House of Representatives Committees

Standing Committee on Economics, Finance and Public Administration

Review of ANAO Audit Report No.6 1996/97: Commonwealth guarantees, indemnities and letters of comfort

Media release, 29 September 1997

MANAGEMENT OF RISK BY GOVERNMENT AGENCIES

The House of Representatives Standing on Financial Institutions and Public Administration today tabled its report on ANAO Audit Report No 6 1996-97 on Commonwealth Guarantees, Indemnities and Letters of Comfort.

The report examines the management of risks associated with these contingent liabilities by government agencies.

David Hawker, Chairman of the Committee, said that the ANAO report revealed a disturbing picture of inadequate management of these instruments which potentially could expose the Commonwealth to losses.

The Commonwealth had not been informed of potential losses that might arise, Guarantees and Indemnities were rarely recorded and in too many cases not managed at all.

"As a result of the audit report and this inquiry, new guidelines have been issued to ensure that management of these instruments is put on a sound footing," said Mr Hawker.

"The concern the Committee has is that in the past similar guidelines appear to have been largely ignored, agency heads must now be required to observe the guidelines issued by the Department of Finance," Mr Hawker added.

The Committee is confident that if the recommendations made by the Committee and Audit are put into practice, together with ongoing monitoring by the Audit Office, management of risk will be significantly improved.

Ends 29 September 1997

Further information: David Hawker MP (Chairman) Parliament House (02) 6277 4100
Christopher Paterson (Inquiry Secretary) (02) 6277 4587

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