Chapter 6 - Improving Parliamentary oversight
6.1
If the budget documents were made more transparent and specific that
alone would be a significant step towards improving the Parliament's oversight
of Commonwealth funding and expenditure. Additionally, the Department of the
Senate could adopt procedures to assist committees and senators in their
consideration of these matters.
Senate committees
Consideration of Estimates
6.2
As discussed in Chapter 5, the Senate Finance and Public Administration
Committee tabled three reports on the PBS in 1997, 1999 and 2000. In its third
report the Committee repeated a recommendation it had made in the previous
reports, namely, that:
Senate legislation committees report in each budget estimates
report on the adequacy of the PBS provided for their use and in each additional
estimates report on the performance information examined.[1]
6.3
In Chapter 4 the Committee considered matters relating to the treatment
of funds for the ordinary annual services of government and, in particular, different
interpretations of the Compact of 1965. Professor Bartos was quoted in that
Chapter as suggesting that Senate committees should themselves be aware of the
significance of the Compact and raise it in their estimates at budget time.[2]
6.4
The Committee considers that it would assist the Senate's scrutiny of
Commonwealth funding and expenditure if committees reported regularly on the
above matters.
Recommendation 17
6.5
The Committee recommends that the Senate Standing Legislative and General
Purpose Committees report as necessary in their reports on the estimates on the
format and contents of the PBS and PAES that are referred to them.
Reports on Annual Reports
6.6
ANAO pointed out that there is a strong emphasis in the current
budgetary framework on the compatibility of the reporting documents,
particularly the PBS, PAES and agencies' annual reports. ANAO submitted that compatibility
between these documents is essential for the comparison of budgeted targets and
those actually achieved.[3]
6.7
It would be useful therefore if Legislative and General Purpose
Committees in their reports on annual reports checked that the reports
accurately reflect the performance indicators in the PBSs and PAES. It would
also be useful if they reported on comparisons of the final expenditure on
outputs (or programs) with the estimates.
Role of the Auditor-General
6.8
In response to an invitation by the Committee to nominate how ANAO might
specifically assist Senate committees in the examination of estimates, ANAO
suggested the following:
- The Auditor-General and senior staff could provide a briefing for
the Committee on contemporary issues influencing public administration. There
may also be advantages in the Department of Finance and Administration also
participating in any such briefing, but that would be a matter for that
Department and its Minister.
- We [ANAO] could produce a synopsis of recent audit activity for
each portfolio including a summary of recent performance reports tables in the
Parliament and major issues that arose in the audit of the most recent
financial statements. This would ensure the Committee was aware of ANAO's audit
activities on a portfolio basis. We could supplement this approach with
additional briefing for the Committee or for individual members.
- ANAO currently produces a newsletter for agencies titled
"Auditfocus". This newsletter seeks to capture some of the lessons
from our audit work that are likely to be of general interest and application,
and in this way make a positive contribution to better public administration. A
similar document could be produced for Estimates Committees.[4]
6.9
The Committee considers that these suggestions, if implemented, should
be of considerable assistance to the Senate committees.
Recommendation 18
6.10
The Committee recommends that the Committee Chairs Group examine
proposals made by the Auditor-General for measures to assist the Legislative
and General Purpose Standing Committees in their consideration of the
estimates.
Committee staff
6.11
In response to a request from the Committee[5]
that he consider how Senate staff might provide additional assistance to senators
and committees in their scrutiny of expenditure, the Clerk stated that a number
of procedures would be implemented, namely, that Senate committee staff would
monitor the financial reports of government agencies to draw committees'
attention to:
- new or amended special appropriations;
- the establishment of or changes to special accounts;
- statements of expenditure from the AMF;
- significant changes of programs and projects to outcomes, unusual
or unexplained allocation of items to outcomes and other unexplained
expenditure; and
- expenditures from Appropriation Bill (No. 1) which do not meet
the test of ordinary annual services.[6]
6.12
The Clerk noted that committees could decide to pursue these matters or
individual senators could decide whether to pursue them in the course of
estimates hearings.
Legislative changes
6.13
Measures to support scrutiny should be considered together with
legislative changes which could be made to reassert the parliamentary process
of approval of appropriations and their purposes.[7]
6.14
A number of witnesses suggested that there could be value in amending
the Appropriation Acts.
6.15
The Committee discussed and supported in Chapter 4 an ANAO suggestion
that there could be benefit in addressing in the Acts explicitly the difference
between 'departmental' and 'administered' expenditure.[8]
6.16
Legislative changes could include the presentation of data under better
defined outcomes (and/or under programs) in the Schedules to the Acts. As
discussed in Chapter 3, the specification of the relevant terms and conditions
(including common eligible receipts) for net appropriations could again be
included in the Appropriation Acts, and the terms 'departmental' and
'administered' could be defined in the Acts.
6.17
The Acts could also be amended to ensure that amounts identified as
departmental items must be expended against one or other of the specified outcomes
(or programs).
6.18
Professor Lindell suggested that the Senate should insist:
... on the alteration in the words of s 7(2) in future Appropriation
Bills No. 1 so as to restore the need for any approved expenditure to be
legally linked to, and connected with, a specific purpose or, to use the
current language employed to reflect accrual budgeting, a specific 'outcome'.
It hardly needs to be emphasised that the need to link expenditure with a
defined purpose forms an essential part of the accountability for expenditure
of public funds.[9]
6.19
It might be argued that a requirement that expenditure on departmental
items must be against one or other of the nominated outcomes could adversely
affect agencies' efficiency. It could be alleged, for example, that agencies would
have less flexibility in the use of their appropriated resources than under the
present arrangements, or, indeed, had under the running costs system. Against
that, agencies should be able to retain a great deal of autonomy with regard to
the application of their resources, but would not be able to allocate
appropriated funds for purposes not specifically approved by the Parliament.
6.20
Professor Lindell submitted a pertinent quote from Alfred Deakin who
stated in 1902 that:
An Appropriation is a definite parliamentary authority to spend
money for a specified purpose. Annual Appropriation Acts usually enact that
certain sums 'are hereby appropriated, and shall be issued and applied' for the
purpose specified.[10]
6.21
It would of course be open to the government, as it is now, to bring
additional appropriation bills before the Parliament if the need arose for
additional appropriations beyond the scope of the AFM.
Committee's conclusions
6.22
The Committee expects that the measures discussed above would enhance
and reinforce parliamentary control over Commonwealth public funding and
expenditure.
Recommendation 19
6.23
The Committee recommends that the Government ensure that future
appropriation bills that the Senate cannot amend under the provisions of the
Constitution restore the need for any approved expenditure to be legally linked
to and connected with a specific outcome or purpose.
Navigation: Previous Page | Contents | Next Page