Linda Burney (Barton, Australian Labor 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 509: inquiry into public sector information technology procurement and projects, Report 510: inquiry into the use and governance of artificial intelligence systems by public sector entities'Proceed with caution',Report 511: inquiry into the contract management frameworks operated by Commonwealth entities and Report 512: report of the inquiry into the administration of Commonwealth regulations.

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

by leave—I now present four reports of the Joint Committee of Public Accounts and Audit.

Report 509: i nquiry into public sector information technology procurement and projects found shortfalls in capability, planning and management at Commonwealth entities for external information technology contracts.

A key question that arose during this inquiry was whether Australian government departments have the adequate capability to deliver information technology systems, programs, projects and reforms.

Factors such as labour market competition impact on internal knowledge and skills in information technology.

This can lead to agencies having to supplement this capability through outsourcing, which can perpetuate their capability loss and continue to trend towards reliance on external contractors.

The committee's view is that departments should aim to enhance their internal knowledge and capability, and, if outsourcing is required, they should ensure that their own expertise on project requirements is maintained.

The committee also takes the view that engagement should be planned appropriately with a longer term view to enhancing internal capability and that outsourcing should not be seen as a permanent feature of information technology delivery.

Departments should also have strategic and longer term approaches to supplementing staff capabilities and embed this organisational thinking in governance documents such as procurement plans.

Projects discussed during the inquiry also suggested to the committee that the budgetary processes used for information technology investments could benefit from a longer term outlook.

Given that large infrastructure and defence projects allow for sustainment and asset management funding, information technology systems should be treated in a similar way to allow for both ongoing sustainment and changes in response to new policies or technologies.

The committee recommended that the Department of Finance improve the guidance given to other government entities about how to most effectively procure information technology.

The committee also recommended that the Department of Finance and the Digital Transformation Agency collaborate more closely to provide better guidance.

Report 510 : i nquiry into the use and governance of artificial intelligence systems by public sector entities concluded that, while AI systems can provide substantial benefits, they also pose potentially significant risks, especially in areas involving direct service delivery to the public.

The potential benefits of generative AI in terms of efficiency and productivity include the drafting and editing of documents, generating visually engaging presentations, summarising long and complex documents and conducting preliminary research.

The committee acknowledges however that common risks associated with the use of AI can include:

Evidence to the inquiry indicated that there are areas where the Public Service should not use AI. The European Union, for example, prohibits AI systems such as social scoring.

Australia would benefit from clearly defining a similar list of prohibited AI systems. The committee is also of the view that these systems must never be used for surveillance purposes in the Public Service or elsewhere.

Private information must also not be provided to generative AI systems where its security cannot be assured.

The committee shares the concerns of inquiry participants regarding the potential for generative AI or machine learning systems to reproduce negative biases present in their training data.

Strong evidence was presented to the committee that the presence of an informed human in the loop, while not completely removing the risk of unintended consequences, may reduce the risks where AI is used alongside automated decision-making.

The committee is also cognisant that not enough information is yet available on how many Public Service staff are using AI systems or what they are using them for.

There was consensus among inquiry participants that more AI training is needed at all levels. This will be critical to reducing the risk of AI systems being inadvertently misused, including situations where sensitive personal information is involved.

This field is developing rapidly, particularly in relation to generative AI. Effective and coordinated governance frameworks for AI use must be developed now before this technology outpaces government's ability to do so.

Among the committee's recommendations are a whole-of-government working group to consider rules and governance frameworks for AI and that a statutory joint committee on artificial intelligence and emerging technologies should be established to enable more effective parliamentary oversight.

To help inform future policy decisions, the committee is also recommending that the Australian Public Service Commission introduce questions on the use and understanding of AI and other emerging technologies into its annual APS employee census.

R eport 511 : I nquiry into the contract management frameworks o perated by Commonwealth entities found that a well-executed procurement process will not deliver value for money to taxpayers unless it is followed by effective contract management.

