1.1
The Joint Committee of Public Accounts and Audit (JCPAA) is the Parliament’s joint public administration committee. The Committee scrutinises the governance, performance and accountability of Commonwealth agencies, and has the power to inquire into all expenditure of Commonwealth money.
1.2
This report covers two Committee inquiries, based on two audit reports:
Commonwealth Financial Statements, based on Audit Report No. 24 (2017-18), Audits of the Financial Statements of Australian Government Entities for the Period Ended 30 June 2017—see Chapter 2
Foreign Investment Obligations in Residential Real Estate, based on Audit Report No. 48 (2017-18), Managing Compliance with Foreign Investment Obligations for Residential Real Estate—see Chapter 3
1.3
The terms of reference for the Committee’s second inquiry in Commonwealth Financial Statements had a particular focus on the following matters raised in Audit Report No. 24:
equity investment, concessional loans and contingent liabilities, and the applicable budget, accounting and valuation rules
significant and moderate findings for the National Disability Insurance Agency (NDIA)
management of IT controls
1.4
The Auditor-General’s financial statement audits play a critical role in ensuring accountability to the Parliament and the Australian public for the expenditure of public funds. The audits provide independent assurance that this information is accurate and that the financial management of Commonwealth entities is effective. Audit Report No. 24 provides the results of the final audits of the Consolidated Financial Statements (CFS) and the financial statements of all Commonwealth entities.
1.5
The Committee’s recommendations included that:
the Northern Land Council report back on progress in responding to the two significant legislative breaches reported in Audit Report No. 24 (2017-18)
should the Australian National Audit Office (ANAO) audit of the NDIA financial statements for the period ended 30 June 2018 result in any significant or moderate audit findings, the NDIA report back on progress in responding to such findings
should the ANAO audits of the financial statements of the Australian Federal Police, the Department of Defence, the Director of National Parks and the Department of Home Affairs for the period ended 30 June 2018 result in any significant or moderate audit findings, these entities report back on progress in responding to such findings
in reporting back on progress in addressing any IT related significant or moderate audit findings, entities should outline what assurance for IT controls is undertaken by the entity’s audit committee
the Department of Finance (Finance) report back on ways to further promote public transparency across budget and financial reporting documentation regarding alternative financing mechanisms
the ANAO consider: undertaking an audit of one complete Commonwealth financial reporting cycle (for one or more Commonwealth entities), focused on a clear read of financial information across aggregated and disaggregated financial reporting documentation; and reporting in greater detail on alternative financing mechanisms in its Key Audit Matter reporting
the Parliamentary Budget Office consider undertaking further research into promoting public transparency of budget and financial reporting documentation, and ways to improve tracking of aggregated and disaggregated financial information across such documentation
the ANAO consider reporting back on how the rollout of digitised annual reports by Finance might assist in the development of performance targets or benchmarks to enable Commonwealth entities to assess their own financial sustainability against agreed parameters over time
1.6
In its inquiry into Foreign Investment Obligations in Residential Real Estate, based on Audit Report No. 48, the Committee examined the effectiveness of the Australian Taxation Office’s and Department of the Treasury’s implementation of changes to responsibility for the enforcement of the Foreign Acquisitions and Takeovers Act 1975 (Cth) and associated regulations, as well as their management of compliance with this regime.
1.7
The Committee’s recommendations included that:
the Australian Taxation Office report back to the Committee on its progress in implementing Audit Report No. 48 recommendations
in a future review of the Foreign Acquisitions and Takeovers Act 1975 (Cth), the Department of Treasury consider including positive obligations on the intermediary community to report clients they suspect are in breach of the Act
the Australian Taxation Office prioritise and improve its processes around data analysis of the geographic location of breaches, data matching rules regarding beneficial ownership of property, and the application of civil and criminal penalties for breaches of the Act