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

On behalf of the Joint Committee of Public Accounts and Audit, I present the committee's report entitled Report 423: Review of Auditor-General's Reports Nos 39 2009-2010 to 15 2010-2011.

The committee, 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 five performance audits selected for further scrutiny from the 26 audit reports presented to the parliament between May and November 2010. These reports cover a range of agencies and identify a number of areas for improvement in administration including the decision-making processes regarding infrastructure projects, the transparency and accessibility of regional grants administration, the failure to achieve value for money in government procurement, and poor governance arrange­ments for key stimulus climate change programs.

Firstly, the committee reviewed the conduct by Infrastructure Australia of the first national infrastructure audit and the development of the infrastructure priority list. We were particularly concerned about the lack of transparency regarding decisions made by Infrastructure Australia. The ANAO found that published methodologies were not followed in determining the priorities list and that Infrastructure Australia did not provide clear advice on the factors influencing key decisions. While we note that Infrastructure Australia is not formally obliged to document the reasons for the council's decision, in the interests of transparency we urge the agency to improve its processes in this area.

Secondly, we were also concerned at the lack of documentation when we examined the administration of the strategic projects component of the Regional and Local Community Infrastructure Program. In this instance, we would like to register our dissatisfaction with the Department of Regional Australia, Regional Development and Local Government for its failure to provide clear published assessment criteria for the program. This disregard for basic grants administration practice led to a series of problems and as a result the Minister for Regional Australia, Regional Development and Local Government did not receive clear recommendations regarding the eligibility or otherwise of applications from the depart­ment. However, we also note that, under the financial framework requirements, ministers are expected to obtain agency advice on the merits of each proposed grant before making decisions. This suggests that the minister should have taken the initiative to secure such advice. As a consequence of the lack of documentation in this case, there is no way for the parliament or the public to be sure that due process has been followed. While we accept the department's assurance that it has implemented relevant processes and practices to address the concerns of the ANAO, we expect to see the concrete evidence of improved performance in the future.

Thirdly, another long-term concern of this and previous committees is the lack of evidence that value for money is being achieved in Commonwealth procurement. Our review of direct source procurement only served to reinforce these concerns. Again, lack of documentation poses prob­lems by making it difficult to determine if value for money has been achieved. We found that there is a level of confusion over the Commonwealth procurement guidelines. We expect clearer, more concise guidelines as a result of the current review and a greater understanding and application of these guidelines as a consequence of these changes and of our review. We have made a number of recommendations aimed at assisting departments to streamline processes and encourage competency in this area.

Finally, we turned our attention to the green loans and home insulation programs. We recognise that both of these programs have been the subject of a number of reviews and consequently we saw our primary role as identifying the lessons learned from the implementation and delivery of both programs. We were particularly concerned by the inadequacy of governance arrange­ments and the quality of advice provided to ministers. We acknowledge the difficulties caused by tight implementation timeframes, but this does not excuse the lack of executive oversight or the underestimation of key program risks.

The issues identified in this selection of audits provide a number of areas for reflection for Australian Public Service agency executives and responsible ministers. Those areas include the need for higher quality advice by departments; increased documentation to provide transparency and accountability; better grants management; improved culture, capacity and supporting tools to ensure value for money in procurement; and adequate governance mechanisms for critical implementation programs. In the 43rd Parliament, it is important to emphasise the non-partisan con­clusions drawn from a committee involving ALP, Liberal and Independent members of parliament. I sincerely thank each committee member for the parliamentary spirit in which the work has been done. I also thank the Joint Committee of Public Accounts and Audit secretariat for their ongoing diligence and I note their attendance in the chamber—thank you. I commend the report to the House.

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

As Deputy Chair of the Joint Committee of Public Accounts and Audit, I rise to speak in support of the committee's report 423: Review of Auditor-General's reports Nos 39 (2009-10) to 15 (2010-11). The committee is responsible for reviewing all of the reports of the Auditor-General tabled in the parliament. The committee is responsible for reporting the results of the committee's deliberations to the parliament, and this responsibility is prescribed by the Public Accounts and Audit Committee Act 1951. Report 423 is the first report of the Joint Committee of Public Accounts and Audit of the 43rd Parliament.

In reviewing the Auditor-General's reports tabled between May and November 2010, the committee sought to examine five reports in detail. The audit reports reviewed by the Joint Committee of Public Accounts and Audit are Audit report No. 2 of 2010-11: Conduct by Infrastructure Australia of the first national infrastructure audit and development of the infrastructure priority list; Audit report No. 3 of 2010-11: The establishment, implementation and administration of the strategic projects component of the Regional and Local Community Infrastructure Program; Audit report No. 9 of 2010-11: Green Loans Program; Audit report No. 11 of 2010-11: Direct source procurement; and Audit report No. 12 of 2010-11: Home Insulation Program.

Report 423, before the House today, is the report detailing the findings of the committee's examination of those five performance audits that I have just referred to which were selected by the committee for further scrutiny. As already stated by the member for Lyne, the chair of the committee, these reports cover a range of agencies and identify a number of areas for improvement in administration, including the decision-making processes regarding infra­structure projects, the transparency and accessibility of regional grants admin­istration, the lack of evidence to determine whether value for money is being achieved in government procurement, and poor governance arrangements for key stimulus climate change.

The role of the committee in examining these reports is primarily to ascertain what action has been taken or is being taken by the relevant agencies to address the recom­mendations made by the Australian National Audit Office's reports. The committee heard evidence from the relevant agencies on each of these reports to ascertain whether action is progressing at an acceptable pace and also whether such action is sufficient to address the issues raised within the Auditor-General's reports.

Firstly, the committee reviewed the conduct by Infrastructure Australia of the first national infrastructure audit and the development of the infrastructure priority list. The ANAO report found that there was a lack of transparency in relation to the decisions made by this agency. The com­mittee notes that Infrastructure Australia is not obligated to document the reasons for the council's decisions. However, in the interests of transparency in this area, we believe it should be done. It is acknowledged that work is being undertaken by the agency to improve its processes and that the recommendations of the Auditor-General's report were agreed to by the agency. However, the committee, consistent with the ANAO recommendation, has recommended that, in future, Infrastructure Australia provide clear and consistent advice on the level of funding and necessary conditions it recommends for priority projects.

In relation to the establishment, impl­ementation and administration of the strategic projects component of the Regional and Local Community Infrastructure Prog­ram, it is acknowledged both in the ANAO report and in this committee's report that this program was developed in response to the global financial crisis and, as such, the stimulus had time-critical elements to it. Consequently, some of the errors and problems that we have identified and that were reported by the Auditor-General came about because of those time restrictions. Having said that, there was a lack of clear assessment criteria made available to the local governments, and this led to an oversubscription of the program. What is positive in relation to this program and the Department of Regional Australia, Regional Development and Local Government is that they have indicated that they are making improvements in this area. There have been assurances given and the committee has not made recommendations in relation to this area because of the assurances that were given to the ANAO.

In relation to the green loans and home insulation programs collectively, these programs have ceased but the department have given indications that they are implementing recommendations so that they will be able to deal with this better in the future. I believe more work needs to be done in the area of direct procurement. (Time expired)

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The time allotted for statements on this report has expired. Does the member for Lyne wish to move a motion in connection with the report to enable it to be debated on a later occasion?

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

I move:

That the House take note of the report.

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

In accordance with standing order 39, the debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.