The Joint Committee of Public Accounts and Audit has undertaken a review of the Auditor-General Act 1997 (AG Act) approximately once per decade since the 1990s. The JCPAA launched this review in September 2020 to ensure that the AG Act has remained relevant, appropriate and consistent with other legislation, particularly in light of the Public Governance, Performance and Accountability Act 2013.
As the Act establishing the role of the Auditor-General and the Australian National Audit Office (ANAO), the JCPAA considers it vital that the AG Act remains fit for purpose. The Act needs to ensure the Auditor-General’s independence and remit, establish clear processes and interact consistently with other legislation.
This report includes some 27 recommendations for amendments to the AG Act and other related legislation. Many of the amendments recommended are technical in nature.
The inquiry considered the JCPAA’s role in relation to the ANAO. To strengthen and enhance this role, recommendations are made to expand the Committee’s involvement in the appointment process for the Auditor-General. This could include requiring unanimous approval of the Prime Minister’s nominee by the JCPAA, or endorsement by a super majority. A recommendation to clarify Committee’s duty to ‘consider the operations’ of the ANAO is also made so that this role is better understood.
One important and significant amendment is the recommendation related to strengthening the governance frameworks of the ANAO by amending section 8(2) of the AG Act. Rather than expressly ruling out any ‘implied functions, powers, rights, immunities or obligations arising from the Auditor-General being an independent officer of the Parliament’, the Committee recommends that Government consider clearly outlining each of these aspects and what impact this role has on the Auditor-General’s powers and functions.
Defining the term ‘independent officer of the parliament’ will assist in outlining the extent and nature of independence of the ANAO and clarify its remit. By first outlining this in relevant legislation, the Committee also sees merit in the ANAO becoming a department of the parliament. This will enhance and more appropriately define the legal framework within which both the ANAO and the Auditor-General sit.
One observation I would make is in relation to the discussion held during public hearings around what is considered government policy. It is well understood that the ANAO does not have a role in assessing the relative merits of government policy. I accept the difficulties outlined during this discussion in defining this term, and acknowledge it is not an easy issue to resolve, particularly given the need to ensure the ANAO’s independence.
However, the difficulties in arriving at a definition should not preclude a clearer understanding of ‘government policy’ such that the remit of the ANAO is clear to all observers, which will emphasise the ANAO’s independence. As such, the establishment of clear published guidelines, developed through consultation between the ANAO, PM&C, the APSC, the JCPAA and any other relevant entities will help to further clarify the role of the Auditor-General and ANAO.
I would like to thank all the witnesses who made submissions to this inquiry or appeared at a public hearing. I also thank my fellow members of the Joint Committee of Public Accounts and Audit for their engagement in this inquiry, their thoughtful contributions during hearings and other meetings and their input to this report.