Audit reports creating a winter of discontent for APS bosses

How much must APS bosses be hating on the Australian National Audit Office right now?

It’s the season for another round of performance audits being tabled in parliament, and with all the focus on transparency and accountability in the APS, more attention than ever before is being given to these reports.

Rona Mellor is the Acting Auditor-General, and she and her team are doing a sterling job getting to the nitty-gritty of public sector performance.

It’s exactly that – public sector performance – that the ANAO is there to explore.

The audit office’s purpose is to support accountability and transparency in the Australian Public Service and the overall Commonwealth Government sector through independent reporting to the Parliament.

In doing that, the office contributes to improved public sector performance and, according to its mission statement, delivers its purpose under the Auditor-General’s mandate in accordance with the Auditor-General Act 1997, the Public Governance, Performance and Accountability Act 2013 and the Public Service Act 1999.

From what we’ve seen for some time now, and manifesting strongly again in just the past week, the ANAO is taking its job very seriously.

Since this time last week, the office has landed a number of its reports exposing deficiencies in various aspects of public administration.

While those reports described various levels of effectiveness at whatever the audit happened to be scrutinising, they have also laid bare some glaring problems in need of serious attention.

In the past seven days alone, we have learned (and this is just a small snippet of examples):

• The Department of Agriculture, Fisheries and Forestry’s arrangements to manage changes made through its digital reform program are partly effective because it “has not fully implemented change management arrangements for the program”.
• The Australian Digital Health Agency’s procurement and contract management of the My Health Record National Infrastructure Operator has only been partly effective and its “effectiveness has been diminished by poor procurement planning and failure to observe core elements of the Commonwealth Procurement Rules”.
• The Department of Home Affairs’ design and administration of the Adult Migrant English Program contracts have not been effective.
• AUSTRAC and Services Australia’s implementation of arrangements to manage cyber security incidents has only been partly effective because “neither entity is well placed to ensure business continuity or disaster recovery in the event of a significant or reportable cyber security incident”.
• The Department of Home Affairs’ evaluation and reporting of the Skilled Refugee Labour Agreement pilot program was so bad that the Audit Office labelled it “not fit for purpose”.
• The Productivity Commission’s credit card register was “incomplete and inaccurate, and monitoring and reporting on credit card use was not regular and systematic”.
• The Australian Public Service Commission “did not have a sound basis for monitoring and evaluating the extent to which agencies incorporate and uphold the APS Values, or the adequacy of systems and procedures in agencies to ensure compliance with the Code of Conduct”.
• The Department of Defence has scope “to improve the transparency of its public reporting on individual advertising campaigns and to strengthen the assurance provided to the Secretary of Defence on compliance with the principles of the campaign advertising framework”.
• Treasury has reduced the transparency in public reporting for hospitality that officials have received. Not all statutory office holders that are officials of Treasury are provided guidance and training in relation to gifts, benefits and hospitality. This has led to two instances of non-compliance with Treasury’s internal policy requirements and a further 10 instances of non-compliance with the Public Governance, Performance and Accountability Act and APSC Guidance for Agency Heads — Gifts and Benefits.

That last one is a bit of a doozy.

That particular report goes on to explain that Treasury head Steven Kennedy hadn’t declared his attendance at events where substantial hospitality was provided.

The events in question were gala nights, lunches and dinners in 2022 and 2023 hosted by the Australian Financial Review, Westpac, Qantas and the Business Council of Australia.

He should have reported all of them on the public register, as senior officials from other government agencies at these events did.

A budget night event held by the Treasurer’s office in March 2022, where official hospitality valued at $14,990 was provided, had no written record of approval prior to the commitment of relevant money.

“Treasury was aware of the matter, and a Public Governance, Performance and Accountability Act breach was recorded on its internal non-compliance register in 2021–22,” the audit states.

“The approval process for the Treasurer’s office relating to official hospitality was subsequently revised to require Treasury to provide approval for official hospitality.”

While the audit provides assurance to the parliament that Treasury has (eventually) complied with gifts, benefits and hospitality requirements, it has exposed its flouting of the rules.

“Public service entities must meet public expectations of integrity, accountability, independence, transparency and professionalism,” the report states.

“Acceptance of a gift or benefit that relates to an official’s employment can create a real or apparent conflict of interest that should be avoided.

“Public confidence in Commonwealth entities and the APS can be damaged when gifts and benefits that create a conflict of interest are accepted or not properly declared … The appearance of a conflict can be just as damaging to public confidence in public administration as a conflict which gives rise to a concern based on objective facts.”

Hear, hear, we say, and more power to the ANAO – despite what the public sector hierarchy might really be thinking about this whole audit process.