The Australian National Audit Office (ANAO) this week released its audit on the government's third sale of Telstra shares, T3, concluding that the sale represented effective and efficient use of public money despite lavish hotel bills for a roadshow promoting the sale, inflated legal and communications adviser costs and selling commissions of over $204 million.
The Auditor General found that the sale achieved a fully priced offer of $3.70 per share, and that the transaction was completed in accordance with the timetable and within budget by the then Department of Finance and Administration (Finance).
Selling commissions, corporate and financial adviser costs comprised the majority of the beneficiaries of the $204 million in sale costs from the $15.4 billion T3 sale.
The firm appointed as Finance's domestic legal adviser, Freehills, had worked on both of the previous Telstra share offers and on the sale of Sydney's Kingsford Smith airport.
Despite charging $4.2 million or "significantly higher" costs than three other firms that tendered proposals for the role, the Tender Evaluation Committee opted for Freehills as it considered the firm's previous experience as demonstrated ability to deliver and therefore good value for money.
The total cost to Finance of legal advice associated with the Telstra 3 sale was $12.74 million.
The firm Gavin Anderson was chosen as communications consultant for the T3 sale, having previously served in that role during the Telstra 2 and Kingsford Smith sales.
Again, despite being more than double the cost of the second shortlisted tenderer, the firm's previous experience and demonstrated ability led to it being awarded the tender worth $2.95 million, despite inflated costs to taxpayers.
The ANAO did make one recommendation to improve accountability for expenditures on marketing roadshows - global tours for Telstra bigwigs and other advisers promoting the sale of shares - in future public share offers.
The Secretariat responsible for administering the global roadshow co-ordinator contract did not hold a complete set of invoices relating to underlying expenditure on the roadshow, and there were shortcomings in the certification of specific amounts to be paid. ANAO had to take Finance's word that "no significant exceptions" in terms of expenses were identified.
For example, taxpayers footed hotel bills for trips such as those to New York and London where the average accommodation cost was in excess of $1,300 per person per night.
Senior Telstra management wished to stay in preferred hotels outside the Commonwealth public servants objectives of value for money, meaning that for logistics purposes the rest of the traveling roadshow team including representatives from investment banks and the department of Finance were also permitted to stay at the expensive hotels at taxpayer's expense.
Finance said Telstra executives might not have co-operated if they could not stay in hotels of their choosing. The total cost of the roadshow touting Telstra shares was $1.7 million.
The Department of Finance and administration acknowledged the ANAO's recognition that overall planning and management of the sale was effective, and agreed with recommendations that a threshold be set, above which project managers are required to obtain receipts of roadshow expenditure prior to certifying that expenditure.