Page 2640 - Week 08 - Tuesday, 23 June 2009
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statement audits for the normal government departments and agencies, and it does this in just the same way that external auditors audit companies and other entities. It does it basically for the same reason that other people get things audited. These audits provide the independent assurance to the parliament and the community that the information contained in the financial statements of the various public sector entities which are audited are fairly presented in accordance with the Australian accounting standards and the applicable legislation. This part of the Auditor-General’s work is actually funded as part of the departments’ budgets. It is a cost to the departments, so it is not part of the A-G’s budget allocation, which is what we are discussing right now.
The Auditor-General also gives general advice to agencies with respect to new accounting standards. Recently there have been significant changes to the international financial reporting standards, which I will talk a little about later.
The Auditor-General also does performance audits. These are audits which evaluate whether or not the organisation, or the program, is achieving its objectives effectively and whether it is doing so economically, efficiently and in compliance with all of the relevant legislation. These are the things which are funded by the budget in the A-G’s appropriation, and these are the things which are under threat in this budget.
As you can see, the Auditor-General has a very important role, firstly, in making sure that the books of the government are accurate—that is the financial statements audit—and, secondly, in reporting on how well departments and agencies are fulfilling their functions. That bit is the performance audit part. This is vital information for parliament and the community to scrutinise the government’s performance. That is the function that we are basically talking about today in this appropriation, and this is the function that is so annoying the government that they do not want to adequately fund it.
Some overseas auditors-general, notably the British, have gone as far in their work as trying to work out how much money the auditor-general saves through performance audits. The British auditor-general decided that there was possibly a nine times payback. No figures, to my knowledge, have been done in the ACT, but I am certain that it would be a positive payback.
As people may be aware, I am the chair of the public accounts committee, and we recently went to New Zealand for a meeting of the Australasian Council of Public Accounts Committees. I can report back that every single public accounts committee, from all of the Australian states, the federal parliament and a number of associated Pacific island states, said that they found their auditors-general absolutely invaluable and they found the performance audits absolutely invaluable. There was unanimity that this is an essential part of executive accountability. If the legislature is to do its work, we have to have reliable information. The Auditor-General, through the performance audits in particular, is a key way that we get this information.
Looking, as Mr Seselja said, at the situation in the ACT, I noted in Saturday’s Canberra Times Mr Stanhope made a number of comments in relation to the Auditor-General’s report on ambulance services. I quote from the Canberra Times. He said:
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