Lucy Wicks (Robertson, 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 483, Inquiry into the 2018-19 Defence Major projects report and the Future Submarine projecttransition to design: (Auditor-General's reports 19 and 22 (2019-20)), incorporating additional comments, and Report 484, The administration of government grants: inquiry into Auditor-General's reports 5, 12 and 23 (2019-20), incorporating additional comments.

Reports made parliamentary papers in accordance with standing order 39(e).

by leave—Report 483 details the committee's findings from the inquiry into the following Auditor-General's reports: Report No. 19, 2018-19 Major projects report, and Report No. 22, Future Submarine project—transition to design. It discusses the committee's findings on the Major projects report, known as the MPR. The MPR is prepared annually by the Australian National Audit Office and the Department of Defence to provide a review of selected Defence major acquisition projects. In the 2018-19MPR, the status of 26 major projects was examined in relation to cost, schedule and forecast capability, alongside a review of the risks, challenges and complexities associated with major projects in general. The total approved 2018-19 budget for the major projects included in the report was approximately $64.1 billion, covering 49 per cent of $132 billion allocated to Defence's total active capital equipment projects.

Reviewing the MPR each year has been a longstanding practice of the Joint Committee of Public Accounts and Audit and goes to the core of its oversight role of public governance, performance and accountability. In this report, the committee has made six recommendations. In the interests of time, I'll broadly outline some of the key themes. The first includes recommendations directed to improve the clarity, readability and accessibility of the MPR. This is to enable greater understanding by the parliament and the public. This theme is continued in recommendation 3, which outlines that the ANAO, in conjunction with the Department of Defence, should consider ways to make the report more understandable to those who may not have technical knowledge of Defence terminology. The recommendation suggests that changes be made to the definitions section in the MPR, with descriptions of terms such as 'constant costs', 'out-turned costs' and 'risks' and suggests that a description of 'total schedule slippage' be provided, to provide clarity as to the concurrent nature of Defence acquisition and the meaning of this term. Further, recommendation 6 suggests that Defence and the ANAO use clear and accessible language in future Major projects reports when reporting on and describing cost, scope and capability variations.

The second broad area addressed in the recommendations goes to issues identified in relation to key projects examined in the MPR, including the MRH-90 helicopters project. The committee recommends that Defence commission a performance review or independent external audit of the entire helicopter acquisition program in advance of upcoming helicopter acquisitions by Navy and Army. Chapter 3 of the committee's report examines Defence's administration of the Future Submarine program, a significant Defence acquisition program. Noting that the Future Submarine project will be included in subsequent MPRs, the committee has recommended that Defence clarify the required thresholds that categorise Defence major projects listed as projects of concern.

The report is a consensus report of the committee, with additional comments by Senator Patrick.

I also wish to make a few comments in relation to Report 484, The administration of government grants. The report details the committee's findings from the inquiry into the following Auditor-General's reports of 2019-20: Report No. 5, Australian Research Council's administration of the National Competitive Grants Program; Report No. 12, Award of funding under the Regional Jobs and Investment Packages; and Report No. 23, Award of funding under the Community Sport Infrastructure Program.

The purpose of this inquiry was to examine the administration of government grants covering a range of program areas, including academic grants, regional and rural infrastructure projects and community sports. The committee's report focused on aspects of grants administration such as corporate governance, program delivery and adherence to Commonwealth rules and guidelines. In examining these matters, the committee made six recommendations that largely address broad themes and issues identified across the Regional Jobs and Investment Packages, the Australian Research Council's administration of the National Competitive Grants Program and the Community Sport Infrastructure Grant Program.

In recommendation No. 1 the committee notes the recent regulatory changes to require all grant programs run by corporate and non-corporate Commonwealth entities be administered in accordance with the Commonwealth Grants Rules and Guidelines 2017. The committee recommends that the Department of Finance review the operation of the guidelines and associated regulations two years after the tabling of this report to ensure they remain efficient and effective.

In recommendation No. 2 the committee suggests that the Department of Finance, in consultation with the ANAO, revise its resource management guides to provide a single authoritative guide to grants administration, provide detailed information regarding legislative requirements of administrative officials and provide clear guidance where advice is either mandatory or optional in administering grants programs.

Recommendation No. 3 outlines that the Department of Finance should review the established reporting and compliance system and approach to ensure that Commonwealth grant program guidelines are adhered to at all points of grant administration for applicable entities and decision-makers.

The importance of record keeping was another key issue raised throughout the inquiry. As such, in recommendation No. 4 the committee outlined that the Department of Finance should review the official recordkeeping requirements of the Commonwealth Grants Rules and Guidelines 2017. This includes a focus on ensuring all parties involved in grant administration disclose and record any conflicts of interest. Further, recommendation No. 4 suggests changes be made to ensure records are kept of the reasoning of decisions of a relevant minister or ministers to approval or reject grant applications and recommendations, including ministerial panels. This is particularly important where a minister approves a grant that a relevant official or entity has recommended be rejected or assessed as ineligible.

Recommendation No. 5 addresses a number of potential improvements to the Commonwealth Grants Rules and Guidelines 2017. This includes recommending amendments to emphasise the importance of ensuring that all relevant entities involved in grants administration receive and complete sufficient training, with documented processes to ensure the ongoing quality assurance of assessments. Further, these amendments aim to ensure timely and consistent announcement and communication to stakeholders of grant opportunities and outcomes of grant programs and adherence to published guidelines.

Finally, recommendation No. 6 addresses the key issue of decision-making and recommends that Sport Australia review its guidelines in relation to all current and future grant programs to clarify the authorities and duties of the minister for sport and the Australian Sports Commission board and report back to the committee in six months.

The report is a consensus report of the committee that takes a thematic approach to issues contained within the audits examined. It includes additional comments by members of the opposition. On an issue of great public interest, such as this, it is pleasing to see that the committee has continued its tradition of working together in a productive way. I would like to thank all agencies and individuals who participated in both inquiries. I thank the deputy chair. I thank all members of the committee for their contributions and the inquiry secretariat. I commend the reports to the House. I move:

That the House take note of each report.

Kevin Andrews (Menzies, Liberal Party) Share this | Link to this | Hansard source

The debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.