A design concept for the Australian War Memorial upgrade. Photo: Scott Carver Architecture.
While the Auditor-General found management of the Australian War Memorial’s decade-long upgrade to be “largely effective”, its recent report discovered conflicts of interest and failures to properly inform ministers.
The Australian National Audit Office (ANAO) was commissioned to review the now-$540 million development project so Parliament could be assured of its appropriate management.
Since $498.7 million was allocated to the memorial in 2018 for the ”nationally significant project”, its plans have been criticised for being excessive and unnecessary.
A 2020 parliamentary inquiry into the expansion received one submission against it bearing 82 signatories, including former AWM directors Brendon Kelson and Steve Gower. It claimed the money should be spent on benefits to veterans, their families and other institutions.
Despite more than 600 submissions against it, the National Capital Authority approved the expansion in 2021.
The memorial’s incumbent director, Matt Anderson, told the ABC the project was found by the ANAO to represent value for money and had never identified any misconduct.
As of October last year, there were 221 contracts under the upgrade, representing a total value of $454.6 million. While the report made no findings against any of the firms involved, deficiencies were raised in the memorial’s recordkeeping, conflict-of-interest management, and quality of advice provided to ministers.
Under the Australian Memorial Act 1980, AWM must obtain approval from the Minister for Veterans’ Affairs before entering any contract set to pay or receive more than $1 million.
When the procurement process began in 2018, the memorial engaged Xact Project Management for services it required in the development of a Detailed Business Case (DBC). The work was initially valued up to $319,572, but in March 2019 changed to $999,999 – one dollar below the threshold for ministerial approval.
Another contract with Imagination (Australia) for stakeholder engagement had been drafted to a value of $1.05 million but was later “split into two contracts with the same supplier for $841,875 and $207,659”. As they were each under the $1 million threshold, neither required ministerial approval and they were signed on the same day.
The Auditor-General’s report also noted a delegate and evaluation team’s failure to declare conflicts of interest. They were later found to have a working relationship with the incumbent project manager.
As the delegate was not a senior executive, they were not required to complete an annual declaration of interests. Later, it became clear that they had approved a contract with Lendlease six months after being employed by that company.
In April 2019, law firm Sparke Helmore was hired but never consulted for advice the memorial was expected to seek before publishing its probity guidance five months later. Photo: AWM.
Later in 2021, a parliamentary committee heard the then-Coalition government claim its DBC for the memorial’s project was “closely examined by the Department of Veterans’ Affairs, Department of Finance and Cabinet” before being approved by the Auditor-General.
However, ANAO’s report said there was no evidence the DBC was considered by the government, and its approval was based on a status update that was 75 per cent confident in the project’s cost.
A further $50 million was allocated in March 2022, four months after the government’s claim and three months before a federal election.
The memorial’s council asserts this extra funding had been verbally raised with the Veterans’ Affairs Minister due to supply chain disruptions and the availability of material and labour. Yet the report said there was no evidence of a written brief or minutes from that meeting.
Five recommendations were handed to and accepted by the memorial, along with one for the Department of Finance that has been agreed to in principle but is awaiting further approval from the government.
The latter calls for an update to guidance on AusTender reporting after the review found that 27 per cent of initial contracts were not reported within 42 days as the national procurement information system requires.
Memorial council chairman Kim Beazley said the project had faced “unprecedented and unforeseeable external challenges” such as COVID-19 and record high construction sector inflation since it began. The former Labor leader welcomed the audit and said they were now working to close out its final recommendations.
Completion of the project is set for June 2028. The memorial remains open to the public throughout construction.
