18 Officials Under Investigation at Australian Passport Office

An Australian passport pictured in Brisbane, Australia, on July 25, 2013. AAP Image/Dan Peled

A federal audit has found the Australian Passport Office (APO) ignored government procurement rules and wasted money, including $31,422 on travel costs supposedly for “planning” trips to set up a conference in Port Douglas, Queensland.

But the conference later took place in Canberra, which resulted in the forfeiture of $104,196 in deposits paid to the venue in Port Douglas. The Canberra venue then cost a further $19,940.

Staff behaviour at the Office—part of the Department of Foreign Affairs and Trade (DFAT)—was uncovered during a routine examination of its efficiency by the Australian National Audit Office (ANAO). In the resultant fallout, 18 staff have been placed under investigation.

Irregularities During Tendering

The ANAO looked at 331 contracts, worth a total of $1.58 billion and awarded between July 1, 2029, and Dec. 31, 2023. It found that open and competitive processes were not used, so none of the contracts complied with the Commonwealth Procurement Rules and DFAT’s procurement policies.

Procurement decision-making was not sufficiently accountable and was not transparent and “procurement practices fell short of ethical standards.”

In this period, 243 new contracts totalling $476.5 million were entered into, in addition to existing contracts. These had also not been allocated by an open request for tender and in over three-quarters of those cases, the Passport Office had identified its preferred supplier even before starting the process.

In one case, the successful tenderer was late submitting their bid—an automatic disqualification under the rules—and was still awarded the contract.

“The [Passport Office] had already identified its preferred supplier or candidate prior to approaching the market for 52 contracts totalling $305.5 million, which equates to 71 percent by number, or 75 percent by value of the 73 APO contracts examined,” the ANAO said.

Yet the APO staff involved claimed that all the contracts had been put to open tenders and produced documents to show that quotes had been sought from Indigenous firms when this hadn’t occurred.

The contracts cover everything from the secure delivery of passports to call centre and accounting services, the supply of artworks, and labour hire to cope with the sharp rise in demand after borders reopened.

Even the contractor who managed the APO’s procurement team had his contract extended repeatedly for 10 years. He initiated an extension by emailing a subordinate (who was also a contractor), telling them to action the extension. The APO, however, claimed the contract had resulted from an open tender process.

Conflicts of interest were not adequately managed, and in 16 cases, they were not declared at all. On two occasions, a contract was awarded to the spouse of a DFAT employee.

In another, the chair of an evaluation panel had previously been the manager of one of the people being assessed, and in another, a panel member was a contractor for one of the suppliers, which subsequently won three of the four contracts worth $1.6 million.

The audit also found cases where staff had told contractors how to fill in forms applying for tenders and contract extensions.

All this cost the Department significant amounts, which could otherwise been avoided.

Tenders classified as “low risk” by Passport Office staff cost up to seven times what was budgeted, and in one case, 10 times the initial estimate.

Others were extended without proper process leading to costs soaring by 1,000 percent. And one project came in at more than 1,800 percent over budget, costing hundreds of millions of dollars.

Insufficient Oversight by DFAT

“The Department’s central procurement team has not exercised sufficient oversight of the APO’s procurement activities,” the audit report says.

“The Department also does not have adequate arrangements in place for the identification and reporting of breaches of finance legislation.”

In response, DFAT has advised that “it considers there are clear indications of misconduct involving a number of current or former DFAT officials and contractors as well as clear cultural issues,” the ANAO said.

“The procurement of a resort in Port Douglas did not comply with the requirements of the DFAT procurement policy and did not represent value for money. The Department noted that the justification for this venue and location was that the event would benefit the regional economy; however, [it was] also considered that this was not substantiated by any evidence or analysis,” DFAT advised.

It has promised to change its procurement practices to “improve compliance and efficiency” and said it had initiated activities to address “specific areas of concern regarding actions of staff.”

While it’s cooperating now, DFAT initially resisted providing ANAO with information.

In October 2023, the auditor general asked the Department to provide some emails, but it refused, forcing the ANAO to resort to its compulsory information-gathering powers under the Auditor-General Act.

Opposition Responds

Coalition foreign affairs spokesperson Simon Birmingham said the ANAO’s revelations “revealed unethical and grave misuse of taxpayer’s money” and he planned to ask further questions of DFAT and the APO during Senate Estimates next week.

“The Australian Passport Office (APO) is meant to provide Australians with an official government document and adhere to the Commonwealth Procurement Rules to administer this service,” Birmingham said.

“Australians are being taken for a ride twice over before they’ve even left the country, firstly by paying the highest passport prices in the world, and secondly as officials appear to have been leaving taxpayers exposed via questionable procurement practices.”