Management of Prison Accommodation Using Public Private Partnerships
Overview
The audit found that the Department of Justice (DOJ) faces significant challenges in managing its long-term public private partnership (PPP) prison contracts. Since the commencement of this audit, DOJ started implementing improvements and rectifying known deficiencies with its contract management and administration.
DOJ has not been able to demonstrate that it is continuing to receive
value-for-money in terms of the standard of prison accommodation services it is paying for. Nor is it able to demonstrate that it has taken adequate steps to assure that the prison accommodation assets will be in an appropriate condition when ownership of the Port Phillip Prison and Fulham Correctional Centre assets reverts to the state.
All PPP contracts examined have weaknesses, particularly those developed pre-2001. They do not adequately define accommodation service standards, making it difficult for DOJ to effectively monitor contractor performance. For the post-2001 contracts, DOJ has not fully exercised its rights to monitor contractor performance and to manage service failures. There is insufficient documentation either to explain the rationale for DOJ’s approach, or the decisions made by contract administrators.
DOJ’s administration of the PPP contracts can also be improved. It needs to demonstrate appropriate management of the risks allocated to the state to avoid deterioration in the value-for-money premise on which the contracts were based.