Andrew Southcott (Boothby, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Joint Committee of Public Accounts and Audit, I present the following reports: Report 444: Annual report 2013-14; and Report 445: Regional Cities Program, KPIs and Medicare—Review of Auditor-General’s reports Nos 10 to 31 (2013-14) and I ask the leave of the House to make a short statement in connection with the reports.

Leave granted.

The report I have just presented from the Joint Committee of Public Accounts and Audit entitled Report 444: Annual report 2013-14 details the activities of the committee as well as the discharge of its duties. These include:

The report also details the committee's continuing oversight of the Public Management Reform Agenda. The committee tabled a report in June 2014 into the development of the first batch of rules for the Public Governance, Performance And Accountability Act 2013.

Mr Deputy Speaker, I commend the report to the House.

Report made a parliamentary paper in accordance with standing order 39(e).

The report I have just presented from the Joint Committee of Public Accounts and Audit entitledReport 445: Regional Cities Program, KPIs and Medicare—Review of Auditor-General’s reports Nos 10 to 31 (2013-14) details the findings of the committee's examination of the following four Australian National Audit Office Reports:

A key theme across all four reports was the importance of a robust performance framework. The committee is a determined advocate of accurate and effective performance measurement and reporting. As previous committee reports have emphasised, accurate and effective performance measurement and reporting enables the public, the parliament and other stakeholders to assess whether resources are being used efficiently and whether programs and services are achieving their intended results.

Chapter 2 of the report discusses the committee's findings concerning report No. 21 on KPIs. The committee found that Commonwealth agencies have experienced difficulty in developing KPIs that measure the effectiveness of a program's contribution to achieving outcomes. The committee recommended that Finance ensure that performance management and reporting is recognised as a central component of agency governance arrangements and that guidance is clear, consistent and supports agencies in the development of effective KPIs. This will be a particularly important aspect of the new performance framework to be introduced as part of the public management reform agenda and Public Governance, Performance and Accountability Act 2013. The committee commended the audit office on its development of a preliminary methodology to support ongoing audits of KPIs and further recommended that it continue to implement systematic audits of the appropriateness of KPIs and the completeness and accuracy of agency reporting. This has been a longstanding interest of the committee and the committee will continue to monitor the implementation of better KPIs.

Chapter 3 of the report discusses the committee's findings concerning report No. 25 on the Building Better Regional Cities Program. The committee was disappointed in the overall administration of this program. The committee found that the program was implemented in a way that gave insufficient attention to the program's objective and KPIs. The program cost more than had been budgeted; it promised to deliver up to 8,000 homes but actually delivered 247. It delivered significantly less in the way of additional affordable housing than the program target, and many of the contract projects were delayed in delivery. There were also some serious issues relating to the administration of this program.

Given the seriousness of the issues raised in the review, the committee has recommended that every six months for the life of the 44th Parliament the Department of Social Services continue to inform the committee about the status of housing built with the assistance of the program. The committee believes there is much to be learnt from this matter. Accordingly, it is further recommended that both the Department of Social Services and the Department of the Environment conduct a full and frank review of the Building Better Regional Cities Program to increase the effectiveness of future program administration.

Chapter 4 of the report discusses the committee's findings regarding report No. 26 on Medicare compliance audits, including the Increased Medicare Compliance Audits initiative. The committee found that the management of this initiative by the Department of Human Services ultimately represented a net cost to government rather than delivering the anticipated savings. The department did not meet its overall targets against two key performance indicators for this initiative, nor did it develop and implement a methodology to accurately measure, monitor and report on savings achieved against targets. The committee recommended that the Department of Human Services develop a methodology to better monitor performance outcomes and report on the effectiveness of Medicare compliance audits, with the department to report back to the committee on this matter in six months. The committee also recommended that the department undertake a cost-benefit analysis of its Medicare compliance activities to ensure more effective targeting of compliance risks to the Medicare program and increase the cost-effectiveness of its compliance approach.

