Auditor-General's inquiry into Alpine Energy Limited
Auditor-General's inquiry into Alpine Energy Limited’s decision to install solar equipment at a senior executive’s house
The Auditor-General’s report Inquiry into Alpine Energy Limited’s decision to install solar equipment at a senior executive’s house was published on our website today.
Sensitive expenditure is a particular risk in the public sector – if it is not recognised and properly managed, public trust and confidence can quickly be eroded, regardless of the amount of money spent.
Concerns were raised with us about certain procurement practices carried out by Alpine Energy, including a decision to install solar energy equipment on an employee’s house as part of a solar energy trial. When the employee left the company, Alpine Energy sold the solar equipment to the employee for much less than it cost to install. We were interested in this decision because it raised questions about sensitive expenditure, in particular whether Alpine Energy properly managed the risks around that.
Our inquiry found that some of the questions we had about the expenditure could be answered easily. For example, we saw no evidence that the solar equipment was installed on the employee’s house as part of a recruitment or employment package. We also found that the installation had a legitimate business purpose, although the solar energy trial was largely unsuccessful and no useful data was collected.
Although some of our concerns were resolved, others remained. We found that Alpine Energy did not manage this expenditure as well as it could have, and it did not always follow principles of good practice expected of public organisations. For example, Alpine Energy was not able to explain how it calculated the final price for selling the equipment to the employee. This case serves as a useful reminder to all public organisations, regardless of their activities, size, or location, that the appropriate treatment of sensitive expenditure is an important area and one in which vigilance is required to manage perceived and substantive benefits.