Eighteen officials within the Australian Passport Office (APO) are now under investigation following a damning audit by the Australian National Audit Office (ANAO). The audit report, released on Thursday, details severe lapses in ethical standards and contracting procedures within the Department of Foreign Affairs and Trade’s (DFAT) Passport Office, leading to substantial misuse of government funds and conflicts of interest.
The findings revealed a string of infractions involving improper documentation, undeclared conflicts of interest, and favoring of predetermined suppliers, raising serious concerns about the transparency and integrity of the APO’s procurement processes. Out of 331 contracts awarded by the office, only a sample of 73—valued at $405.1 million—were scrutinized. These contracts, worth a total of $1.6 billion between July 2019 and December 2023, exposed major ethical breaches that have since prompted a sweeping internal review and increased public scrutiny.
The ANAO audit report indicates that the APO’s contracting processes “fell short of ethical standards” in multiple respects. Specifically, only 29% of the 73 contracts examined were found to be genuinely open to competitive bidding. In the majority of cases, the audit found that only one supplier was invited to bid, and in 53 of the 73 contracts reviewed, a preferred supplier had already been selected before the contract requirements were made public.
An incident exemplifying these issues involved the awarding of a contract worth $465,590 to a preferred supplier that had submitted its bid after the official closing time. According to DFAT’s established procurement policy, any tender submitted after the deadline is not eligible for consideration unless mishandling by DFAT is involved. However, the APO disregarded this protocol, further undermining the principles of fair competition and transparency.
A core finding of the audit was the frequency and nature of conflicts of interest that went unreported. The ANAO identified 16 instances in which personnel involved in awarding contracts had significant personal or professional relationships with the contracted parties, yet failed to disclose them. In one case, a contractor working within the APO’s procurement team outlined his desire to continue his engagement through a specific staffing agency, Peoplebank Australia Ltd, even suggesting preferred contract terms.
Correspondence between the contractor and a subordinate revealed that arrangements were made for a direct approach to Peoplebank. Despite the obvious personal connection, the contract was publicly reported as a competitive process, underscoring concerns over misrepresentation of competitive fairness in the procurement process.
The ANAO audit found evidence of other unreported conflicts. In a case involving a $1.4 million contract with Peoplebank, the chair of the evaluation panel had previously employed one of the candidates being assessed. The chair recommended the candidate as a preferred choice prior to opening the market, thus establishing a clear breach of impartiality standards. Further investigation showed that another DFAT official, who declared a conflict of interest, still participated in a procurement process involving a supplier that listed their spouse among the personnel. This same official later managed another direct procurement where their spouse’s involvement continued unchallenged.
Further investigation uncovered instances of favoritism based on social connections, with contractors using their influence within the APO to benefit personal acquaintances. Email and calendar records show contractors engaged in APO’s procurement processes were able to introduce friends or acquaintances into the workflow for potential contract work, sometimes receiving tokens of appreciation, such as gift vouchers.
Such practices have raised red flags about the overall ethical culture within the APO. These findings reflect a pattern where employees’ personal relationships with suppliers were leveraged, compromising the APO’s integrity and fairness in awarding contracts.
The ANAO disclosed that DFAT had been informed of these ethical concerns in April 2024, with recommendations to address the questionable procurement practices. Initially, DFAT stated it lacked “sufficient investigatory resources” to pursue these matters further. After additional irregularities surfaced, DFAT enlisted an experienced investigator from the defense department to conduct a deeper inquiry.
With 18 officials currently under investigation and more potentially implicated, DFAT has pledged to reform its contracting processes and improve compliance. The audit has raised concerns that the observed ethical breaches in the APO’s procurement practices may be indicative of systemic issues across the department, given that the review only encompassed a small fraction—73 out of 331 contracts. A deeper examination may therefore reveal additional violations, leading to further scrutiny of DFAT’s overall procurement integrity.
