No Audit Requirement For Serco


Under the contract signed between Serco and the Department of Immigration (DIAC), which New Matilda has obtained under FoI, Serco is under no obligation to comply with any form of independent audit.

The financial management section of the contract does give DIAC wide ranging abilities to conduct audits of Serco’s management of detention centres but these can be conducted "by a department or its nominee" and there is no periodic requirement for this to occur.

Serco is required to be part of a "Joint Executive Report" compiled with DIAC regional management on a monthly basis that examines its management and performance. But the contract doesn’t specify how this reporting is conducted and in what capacity DIAC is involved.

Serco is required to submit monthly reports on security exercises, OH&S, emergency breakdown and repairs, illegal items, industry development, damage by people in detention and care-taker services.

Serco is also required to submit an annual report for each facility to DIAC. But the content requirements for this report are not onerous:

"Annual Report
(a) The Service Provider must submit an Annual Report for each Facility that:
(i) summarises key events during the year;
(ii) sets out the lessons learned; and
(iii) establishes targeted goals for the subsequent year."

A recent investigation by Corpwatch reported that even though Serco receives hundreds of millions of dollars in contracts from governments around the world, it has a poor track record as far as financial accountability is concerned.

NM asked DIAC why Serco is not required to comply with an independent audit in the terms of the contract, whether any audits had occurred and if so whether they were conducted by an independent organisation.

A spokesperson for the department told New Matilda, "Under the contract the department can periodically conduct audits of the detention service provider’s compliance with its performance obligations".

"At the department’s option, the audit can be undertaken by a review team comprising of the following: departmental representatives, departmental facilities personnel, departmental regional or state office personnel, and/or an independent third party.

"We ensure that Serco’s performance is rigorously monitored. We undertake an ongoing internal audit program to ensure that Serco meets its contractual obligations," the spokesperson said.

Serco is also required to compile "Incident Reports" to be filed with DIAC when certain events occur. The contract details three major categories of incidents: critical, major and minor. Critical incidents include death, bomb threats and suicide — but they also include "unauthorised media access" and "high profile visitor refused access".

Curiously, this was reported several months ago as having been a later amendment to the contract but the document reveals that in fact these categories were always listed in this way and were agreed on by DIAC. These incidents need to be reported verbally within 30 minutes and in writing within four hours to DIAC.

Worryingly, some of the incidents considered "minor" include serious events that could be life-threatening. Clinical depression, substance abuse, voluntary starvation for less than 24 hours and the birth of children are only considered to be minor and only need to have a written report after 24 hours. All critical and major incidents are required to be audited but only 10 per cent of minor incidents need to be audited per month. These audits are internally conducted, and are not required to be independent.

Given there’s no independent oversight, this system relies on Serco fulfilling its reporting obligations. This, in turn, opens the possibility of incident reports simply not being filed.

During the Christmas Island leg of the recent Senate inquiry into Australia’s immigration detention network, Kaye Bernard, the General Secretary of the Union of Christmas Island Workers, told the committee hearing about an incident in which a Serco worker was stabbed — and no incident report ever reached DIAC:

Ms Bernard: The incident report was filed by the officer and when he went to get a copy of it, it had been put in bin 13. Bin 13 is commonly referred to by the detention workers as ‘the shredder’.

Mr Scott Morrison: Tell me a bit more about bin 13 then.

Ms Bernard: Bin 13 is when you have a completely overworked and understaffed facility, because of this client-detainee ratio. You have a huge reporting requirement and paperwork stacked up in boxes under the manager’s desk. It was put through a shredder.

Mr Morrison: So you are telling me that, even though an incident report was filed, to your knowledge, those incident reports are actually not reflected in the number of incident reports that may have been reported by DIAC or Serco?

Ms Bernard: Correct.

Mr Morrison: How many incidents are we talking about here? Given that there are thousands of incidents, albeit ones have been reported already, which is alarming enough, how many incidents do you think are not being reported?

Ms Bernard: If you take one incident — a riot with 200 people, one officer getting stabbed and others being injured, which was described in the media by DIAC as a tiff with unaccompanied minors — I do not know how many reports you could write up about that.

DIAC relies on incident reporting by Serco for real-time updates of what is happening in detention centres. In the absence of other real-time measures to log events, it is worrying if, as the above exchange suggests, the "Incident Management Log" is not an accurate reflection of what is happening inside detention centres.

We have spoken to a number of former Serco staff, who worked in many detention centres. They confirm that many incidents are not accurately reported — if at all — to avoid conflicts with management anger over potential financial sanctions from the federal government.

The Labor government pledged upon winning government in 2007 to implement humane and transparent policies towards asylum seekers. The lack of formal independent audit requirements make it impossible to know exactly what is happening inside immigration detention centres and to achieve the promised transparency.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.