Victoria's prison system:
Community protection and prisoner welfare

This Special Report is my 51st and final performance audit report since assuming office on 30 August 1988. I will be retiring on 30 July 1999 and it has been a privilege to serve Parliament and the community over the last 10 years. The Report documents the results of a wide-ranging but difficult audit dealing with the State's prison system. The audit encompassed a period of major reform within the system following the Government's action in 1994 to provide for participation by the private sector in the construction, operation and management of 3 new prisons. Readers of the Report will see that it identifies several important areas which require prompt attention by the Department of Justice. These areas include: an upgrading of the status of the industry's monitoring body, the Office of the Correctional Services Commissioner; raising the levels of service outcomes expected of operators to facilitate implementation of leading edge prison practices; introduction of a more effective approach to highly important prisoner management functions in order to better meet the rehabilitation needs of prisoners and enhance the likelihood of their reparation to the community; and provision of greater disclosure each year to the Parliament and community of information relating to the Department's management and supervision of the prison system. It is also important that the introduction of a competitive environment within the prison system proceeds without too much delay so that there is a level playing field for both public and private operators. Apart from other benefits, this action would ensure that a single framework covering such matters as performance incentives and penalties is in place for the 2 categories of operators and would enable meaningful comparisons to be made of financial and qualitative performance across the entire system. I have indicated in the Report that the momentum within the Department under the current Secretary is positive and that the Department is well placed to implement strategic change in this major area of government responsibility. At a very late stage in the development of this Report, I was presented with a copy of legal advice obtained by the Department from the Victorian Government Solicitor. This advice indicated that the secrecy provisions of section 30 of the Corrections Act 1986 rendered any financial information relating to the Government's contracts with the private prison operators as subject to commercial confidentiality. The legal advice also mentioned that section 12 of the Audit Act, which enables my total access to information deemed to be commercial-in-confidence, does not authorise me to specifically disclose in a Report to the Parliament any financial data dealing with the private operators. The section does permit me to communicate conclusions, observations or recommendations to Parliament based on the confidential data but it seems I am only authorised to make general references to such data by way of percentages or use of aggregates etc. It had been my intention up until the time of receipt of the legal advice to include within this Report financial details relating to: cost benchmarks established by the Government for assessing bids submitted by prospective tenderers during the bidding and selection process for each private prison as well as the actual cost bid submitted by each successful tenderer; payments made to the private operators for the periodic delivery of prison services; and amounts deducted to date from payments to operators for poor performance or non-achievement of outcomes specified in contractual conditions. My view was that Parliament and taxpayers had a clear right to be informed of such fundamental information. In this respect, I am comforted by the words of Justice Murray Kellam of the Victorian Civil and Administrative Tribunal who, in a very recent decision on prison contracts, stated: "It is inherent in the democratic system that important issues of the nature of prisons and their management be publicly transparent so that there can be the best possible public understanding, awareness and if need be, debate". Nevertheless, because of the Department's legal advice, I could have been accused of acting ultra vires in terms of the audit legislation if specific disclosure was made. Accordingly, I determined to delete the relevant financial data from the Report. In some cases, I have been able to incorporate general references but, for tabular information, the relevant tables have been left blank. No objection to the specific disclosure of financial details has been made to me by the operators of the State's 3 private prisons. In November 1998, I suggested to the Government that section 12 be strengthened to remove any doubts on the ability of an Auditor-General to fully inform the Parliament, where deemed justified in the public interest, on matters involving commercial confidentiality. The Government subsequently determined to defer consideration of this particular issue and other suggested changes to the audit legislation until later in 1999. In view of the experiences of this case, I feel it is imperative that the need for legislative change be accorded high priority. The alternative is that the Parliament and community are automatically denied the right to be fully informed by an Auditor-General on matters inherently linked to the expenditure of taxpayers' funds. C.A. BARAGWANATH Auditor-General