Chapter 11: External Scrutiny

• Parliamentary Committees
• Reports by the Australian National Audit Office (ANAO)
• Substantial Legal Actions involving Finance
• Commonwealth Ombudsman’s Office Investigations

External Scrutiny

Finance is subject to external scrutiny from many sources. In 2008-09, various parliamentary committees conducted inquiries that were relevant to Finance. These included the Joint Committee of Public Accounts and Audit (JCPAA), the Senate Standing Committee on Finance and Public Administration (SSCFPA) and the Parliamentary Standing Committee on Public Works. The Australian National Audit Office (ANAO) performed a series of audits on activities that were relevant to the department and Finance was involved in several significant legal actions. The department also cooperated with investigations undertaken by the Commonwealth Ombudsman. This chapter focuses on the reviews, inquiries, audits and legal actions where Finance’s involvement was substantial.

Parliamentary Committees

Joint Committee of Public Accounts and Audit

The JCPAA is responsible for holding Australian Government agencies to account for the lawfulness, efficiency and effectiveness with which they use public monies. Given Finance’s accountability role, the committee often asks the department to contribute to its inquiries.

On 4 June 2008, the JCPAA opened an inquiry into the impact of the efficiency dividend on smaller public sector agencies¹. The committee initiated the inquiry following public discussion about the impact of the government’s one-off two per cent efficiency dividend on these agencies, and the related impact of the ongoing efficiency dividend. Finance lodged a submission to this inquiry with the JCPAA on 4 July 2008 and appeared before the hearings of the Committee on 19 September 2008. The committee tabled its report on 4 December 2008, recommending a revised approach to the application of the efficiency dividend to smaller agencies. The government’s response to the report’s eight recommendations was under consideration at 30 June 2009.

On 12 February 2009, the JCPAA invited Finance to give evidence to its inquiry into the role of the Auditor-General in scrutinising government advertising campaigns. The department appeared at public hearings on 11 March and 13 May 2009 and provided a submission on 1 June 2009. The inquiry was still underway at 30 June 2009.

The committee commenced a review of the Auditor-General’s reports, numbers 18 to 31, 2008-09 on 13 May 2009. This review included Audit Report 25: Green Office Procurement and Sustainable Office Management. Finance appeared at a public hearing of the committee on 24 June 2009 to discuss the report. The review was still underway at 30 June 2009.

On 22 June 2009, the JCPAA tabled Report 412 – Review of Auditor-General’s Reports tabled between August 2007 and August 2008. The report included five recommendations directed to Finance on matters related to: agency compliance with the Senate Order for the production of lists of departmental and agency contracts; the handling of legal advice obtained by agencies; and support Finance provides to agencies related to information technology security. The report’s recommendations were under consideration at 30 June 2009.

Senate Standing Committee on Finance and Public Administration

The SSCFPA is responsible for Senate oversight of several portfolios including Finance. During 2008-09, Finance appeared at the estimates hearings of the SSCFPA on 21 October 2008, 24 February 2009 and from 27 to 28 May 2009. The committee tabled reports that covered the two 2009 hearings on 17 March 2009 and 23 June 2009 respectively. The report tabled on 17 March contained three recommendations for Finance relating to the implementation of Operation Sunlight reforms. These recommendations were under consideration at 30 June 2009.

Officers of the department appeared before the SSCFPA’s inquiry, Nation Building and Jobs Plan – Inquiry into the provisions of the Appropriation (Nation Building and Jobs) Bill (No.1) 2008-2009 and 5 related bills², at its hearings on 5 and 9 February 2009. The committee tabled its report on 10 February 2009 with the majority recommending the Senate pass the Bills.

Finance’s 2007-08 Annual Report noted that the SSCFPA recommended the department report on the long-term effect of efficiency dividends on the outcomes and services provided by different types of government agencies³. This request was deferred pending the JCPAA's inquiry into the effects of the ongoing efficiency dividend on smaller public sector agencies (outlined above). The department intends to respond to this matter once the government has finalised its response to that report.

Finance’s 2006-07 Annual Report noted that the SSCFPA tabled its report, Second report on the operation of the Senate Order for the production of lists of departmental and agency contracts (2003-06) on 27 February 2007. The report made nine recommendations directed to Finance. The government provided a response to the report on 26 August 2008 supporting the report’s recommendations, except for the proposal to extend the coverage of the Senate Order to include CAC Act agencies, as these agencies operate under a different legislative and governance framework to those that are subject to the Senate Order.

Finance’s 2007-08 Annual Report noted that the SSCFPA tabled its report, Transparency and Accountability of Commonwealth Public Funding and Expenditure on 1 March 2007. The Minister for Finance and Deregulation noted that a final response would be provided following the completion of the review of budget transparency matters, including Operation Sunlight, by former Senator Andrew Murray. Senator Murray provided his report to the government on 9 June 2008 and the government released its response to Senator Murray’s review on 9 December 2008. A final response to the SSCFPA report was under consideration at 30 June 2009. Further details relating to Operation Sunlight can be found in Chapter 4 – Outcome 1: Sustainable Government Finances.

Senate Standing Committee on Economics

On 25 November 2008, Finance gave evidence to the Senate Standing Committee on Economics’ inquiry into the Nation-building Funds Bill 2008; the Nation-building Funds (Consequential Amendments) Bill 2008 and the COAG Reform Fund Bill 2008. The committee tabled its report on 2 December 2008 recommending the Senate pass the Bills.

Parliamentary Standing Committee on Public Works

The Parliamentary Standing Committee on Public Works, also known as the Public Works Committee, reviews all public works valued above $15 million.

On 22 September 2008, the committee published Report 7/2008 – Update Report: the Christmas Island Detention Project. The committee expressed concern about cost over-runs associated with the project and noted that the ANAO was undertaking an audit of the project⁴ (outlined in the Reports by the Australian National Audit Office section of this chapter).

On 4 December 2008, the Australian Security Intelligence Organisation and Finance provided a confidential briefing to the committee in regards to the Commonwealth New Building Project. This briefing was offered to the committee after the Governor-General granted the project an exemption from scrutiny by the committee on 4 October 2007 (under paragraph 18(8)(c) of the Public Works Committee Act 1969), because the work is for defence purposes and referring it to the committee would be contrary to the public interest.

On 14 May 2009, Finance provided a proposal to the committee to undertake works to enable the Department of Defence to take up the tenancy of the refurbished ANZAC Park West office building in Parkes, Canberra. The committee was still considering the proposal at 30 June 2009⁵.

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