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 430: Review of Auditor-General's reports Nos. 47 (2010 11) to 9 (2011-12) and reports Nos. 10 to 23 (2011-12), and an executive minute received by the committee, which constitutes the government response to JCPAA Report 418—Review of Auditor-General’s reports Nos 04 to 38 2009-10, recommendations 2 and 3.

Ordered that the report be made a parliamentary paper.

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 three performance audits selected for further scrutiny from the 34 audit reports presented to parliament by the Auditor-General between June 2011 and February 2012.

The committee's focus in examining these audit reports was on transparency and accountability—particularly in terms of decision-making and performance measurement. Following the committee's policy inquiry into national funding agreements and our ongoing interest in performance measurement, we continue to examine the findings of the ANAO's multi-agency review of key performance indicators. The outcomes and programs framework is in its third year yet the audit showed that agencies continued to find it challenging to develop meaningful and measurable KPIs.

After hearing evidence from the ANAO and the Department of Finance and Deregulation, we concluded that Finance needs to do more to engage and support agencies, improve guidance and include best practice models for developing KPIs. Work also needs to be done to improve the integration of KPIs in key accountability documents to ensure a clear read.

Another area of ongoing concern is grant administration. With the release of a damning audit report on the $150 million Infrastructure Employment Projects stream of the Jobs Fund, we felt it was necessary to further examine the findings. This stream did not achieve the anticipated economic stimulus objectives within the designated timeframe. There were questions over the project selection process and a range of administrative deficiencies were identified, including departure from the Commonwealth grant guidelines.

In its appearance before the committee, the Department of Infrastructure and Transport provided some indication that it was now working to implement sounder governance structures. However, the lack of acknowledgement of the problems found in this audit and the provision of incomplete responses to questions on notice provided little reassurance that adequate steps have been taken to ensure that identified problems would not be repeated in future programs. As such, we have recommended that the ANAO include the department in an audit that is currently underway into agencies' implementation of audit recommendations. The committee will continue to watch closely for evidence of improvement from this particular department.

The IEP audit report raised questions more broadly regarding the Commonwealth grant guidelines, so the committee has decided to examine a subsequent ANAO report on the administration of grant reporting obligations. The billions of dollars provided each year through grants require full transparency and accountability. The Commonwealth grant guidelines must be clear and there must be support for agencies to implement the guidelines and other requirements. In turn, ministers should have sufficient support from their agencies to ensure decisions can stand up to full public scrutiny. Yet the ANAO found that agencies did not seem clear on the requirements and did not take advantage of best practice models and this seems to be repeating itself over time. Competitive grant selection processes are being significantly underutilised, and ministers are receiving inadequate departmental support.

The committee acknowledges the work of the Department of Finance and Deregulation in developing the guidelines, providing updates and, most recently, in the release of model chief executive instructions. Nevertheless, we continue to see noncompliance and confusion.

Following the committee's release of ANAO's supporting documentation relating to ministerial under-reporting of grant approvals, there were a number of exchanges between the ministers named and the Auditor-General. These statements and letters disputed the categorisation of grants that should have been reported to the finance minister. The committee has since agreed to the public release of these letters on the JCPAA website in the interests of transparency and accountability.

Clearly, there are still practical problems with the system. Not only do the guidelines need to be clarified, but agencies need sufficient support to follow them. The finance department was provided ongoing funding to support agencies through the grants framework unit, but chose to redirect the funding to areas reviewing the broader financial framework. While we accept that grants are a subset of the framework, Finance missed the opportunity to maximise momentum following the introduction of the Commonwealth grant guidelines.

I have more to say but in closing I would like to sincerely thank each committee member for the non-partisan spirit of the work done and once again thank the committee secretariat for their work. (Time expired)

In accordance with standing order 39(f), the report was made a parliamentary paper.

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

Mr Deputy Speaker, I rise to speak briefly in support of the Joint Committee of Public Accounts and Audit Report No. 430: Review of Auditor-General's reports Nos 47 (2010-11) to 9 (2011-12) and reports Nos 10 to 23 (2011-12).I do so as the Deputy Chair of the Joint Committee of Public Accounts and Audit.

The chair has already outlined the role of the committee in reviewing the audit reports each year. The committee continues to take a pro-active role in pursuing opportunities for improvements in transparency and accountability, particularly in terms of decision making and performance measurement. The three reports were viewed by the committee in Audit report No. 430, Audit report No. 5 2011-12: Development and implementation of key performance indicators to support the outcomes and programs framework, Audit report No. 7 2011-12: Establishment, implementation and administration of the infrastructure employment project stream of the Jobs Fund, and Audit report No. 21 2011-12: Administration of grant reporting obligations.

With these reports and many like them across other agencies the committee has identified, during this term of parliament, that there needs to be ongoing improvement in the way in which Commonwealth guidelines are adhered to by agencies. Whether it is the grant guidelines or procurement guidelines, there are deficiencies in the way that those guidelines are being followed and adhered to by agencies and in the support that they are getting in clarifying and implementing those guidelines. The committee believes that there is a strong role to be played by the Department of Finance and Deregulation in providing guidance and clarity around agencies' responsibilities; however, it is fair to say that agencies themselves need to be taking more responsibility in the way they administer their obligations. The committee acknowledges the work of the finance department in developing the guidelines, providing updates and, most recently, the release of model chief executive instructions. I take note of the evidence that we have received from the finance department that, although they provide all of that guidance and assistance and there can be improvements in what they are providing, the fact is the agencies do stand alone. It is, at the end of the day, their obligation to ensure that those guidelines are being followed appropriately. This report makes recommendations to assist in continuous improvement in the areas of transparency and accountability, and the committee will continue to monitor the progress in these areas.

I wish to briefly go specifically to Audit report No. 21 2011-12 as it has attracted some media around it. The chair has already outlined that there was correspondence between the relevant ministers and the Australian National Audit Office in relation to the issue of declarations by the ministers of any grants within their electorates. This correspondence will form part of the public record for all to view. I think it is fair to say that, because of some of the media reports that have gone on around this issue, the evidence before the committee states that there is no deliberate act by the ministers in not declaring those grants within their electorates. The deficiencies do lie within the agencies and the briefings provided to those ministers, and it is expected that agencies' briefings to ministers in the future will clearly outline where a grant actually falls within a minister's electorate and advise of the need to provide notification of such grant to the finance department. So the Australian National Audit Office report and this report of the committee clearly outline that there are failings in the way agencies brief ministers, and that certainly needs to be improved on. But I do acknowledge that it was this government that brought that process into place in the first place. It is a process worth pursuing and improving on.

In closing, I would like to sincerely thank the chair and each of the committee members for their ongoing support and willingness to work together in a non-partisan manner to deliver these reports. I am also thankful for the ongoing support of the secretariat in the committee's ongoing work.

Geoff Lyons (Bass, Australian Labor Party) Share this | Link to this | Hansard source

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

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

I move:

That the House take note of the report.

Geoff Lyons (Bass, Australian Labor Party) Share this | Link to this | Hansard source

In accordance with standing order 39(d), the debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting. Does the honourable member for Lyne wish to move a motion to refer the matter to the Federation Chamber?