Government procurement probity: three lessons from recent audit findings

By Phil O'Toole

Managing Partner

Across Commonwealth, state, territory and local government, the same procurement and grants probity failures continue to appear in audit findings. Poorly documented decisions, unmanaged conflicts of interest and weak oversight do more than create compliance gaps. They can undermine value for money and public confidence.

What is probity in government procurement?

Probity is the evidence of ethical behaviour in a procurement or grants process. In practice, it means decisions are fair, transparent, accountable, appropriately documented and capable of withstanding scrutiny. Effective probity controls should be proportionate to the risk and complexity of the activity, rather than applied as a one-size-fits-all compliance exercise.

What recent audit findings tell government agencies

Recent Australian audit reports point to recurring weaknesses across procurement and grants administration:

• Poorly justified or inadequately documented sole-source procurement
• Unmanaged or inadequately assessed conflicts of interest
• Limited audit trails and poor record keeping
• Weak procurement, contract and program oversight
• Decisions that do not clearly demonstrate value for money

The Australian National Audit Office’s 2024–25 Performance Audit Outcomes report found that 69% of audits examining grants or procurement reached adverse conclusions. Common themes included non-compliance with established requirements and shortcomings in probity, transparency and competition (Australian National Audit Office, 2025).

The Audit Office of New South Wales also highlighted deficiencies in program oversight and monitoring, high-risk purchasing practices and the assessment of consultant conflicts of interest (Audit Office of New South Wales, 2026).

In Western Australia, the Auditor General identified 109 expenditure-control weaknesses across 61 local governments, including late purchase orders and inadequate quotations (Office of the Auditor General Western Australia, 2026). Queensland and New South Wales audit findings have similarly emphasised procurement controls, contract management, segregation of duties, vendor-master-file risks and compliance with tender requirements.

These are not simply technical compliance issues. They affect confidence in how public money is managed.

1. Probity planning should begin before market engagement

Many procurement and grants failures begin in the design phase. Unclear objectives, inadequate planning, poorly framed evaluation criteria, incomplete conflict declarations and uncontrolled supplier engagement can undermine a process before a formal decision is made.

Probity planning should not be reserved for high-value procurements. The level of formality should reflect the risk, sensitivity and complexity of the activity, with probity requirements identified and documented early.

What should a probity plan include?

A practical probity plan should identify the key risks and establish proportionate controls covering:

• Conflicts of interest
• Confidentiality and information security
• Supplier communications and interactions
• Evaluation and decision-making processes
• Record keeping and audit trails
• Escalation and independent assurance

The goal is not more paperwork. It is a process that supports fairness, transparency, accountability and defensible decision-making. Probity is not an obstacle to delivery. It is what makes a timely decision defensible after the fact.

2. Independent probity advice must be real, visible and useful

An independent probity adviser can strengthen public-sector accountability, but cannot replace it. The adviser’s value comes from bringing sufficient distance, expertise and challenge to decisions made under delivery pressure.

Key questions include:

• Is the market approach fair and capable of demonstrating value for money?
• Are conflicts declared, assessed, managed and recorded?
• Are the evaluation criteria aligned with the published requirements?
• Is every material decision supported by a clear evidence trail?
• Are changes to scope, pricing or contract terms governed with the same discipline as the original procurement?
• Could the agency confidently explain its decision to the public, Parliament, an auditor or an unsuccessful supplier?

Independence also requires safeguards. Probity advisers should have clear terms of reference, no conflicting commercial interests, access to decision-makers and a documented process for escalating concerns. Their role is to improve the process, not retrospectively endorse it.

3. Value for money is a governance outcome, not simply the lowest price

Price matters, but it is only one component of value for money. Short-term savings may cost more over time if a decision introduces higher risk, poorer outcomes, additional contract-management effort or future remediation.

For procurement, value for money depends on disciplined planning, genuine competition where appropriate, evidence-based evaluation, effective contract management and active monitoring of supplier performance, variations, milestones and benefits.

For grants, it requires transparent eligibility and assessment processes, consistent treatment of applicants, documented approvals, robust acquittals and evaluation of whether intended benefits were achieved.

How to strengthen probity across the procurement and grants lifecycle

Strong organisations do not wait for an audit report to reveal a gap. They build assurance into the lifecycle through:

• Independent review of high-risk procurement and grant design
• Conflict-of-interest, confidentiality and communication controls before market engagement
• Real-time probity advice at critical decision points
• Clear records explaining both the decision and its rationale
• Contract and grant-performance monitoring that tests outcomes, not only expenditure
• Post-implementation reviews that improve the next process

When should an organisation engage a probity adviser?

Independent advice may be particularly valuable when a procurement or grant activity is high-risk, sensitive, complex, politically visible, contested or likely to attract external scrutiny. The scope of advice should remain proportionate to the circumstances and support, rather than displace, accountable decision-making.

Build confidence before decisions are tested

Australian governments are entrusted with public funds. Every procurement and grant decision is both a delivery decision and a trust decision. Good probity builds confidence that the process was fair, transparent, competitive where appropriate and directed towards genuine value for money.

Centium provides independent probity and procurement-advisory support for government procurement and grant activities. We help clients identify risks early, strengthen decision-making and establish a clear, defensible audit trail.

Planning a procurement or grant activity? Contact Centium to discuss proportionate probity advice and assurance.

Frequently asked questions

What is probity in procurement?

Probity is the evidence of ethical behaviour in a procurement process. It supports fair treatment, transparency, accountability, appropriate management of conflicts and defensible decisions.

What is the purpose of a probity plan?

A probity plan identifies the main risks in a procurement or grants activity and sets out proportionate controls for conflicts, confidentiality, communications, evaluation, decision-making, records and escalation.

What does a probity adviser do?

A probity adviser provides independent, real-time advice on the fairness, transparency and defensibility of a process. The adviser strengthens accountability but does not replace the responsibilities of decision-makers.

Is value for money the same as choosing the lowest price?

No. Price is one factor. Value for money considers the overall outcome, including quality, risk, performance, whole-of-life cost and the effort required to manage the contract or grant.

References

Audit Office of New South Wales. (2026). Internal controls and governance 2026: Grants, consultants, purchasing cards and technology.

Australian National Audit Office. (2025). 2024–25 performance audit outcomes. Commonwealth of Australia.

Office of the Auditor General Western Australia. (2026). Local government 2025: Financial audit results (Report 13: 2025–26).

Queensland Audit Office. (2023, July 17). Our new tool to help councils with procurement.