Three years later,after the pandemic had pushed up the cost of the project,the War Memorial sought an extra $50 million in federal support.
The auditor-general found that in January 2022,then-veterans’ affairs minister Andrew Gee was briefed by the memorial of the cost blowout. There are no minutes or written briefs of that meeting.
By February 24,then-treasurer Josh Frydenberg had formally written to Morrison seeking the extra $50 million. The prime minister,in a letter dated March 4 – two months out from that year’s election – approved the money.
But the War Memorial council which oversees the institution,headed at the time by media billionaire Kerry Stokes,only agreed on March 11 to formally seek the additional funds.
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According to the auditor-general,part of the problem was the cost of contracts and the oversight of them by staff within the memorial.
It cited the case of the contract awarded to Xact Project Management. In March 2018,it was awarded a contract for project management services worth $319,572. This was varied in March the following year to $999,999 which is $1 below the threshold at which it would need approval by the veterans’ affairs minister.
Soon after,Xact was one of several tenderers for ongoing work on the project. It won that tender with an estimated cost of $1.1 million over three years.
The contract was actually reduced to $805,000,again under the threshold for ministerial approval,to run until April 30,2020.
That contract,extended to the end of entire project,has now been varied twice,to $6.6 million and in mid-2021 to $16.9 million.
The auditor-general found documents sent about many of the contracts relating to the project and sent to various veterans’ affairs ministers were “insufficient”. It found the documentation was “insufficiently detailed to support the minister in carrying out their duties” under the Public Governance,Performance and Accountability Act.
In two cases,contracts were split “so as to not exceed” the $1 million ministerial approval threshold.
“Conflicts of interest were not adequately documented and declared or known conflicts were not adequately managed,” the auditor-general found.
“Incumbency risks related to the procurement for ongoing project management services were not adequately managed and steps were taken to avoid seeking ministerial approval for the entering into contracts on two occasions.
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“Value for money assessments for contract variations have not been consistently undertaken. Assessments that were completed did not always demonstrate how value for money would be achieved.”
The War Memorial told the auditor-general the report had recognised the “unique challenges” of keeping the memorial open during the construction,the impact of the pandemic on construction and high inflation on building costs.
It accepted the five recommendations made by the auditor-general,adding it was undertaking action to address many of the issues raised in the report.
“The memorial believes the report will provide government with assurance that,through clearly documented strategic planning,innovative solutions and constant improvement,is it successfully managing the continued challenges facing any major project at this time in order to deliver high-quality outcomes for veterans,their families and all Australians,” it said.
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