Robert Oakeshott (Lyne, Independent) Share this | Hansard source

On behalf of the Joint Committee of Public Accounts and Audit, I present the following reports: Report 418: Review of Auditor-General’s reports Nos 4 to 38 (2009-10); Report 419: Inquiry into the Auditor-General Act 1997; and Report 420: Annual report 2009-10, with executive minutes received by the committee.

Ordered that the reports be made parliamentary papers.

by leave—These reports are tabled on behalf of the committee of the previous parliament, which undertook all of the work for the inquiries, including the conduct of the public hearings and the preparation of the reports.

With regard to report 418, the Joint Committee of Public Accounts and Audit, as prescribed by its act, examines all reports of the Auditor-General and reports the results of the committee’s deliberations to the parliament. This report details the findings of the committee’s examination of nine performance audits tabled in 2009 and 2010. As usual, these reports cover a range of agencies and highlight a number of areas of concern, in particular grants administration, the implementation of new technology, risk management and data integrity.

The committee reviewed the administration of grants by the National Health and Medical Research Council. The committee acknowledged the benefits to Australian health flowing from research supported by the NHMRC grants system. The committee also noted the upheaval caused by the NHMRC’s recent separation from the Department of Health and Ageing and its move to a statutory agency. The committee recognised that the NHMRC is still consolidating its new status but was pleased to see evidence of a tightening in administrative practices, processes and procedures.

The committee examined the implementation of the Change Program by the Australian Taxation Office. While the committee noted the significant productivity gains within the tax office, it expressed concern about the extent of ongoing client dissatisfaction with the system and the undermining of confidence in the integrity of Australia’s taxation system. The incoming committee will continue to monitor this situation at the next biannual hearing with the Commissioner of Taxation and potentially do more on the back of that.

The committee also expressed concern over the long-term issue of staff churn at AusAID, particularly in light of the growing demands placed on the agency by Australia’s expanding aid program. The committee acknowledged that AusAID is taking positive steps to combat this issue and recommended that AusAID report back to the committee on its efforts to alleviate the problem.

The committee reviewed audit reports on a number of controversial topics including the National Broadband Network request for proposal process, the coordination and reporting of Australia’s climate change measures and the Building the Education Revolution program. The committee identified issues with risk management, data integrity and reporting processes and the effect these issues have had on implementation and delivery. Overall, the committee made four recommendations which, if implemented, will ensure ongoing improvement in public administration of government funds.

Turning to report 419, this report examines the Auditor-General Act 1997, which sets out the functions and powers of the Commonwealth Auditor-General. The committee conducted this inquiry to assess whether the powers of the Auditor-General and the Australian National Audit Office remain adequate in the modern public sector environment. It has been nine years since the last such review by the committee.

The committee acknowledged the gap in accountability of Commonwealth grants to states and territories. In his evidence to the committee the Auditor-General indicated the difficulties his office experiences in ‘following the dollar’ with regard to Commonwealth funding for programs and projects administered by the states and territories. He told the committee that this has been demonstrated with regard to a number of recent programs including the BER. More recently, this could prove relevant to the implementation of flood reconstruction programs in Queensland. To improve accountability and transparency, therefore, the committee strongly supports changes to the act to enable the Auditor-General to access information and records relating to the use of Commonwealth funds and to audit that information under certain circumstances.

The committee also recognises the increasing use of contractors to implement government programs and services. While acknowledging the benefits of this practice, the committee is concerned about the potential undermining of ministerial responsibility and parliamentary oversight. The committee wants to see more accountability in this area and accordingly wants the Auditor-General to have the power to audit contractors delivering government programs and services.

The committee considers that the Auditor-General should have the statutory authority to address these issues. Accordingly, the committee has made 13 recommendations which, if enacted, will enhance the power of the Auditor-General, including:

• giving the Auditor-General greater authority to ‘follow the dollar’ where non-government bodies, including contractors and agencies in other levels of government, are in receipt of Commonwealth funding;
• removing outdated restrictions on the Auditor-General’s capacity to initiate audits of Commonwealth-controlled government business enterprises;
• ensuring that the Auditor-General’s full information-gathering powers for traditional performance audits also apply to ‘assurance’ reviews the parliament might wish him or her to carry out; and
• enhancing the Auditor-General’s role in reviewing the adequacy of agencies’ performance information.

The changes proposed by the committee will help ensure that Commonwealth funding is fully accounted for and that, in the end, the taxpayer is receiving full value for money in all programs delivered by the Commonwealth or by related agencies.

I would like to take this opportunity to thank the previous committee, chaired by Sharon Grierson MP, for its work on these inquiries. The incoming committee recognises the important role of the Auditor-General and his office in holding the executive and its agencies to account and looks forward to continuing to work with the Auditor-General to strengthen accountability and transparency and public administration across the Australian government.

I commend the report to the House.

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