 42 days of entering into an arrangement.

The agency advised auditors there had been a "heavy reliance on the procurement team on being notified of the execution of contracts" in the absence of a sufficient contract management system.

Loss of key records was largely due to poor record-keeping practices and staff turnover, the audit found.

The report noted an instance where documents relating to a $110,000 contract awarded to public relations firm The Buzz Group in 2021 could not be retrieved as they were "stored in emails and managed by an employee who no longer works with Tourism Australia".

Tourism Australia agreed to all nine recommendations put forward by the Auditor-General in its response to the review.

"Some of the report's findings relate to work undertaken during the unprecedented events of the Covid-19 pandemic, when Tourism Australia's primary focus was on the emergency response to support an industry in crisis," the agency said.

"Nevertheless, Tourism Australia accepts the recommendations for improvement to ensure that it can better demonstrate that the agency's procurement and contract management activities comply with Commonwealth procurement Rules and achieve value for money."