The Australian National Audit Office (ANAO) has determined that government organisations are still inappropriately labelling contracts as containing confidential information, despite a series of Senate Orders and clarifications over the past few years.

In an audit of 78 government bodies, the ANAO found that 26 percent of contracts posted on the net were identified as containing confidential information. However, an in-depth study of 37 documents identified as containing confidential information revealed that only six of these were correctly labelled.

"These results emphasise the need, in contract negotiations, for rigorous application of the principle that contractor's information should not be protected as confidential unless there is a good reason do so," stated the report, after finding that many of the contracts had financial information the contractors had wanted to be kept confidential.

"The contractor must put a case to the agency for protecting information as confidential based on sound reasons, and the agency must be able to justify the use of confidentiality clause," explained the ANAO. "The fact that contractors wish to protect information as confidential is not sufficient reason for it to be protected."

The audit also found that many contracts were being identified as containing confidential information when they only contained standard non-disclosure agreements. The ANAO concluded that better training was needed to educate employees as to when a document should be listed as containing confidential information.

"The ANAO found that, in all of the audited agencies, the officers responsible for the preparation or coordination of the Internet listing were aware of the criteria for determining information to be protected as confidential, but staff responsible for the day-to-day management of contracts generally were not," said the report.

"All agencies, including those that had appropriate policies and procedures in place for establishing the Internet lists, should implement quality assurance processes, as necessary, to ensure the completeness and accuracy of the contract details on the Internet," it continued.

Background
In 2001 the Senate made an Order that required Ministers to table letters advising that each of the agencies they administer had placed a list of contracts on the Internet by the tenth day of the spring and autumn sittings of Parliament. The list of contracts was to indicate, amongst other things, whether any of the contracts listed contained confidentiality provisions. The general principal espoused by the Senate was that information in government contracts should not be protected as confidential unless there was a good reason to do so.

The audit, the fourth as part of the Financial Management and Accountability Act 1997 (FMA Act), cost AU$270,000 to conduct and is intended to identify any inappropriate use of confidentiality provisions in the contracts posted on the Internet. Of the contracts posted by the 78 government bodies, 26 percent (5287) were listed as containing confidential provisions and/or other requirements of confidentiality.

The ANAO selected 37 contracts identified as containing confidential information from six departments singled out for detailed review, which were:

• Australian Federal Police (AFP);
• Australian Greenhouse Office (AGO);
• Department of Defence (Defence);
• Department of Employment and Workplace Relations (DEWR);
• Department of Family and Community Services (FaCS); and
• National Capital Authority (NCA).