Lucy Wicks (Robertson, Liberal Party) Share this | Link to this | Hansard source

I wish to make a statement on behalf of the Joint Committee of Public Accounts and Audit Committee concerning the draft budget estimates for the Australian National Audit Office and the Parliamentary Budget Office for 2021-22. In doing so, I'd like to acknowledge the presence in the chamber of the deputy chair, the member for Bruce, and to thank him and all members of the committee for their ongoing role in the important work that this committee does.

The committee is required under the Public Accounts and Audit Committee Act 1951 and the Parliamentary Service Act 1999 to consider the draft budget estimates of the ANAO and the PBO and to make recommendations, including to both houses of parliament, regarding these estimates. With regard to the Parliamentary Budget Office, the committee has been informed that the PBO has sought additional funding of $3.6 million over four years in the 2021-22 budget to allow it to maintain and expand its publicly available research. The PBO states that additional funding over the 2021-22 to 2024-25 period would allow the continued production and publication of new material during the peak period of the six to nine months around an election. It would also assist in improving the usability and accessibility of the PBO's website, assist in the hiring of a team of five staff to expand the PBO's work, and allow the PBO to maintain its special appropriation. This is substantially similar to the PBO's $3.1 million request last year, which the government did not fund in the previous budget.

The JCPAA recognises the important role that the PBO can play in shaping the parliament's and the public's understanding of our economic and fiscal environment. The committee notes that the agency received $5.3 million in the 2019-20 budget to uplift its funding base to meet demand and modelling costs. The JCPAA supports the Parliamentary Budget Office's request for additional funding over the forward estimates, acknowledging the continued difficult budgetary conditions arising from the COVID-19 pandemic.

With regard to the ANAO's 2021-22 budget estimates, the Auditor-General is seeking supplementation of $8.8 million in 2021-22, rising to $11.6 million by 2024-25—or $41.4 million over four years—to address existing cost pressures and to restore, by 2024-25, the ANAO's capacity to meet its longstanding target of delivering 48 performance audits annually. The committee has advised that this will also assist in ensuring that quality and auditing standards in financial statement auditing are met and maintained. The ANAO states that supplementation is required to deliver an appropriate number of performance audits, to conduct mandatory financial statement audits, and to meet quality standards in IT and data storage security requirements.

The committee notes that in recent years the ANAO has delivered a reduced number of audits. In 2019-20 the ANAO delivered 42 audits and in 2021-22 the Auditor-General forecast delivering 40 audits, falling to 36 by 2024-25. In the ANAO's 2019-20 annual report, the Auditor-General has outlined that this is due to several factors. These include insufficient resourcing; higher-than-average audit costs resulting from cost pressures, including the need to train new staff due to high turnover; more complex audit issues; challenges from entity recordkeeping systems; and increased contract out costs for financial statements audits.

The JCPAA further notes that the ANAO has reported an operating deficit in recent years, including a total operating deficit of $3.117 million for the 2019-20 financial year and a $4.778 million operating deficit in 2018-19. It notes that this is inclusive of one-off costs for property. The ANAO is also seeking funding of $3.1 million in 2021-22, rising to $8.9 million by 2025-26—or $30.7 million over five years—to implement mandated performance statement audits, following a recent pilot program.

As part of the pilot, audits were completed on two entities: the Attorney-General's Department and the Department of Veterans' Affairs. These audits aim to drive improvements in the transparency and quality of entities' performance reporting and to increase entities' accountability to the parliament and the public. The ANAO submits that this pilot demonstrates benefits in improving the reliability, relevance and completeness of performance statements of the entities involved. The committee notes that developing a methodology and capability for performance statement audits has been a long-running project over many parliaments and supports the intent of such audits.

The committee endorses the Auditor-General's request for supplementation to build the capability of the ANAO to return to a capacity to deliver 48 performance audits annually by the end of the forward estimates. The committee considers that increased funding consistent with a return to the historic target is important in the near term to commence that trajectory. Further, the committee considers that there are opportunities to provide for a more sustainable, ongoing funding model to avoid regular returns to the government and is examining this issue in its 10-year review of the Auditor-General Act 1997.

Finalisation of this report need not preclude a funding commitment in this budget. Members of the JCPAA acknowledge the difficult budgetary conditions due to COVID-19, in which this request is made, whilst understanding the importance and value of a robust audit function in achieving value for taxpayers and greater efficiency and effectiveness of government expenditure. The committee also endorses the Auditor-General's proposal to implement mandated performance audit statements in a staged approach and recommends that ongoing funding be provided to the ANAO to undertake this work.

I thank the Auditor-General and the Parliamentary Budget Office for their work in support of the parliament and the JCPAA. I present a copy of my statement.

Sit ting suspended from 16:27 to 19 : 30