and Wireless Limited's charges for workshop costs for 1975-76, during which I noted that non-productive hours, for which charges against the Government of approximately $380,000 had been raised, represented 23.8% of the total time available for work. Whilst accepting that in any workshop carrying out maintenance work a degree of unproductive time was inevitable, I suggested that it would be reasonable to expect a figure substantially less than that which had occurred. I have recently been informed by the company that as a result of better methods of monitoring performance in 1976-77, an improvement in productivity has been achieved and by the adjustment of the workload and minor redeployment of staff, the number of non-productive hours has been reduced by half.
39 One of the observations made during my review related to the V.H.F. station at the Peak, at which Cable and Wireless Limited maintains and operates both its own and Government equipment and where, because of the age and nature of the Government equipment compared with that of the company, an unduly high proportion of the costs incurred are allocated as a charge against the Government. Cable and Wireless Limited calculated that the replacement of the Government equipment at the station at a cost (at 1975 prices) of $1,230,000 would result in an annual reduction of over $190,000 in this charge, but this is most probably a very conservative estimate of the saving, because it does not take into account a number of additional economies which would also eventuate. Whilst the situation has been recognised for several years, little action to alleviate it has yet been taken by the Government.
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40 Head 50 Miscellaneous Services. Subhead 106. Data processing and Subhead 352. Commercial computer facilities. In addition to the deficiencies in the operational controls in respect of the computer at the Data Processing Division of the Government Secretariat, to which I refer in paragraphs 19 to 22 above, the financial control exercised by the Data Processing Manager was also found to be below standard. As long ago as July 1976, I invited attention to inadequacies in the purchase, hire and disposal of data processing equipment, my audit examination then indicating that the incompleteness of the accounting records had given rise to several overpayments, and at that time I also brought to notice that equipment, purchased on the Data Processing Division's recommendation that it had a useful life of seven years but which had been withdrawn from service after less than two-and-a-half years, had stood idle for over a year. Following these observations I was informed both that proper records to control the hire and location of equipment had been compiled and that the idle equipment would be offered for the use of another department or sold by tender, but a further inspection a year later showed that neither of these undertakings had been fulfilled: the unwanted equipment was still on hand, further overpayments appeared to have been made (although the records were still so lacking in essential detail that it was difficult to be precise as to the extent of the excesses) and other equipment on which rental charges were being paid was unused or had been used for purposes for which equipment at lower rentals would have been equally suitable, resulting in nugatory expenditure for its continued hire.
41 Although it has been the subject of audit comment for several years, there still seems to be little concept within the Data Processing Division of the fundamentals of vote control. For greater flexibility, funds have been provided by the Legislative Council under one-line votes, which makes the need for adequate control of individual project expenditure essential if the proper use of those funds is to be assured. Unfortunately the Data Processing Division's records were such as to preclude the sufficient classification of the amounts spent, with the result that expenditure may have been incurred in excess of project limits and for purposes other than those for which it was intended. The Data Processing Manager has agreed that the financial records were deficient in this respect and methods by which control might be improved are under consideration.
42 The conditions of contract for the hire of computer services were also considered to be open to the possibility of abuse. Despite the specialised nature of the services concerned, standard Government conditions for the supply of stores and services have been used, with very limited and imprecise special conditions which have left major aspects of the supply of the services open to dispute. This again was brought to notice some time ago, when I suggested that the conditions of contract should be redefined in consultation with the Legal Department and possibly the Central Computer Agency in the United Kingdom. The Data Processing Manager accepted that the contract conditions were in some respects imperfect and open to evasion, but maintained that this was unavoidable and that, given the nature of the contracts, they were now of a satisfactory standard. I have been unable to accept this contention and the matter is still under correspondence.
43 Quite apart from the terms of the contracts, the procedure itself for the procurement of computer consultancy services and the actual award of the contracts would also seem to merit review. When I initially invited attention to the absence of an approved list of consultants eligible to tender and to the practice of awarding contracts on the basis of a restricted or single tender, I was advised that a list would be maintained and would be kept up-to-date, but at a later inspection I noted that this list had not been fully utilised and that contracts had still been awarded after restricted or single tenders. Moreover I could trace no established procedure for assessing the performance of consultants when considering the award of contracts. One consultant, who had been described by the Data Processing Manager after the completion of a contract as having rendered incompetent and low quality service, was only shortly afterwards awarded four other contracts with a combined value of over $1 million. I have expressed my concern that in the recommendations to the authority responsible for approving the award of these contracts, the Data Processing Manager apparently failed to make known his previous assessment of this consultant. I have also suggested that in view of the frequent use of computer consultancy services, the desirability should be considered of forming a committee to examine the justification for the hire of such services and to approve the selection of computer consultants. I understand that this suggestion is now being considered.
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