An audit of the Department of Finance’s program for reducing leased office space for Commonwealth Agencies has been successful, although the estimates of savings were judged as “not robust”.
In his report Management of Commonwealth Leased Office Property, Auditor-General, Grant Hehir found that while the Department had reduced surplus office space, established coordinated procurement arrangements for property services, improved the collection of property data and realised efficiencies, “Finance’s approach to estimating and tracking savings was not robust”.
Mr Hehir said the objective of the audit was to assess whether effective arrangements had been established by Finance to achieve value for money outcomes for Commonwealth leased office property.”
He said that since 2014, Finance had pursued a program of work on leased office property that had included three main activities.
Firstly there was an initiative to reduce surplus or vacant office space, focusing initially on Canberra and known as Operation Tetris.
Second was the establishment of coordinated procurement arrangements for property services, and finally the improved collection and use of property data.
“The Minister for Finance has announced savings of $300 million for Operation Tetris, and a further $100 million in savings from the coordinated procurement arrangements,” Mr Hehir said.
“It is evident that efficiencies and savings have been realised from this work, but…the reported $300 million in savings to entities was not supported by a sound methodology,” Mr Hehir said.
“Much of the savings estimated by the allocation analysis relate to changes in market conditions rather than from the aggregation of Government purchasing power.”
The Auditor-General made two recommendations which were agreed by the Department.
The 56-page audit report can be accessed at this PS News link and the audit team was Stephen Cull, Erica Sekendy, Emily Drown and Brian Boyd.
