Our intentions: Looking at integrity practices in central government emergency procurement

20 September 2022: During the past three years, particularly in response to Covid-19, a range of goods and services were procured quickly by central government agencies. Procuring goods and services at speed can create integrity risks. We’re looking at how well central government agencies support acting with integrity during emergency procurement processes.

Showing integrity depends in part on transparent processes and decision-making. Transparency includes being open about actions taken, decisions made, processes put in place, and progress. Transparency for external audiences is also important, because openly monitoring and reporting on performance is essential to being accountable and to maintaining the public’s trust and confidence.1

Poor procurement practices can erode trust and confidence in the public sector. During the last three years, our work programme has aimed to support people involved in procurement to manage it well and in a principled way.

The Government Procurement Rules (the Rules) require central government agencies to apply minimum standards to their procurement activities. The Rules include requirements to openly advertise contracting opportunities, give interested parties enough time to respond, and publish information about the contracts awarded.

In an emergency, agencies need to be more flexible in how they obtain the goods and services they need for their response. For example, in an emergency, agencies are permitted to obtain goods and services without advertising.2

We want to understand how much procurement is carried out without open advertising under the emergency procurement exemption because current available data is incomplete. We are concerned that information gaps undermine transparency in central government agencies’ emergency procurement processes and create integrity risks. Transparency International New Zealand has also raised concerns about this lack of data.3

We also want to better understand the emergency procurement practices used by central government agencies. Our work will include examining agencies’ compliance with the Rules and associated emergency procurement guidance, the processes agencies have in place, and how senior leaders support integrity practices when their staff procure goods and services in an emergency.

We expect emergency procurement carried out because of Covid-19 to be a part of this audit, but we are also interested in how the Rules and emergency procurement guidance are used in different emergency situations.

What we’re focusing on

We will provide Parliament and the public with an independent view on how well central government agencies support integrity practices when they procure goods and services during an emergency.

To do this, we will consider:

  • the extent to which central government agencies comply with the Rules and with current emergency procurement guidance;
  • how effective central government agencies’ internal procurement systems and processes are at supporting integrity in emergency procurement; and
  • how effective senior leaders are in ensuring that integrity practices are followed during emergency procurements.

The difference we expect to make

Our performance audit will, where necessary, recommend actions to help central government agencies improve integrity practices in procurement.

Our work is also a chance to highlight good practice that could help other organisations to understand what good integrity practices in procurement look like and what they require.

Please use the feedback form on the right if you’d like to speak to a staff member about this performance audit, make a suggestion, or ask a question.

We expect to complete this work in 2023.

1: Office of the Auditor-General (2022), Putting integrity at the core of how public organisations operate.

2: The exemption is specific to Rule 14-9a: Exemption from open advertising. Ministry of Business, Innovation and Employment, New Zealand Government Procurement Rule 14.

3: Miller, L (November 2021), Urgent advice to Parliament: Increase procurement transparency.