Page 2739 - Week 07 - Tuesday, 29 June 2010
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In my view the existing performance audit function is viable, but just so.
That is the shame of this: it is just viable. Bob Sendt mentioned, and I have mentioned many times, that you need to look at the return on investment. That is what it is when you invest in the Auditor-General’s Office; that is what it is when you appropriate money for the Auditor-General: it is an investment in efficiency. It is an investment in delivering better services for the people of the ACT. It is an investment in the future.
The UK audit office says that for every pound you spend you get nine back. The review done of audit proceedings federally here in this country said that perhaps for every dollar you spend you get 10 back. The US Congress said for every dollar their audit office spends they might get $120 back, given the size and the scope of some of the programs that are rolled out in America. Whichever way you look at it, if you take on board the recommendations that the auditor makes and you use them to drive efficiencies, you use them to deliver more services or you use them to deliver savings, it is good money; it is well-spent money. But, unfortunately, because of the personal view that the Chief Minister takes, that is not found here in the ACT.
There are a number of other things mentioned in the report, such as: does the auditor have good practices? The Chief Minister was very concerned about the practice of running the office, and it was found that the auditor does have good practices. If there were any concerns about whether or not there was any bias, the report says no bias was found in the topics that were picked. Mr Sendt said there was a good process that led to the selection of topics, and I think we are all pleased with that. In regard to the quality of the product that the auditor’s office produces, Mr Sendt said that they are well put together reports, they are sound reports, they are very readable, they are very user friendly and they make very sound recommendations.
So, on just about every base that you wish to go to, the independent review of the Auditor-General’s Office really does show that we have an outstanding audit office. Does he make recommendations? Yes, he does. He makes suggestions about, for instance, the time frame in which these independent reviews should be carried out, and these are things that of course the public accounts committee will look at. But it is very clear from the quality of the report that it is important to take this information on board and to fund the audit office properly.
What we have said in the dissenting report, given that little or nothing is said about the audit office in the main report, is that we would like to see a progression. Currently, the auditor will tell you the split between financial audits—compulsory under the law; she has to do those—and performance audits is about 60-40; maybe it is 70-30. The audit office says that, based on looking around Australia and around the world, ideally where people want to be is about 50 per cent of your expenditure on financial audits, which sets the mark; therefore you should be able to achieve 50 per cent on performance audits.
Currently, the auditor is really struggling to do six or seven performance audits a year. The auditor has said her office lack the ability—again I think it is in the report—to do follow-up audits. (Second speaking period taken.) They lack the ability to do a
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