The committee has found that contract management is an important skill which has likely not had the same level of attention or development as procurement but is just as vital to project success.

The evidence to the inquiry revealed weaknesses in public sector contract management in several key areas, including:

Central to the committee's conclusions in this inquiry are that the Department of Finance needs to be more than just a policy steward providing advice and resources.

The committee understands that it is not feasible for Finance to be an overarching authority on the many thousands of contracts that exist across the Commonwealth.

The committee believes, however, that Finance must be more proactive in detecting and responding to 'red flags' in contract management capability, particularly when huge amounts of taxpayers' money are being expended.

The committee has recommended that the Department of Finance's self-assessment survey on procurement and contract management becomes mandatory and that the department take corrective actions if this survey reveals shortfalls in capability.

The committee is further recommending that the Department of Finance consults with the Australian National Audit Office and other relevant agencies as needed to produce more effective guidance in the aforementioned areas of contract management weaknesses that the committee has identified.

During the inquiry, the ANAO noted that it is having to increasingly use its legislative powers to obtain the information it requires to conduct an audit.

The committee fully supports the ANAO's contention that these powers should only be needed under very specific circumstances and that for most audits it should have unfettered access to the information it requires.

The committee has recommended that the ANAO report back with more detail on the increased need to use its legislative powers and that it provide a suggested course of action for the committee's consideration.

Finally, our Report 512: Inquiry into the administration of Commonwealth regulations found that government regulation has a profound effect on the daily lives of all Australians.

When it's administered effectively, regulation protects the public interest, ensures the efficient delivery of services, promotes trust, and improves community safety and wellbeing.

During this inquiry, the committee examined how regulators:

The committee found the performance of regulators to be patchy. Some entities are failing to effectively regulate at all, or their regulation was only partially effective. Even where entities were found to be largely effective, there were gaps and inconsistencies across various areas.

Some of the shortcomings, particularly the Department of Home Affairs' failure to effectively regulate migration agents and the Department of Industry, Science and Resources' oversight of trade measurement, were plainly unacceptable.

The committee made specific recommendations regarding these entities to ensure ongoing accountability for rectifying the issues discovered in the audits that formed the basis of this inquiry.

Accountable authorities of entities with regulatory obligations are ultimately responsible for ensuring these obligations are met. The committee concluded that transparency as to regulator obligations is an important aspect of accountability.

Accordingly, the committee made a very important recommendation that the Department of Finance expands the scope of the regulator stocktake to require entities with regulatory responsibilities to publish a regulator statement that provides information on regulatory obligations and how these are operationalised.

By implementing this recommendation, Finance will go some way to establishing a framework that will allow for greater accountability for what are significant responsibilities with potentially wide-ranging consequences if not performed appropriately.

The committee also examined the policy advice provided by the Department of Finance. Principles based policy advice provides information on the general disposition of regulators; the findings of audits by the ANAO over many years show entities require more practical advice on how to go about their regulatory responsibilities.

Finance has not been able to satisfy the committee that its policy advice is fit for purpose in light of the shortcomings in performance consistently uncovered by the Australian National Audit Office.

Consequently, again the committee has recommended that Finance develop an approach, including robust metrics, to provide reasonable assurance that the policy framework it administers with regard to regulatory policy, practice and performance is effective in ensuring regulatory systems function as intended by law.

Together, the nine recommendations in this report, when implemented, will go a long way to establishing transparency and robust accountability across the broad scope of Commonwealth entities with regulatory responsibilities, and the policy owner.

It is through transparency and accountability that the Australian public can maintain trust and confidence in the regulation that contributes so profoundly to improving their daily lives in a myriad of ways.

In closing, I thank the deputy chair, Linda Reynolds, and other committee members for their contributions to each of these important inquiries. I also thank the many contributors to these inquiries for providing written submissions and attending public hearings. I also acknowledge the professionalism of the secretariat in supporting this committee throughout the current parliament. I commend these reports to the House.