Victorian Govt poor at managing telco spend



news An audit of three of the Victorian Government’s largest agencies has found that none can be confident that they are effectively managing their spend on telecommunications services.

The audit, produced by the office of Victorian Auditor-General John Doyle and published this week online as a PDF, noted that the Victorian Government’s total expenditure on fixed voice and mobile services through whole of government arrangements was about $53 million in the 2011-2012 financial year. Of that amount, the agencies which spent the most were the Victorian Police ($6 million), the Department of Human Services ($3.5 million) and the Department of Justice ($3.5 million). The spend is based on contracts inked under the state’s Telecommunications Carriage Services agreements signed in 2004.

“Telecommunications are vital to the delivery of government services. Expenditure on telecommunications across all agencies has grown significantly in recent years—largely driven by the growing reliance on mobiles as communication devices,” wrote Doyle in the report. However, the auditor found that none of the agencies examined were effectively managing that spend.

“None of these agencies had sufficient organisation-wide controls to effectively manage the major drivers of both fixed voice and mobile expenditure—particularly call costs, mobile data use and line rental,” the report stated.

”Weak central oversight, coupled with highly variable and devolved management arrangements within each agency means that, while there were isolated examples of good practice that produced material savings, it was not evident that these were being consistently applied throughout the organisation.”

“None of the agencies examined demonstrated regular whole-of-organisation oversight and monitoring of telecommunications usage and expenditure. Nor was it evident that executive management was systematically apprised of the effectiveness of related management controls and initiatives. These weaknesses impede the capacity of each agency to identify and minimise waste and to fully leverage savings opportunities across the whole organisation.”

Some of the steps which the agencies could take to rectify the issues, according to the report, included making sure that they are being billed correctly by suppliers; Monitoring and minimising redundant fixed voice landlines so that they do not continue to incur unnecessary monthly fees; Accessing the best call and data rates on offer via the whole-of-government 
arrangements; And systematically identifying and recovering costs incurred for excessive personal 
use of mobile phones.

The service providers which stand to benefit most from the ineffective management of telecommunications spend are primarily Australia’s largest telcos Telstra and Optus, which between them hold the bulk of the Victorian Government’s telecommunications contracts. However, Japanese corporate telephony vendor NEC is also listed as a supplier to the government.

The news comes as the Victorian Government continues to suffer from a poor reputation in terms of its ability to manage major technology projects and deliver key technology services. In November 2011, Victoria’s Ombudsman handed down one of the most damning assessments of public sector IT project governance in Australia’s history, noting total cost over-runs of $1.44 billion, extensive delays and a general failure to actually deliver on stated aims in 10 major IT projects carried out by the state over the past half-decade.

The state has released a wide-ranging ICT strategy designed to address the issues, and it has also kicked off a process to hand off to external suppliers IT services currently being provided by IT shared services agency CenITex.

Am I surprised that large Victorian Government agencies don’t have centralised mechanisms for effectively managing their telecommunications spend? Not at all. Nothing would surprise me when it comes to the Victorian Government’s management of technology projects and service delivery — unless, that is, an audit came out showing a department or agency was actually managing something well. That would actually surprise me greatly.


  1. This was a problem in 2000 – (the last time I worked in a Victoria Government body) – so I don’t know whether to not be surprised that it’s still happening, or be surprised it hasn’t been sorted out before now.

    There is a government-wide policy for using Telstra for telco spend, but not every business unit of every department and body follows the policy. There is a Telstra pricing book for services within Victorian government units, so it seems not everyone is following along.

    Police are a different beast, because so much of their comms spend will be RF radio equipment – (hand held radios, in-car radios, etc) – which they have managed by Motorola Solutions, and is outside of Telstra’s core competency.

    Bottom line is it is apparently still difficult to get “all of government” to follow “all of government” policies.

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