Chapter 5 of the report discusses the committee's findings concerning report No. 27 on the integrity of Medicare customer data. Over the course of the review, the committee was encouraged to note that the Department of Human Services is working to resolve intertwined and duplicate records in the Medicare database which pose potential clinical safety and privacy risks. However, the committee noted that the department could not demonstrate implementation of previous recommendations made in this area by the Audit Office in 2004-05. It is disappointing that the department missed an opportunity to enhance its performance by implementing these recommendations.

The committee recommended that the Department of Human Services undertake targeted data integrity testing of Medicare customer records, better manage duplicate and intertwined records and implement controls to ensure that only those customers eligible to receive Medicare benefits can access them. Given the length of time these data integrity issues have been evident, the department has been asked to report back to the committee on this matter in six months.

In conclusion, I thank committee members for their deliberation on these significant matters. I also thank departmental representatives who appeared at public hearings for assisting the committee in its important role of holding Commonwealth agencies to account for the efficiency and effectiveness with which they use public monies. I commend the report to the House.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

by leave—I am proud of the Building Better Regional Cities Program. It is one of three signature programs of the last Labor government to promote affordable housing. The program involved awarding funding through a competitive applications process for local infrastructure projects that would support new housing developments. It is important to keep in mind that this program was supporting infrastructure to provide the catalyst for affordable housing rather than to build the houses themselves.

There were three criticisms in the ANAO report that I want to speak to briefly. One was the decision to restrict councils to one successful application. This decision came about after funding of the program was halved to $100 million in order to assist with flood reconstruction. I think it was quite reasonable after this event to restrict successful applications to one per council. The second criticism was around the subsequent socioeconomic prioritisation within the merit assessment. Restricting applications for those councils that had a SEIFA index score of below 1,000 was important to maximise the equity aspects of this program. The prioritisation of applications with socioeconomic disadvantage factors was also a sound decision. With a limited amount of funding, it was important to target the program to areas where resources were most constrained and affordable housing would have the greatest impact. As long as applications are sound, what is wrong with preferring projects from low socioeconomic areas?

The third criticism was around evaluation of value for money. The minister exercised discretion on five applications not originally recommended by the department, and I contend that that was reasonable. The department provided recommendations to the minister in a covering minute. The covering minute for grouping 3, which I am referring to, noted:

You only consider applications from the third group with a requirement to improve the value for money to be delivered during the negotiation of the funding agreement.

Regarding claims that these five applications also did not meet at least one other criterion, it is important to place this in context. Of the 15 applications recommended by the department, 11 had been assessed as not adequately meeting one of the five merit criteria; seven had been assessed as not meeting two of the merit criteria; and three had been assessed as not meeting three of the five criteria. So, besides the value for money aspect, which I will return to briefly, these five projects were similar to nearly three-quarters of recommended projects in not meeting one of the five merit criteria. The minister approved these five applications on the basis that the department was to improve the value for money to be delivered during negotiations of the funding agreement.

Mr Innis from the DSS stated: 'It is fair to say that the minister had the discretion to approve whatever project he felt was worthy, provided he explained his rationale. This bit is certainly true, and he asked for the Department in negotiation to seek to increase the value for money proposition.' The ANAO stated that the value for money for four of the five projects in this category was improved. The ANAO also stated that the department did not update the minister as to the state of negotiations around value-for-money outcomes. So we had a situation where most of the five applications rated highly in other parts of the merit assessment but fell down on value for money. The department told the minister, 'You can consider these five if we go away and improve the value for money.' The minister requested the department to do that and they subsequently improved the value for money for four of the five projects.

Ultimately, this program provided critical infrastructure that I am confident, over the course of time, will provide the catalyst for significant affordable housing. Targets in the short term were never going to be met, because it is dependent on the development consent of councils and various state government actions. In my own area of Lake Macquarie I have the town of Wyee, which is a Depression-era settlement, that is benefiting from this program. This is a town only 90 minutes drive from Sydney, yet it still does not have sewerage connected. I am confident that this program will provide the critical catalyst, with investment from Hunter Water, to provide this sewerage, which is long overdue in an important part of my region. I commend the rest of the report to the parliament and thank the secretariat for their very hard work on this and all other projects.

Andrew Southcott (Boothby, Liberal Party) Share this | Link to this | Hansard source

I move:

That the House take note of report 445.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

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