Providing a stimulus for better public administration

Over and above the recommendations that resulted from our audit coverage in 2006–07, the ANAO pursued activities on a number of fronts to help with the improvement in public administration — some these are highlighted below.

The ANAO’s strong support for public sector audit committees

For some time now the ANAO has been championing the role that audit committees can play in the public sector. Audit committees can be a forum for communication between management and internal and external auditors as well as bringing a degree of independence and expertise to an entity’s corporate governance arrangements. This includes reviewing the entity’s risk management framework; reviewing the entity’s financial statements and recommending their signature by the chief executive; approving the internal audit programme; and reviewing fraud control plans.

Also, many audit committees have embraced, as part of their responsibilities, providing advice to chief executives in relation to the Certificate of Compliance preparedness, particularly on the appropriateness of an agency’s control environment. The requirement, from the 2006–07 financial year, for chief executives of FMA Act agencies and directors of Commonwealth Authorities and Companies (CAC) Act authorities to provide an annual certification of compliance with legislative and policy elements of their financial management frameworks is a key government initiative that reinforces the importance of legislative and policy compliance.

The ANAO has noted that agency audit committee arrangements have progressively improved, and agencies have used the ANAO’s 2005 Better Practice Guide on Public Sector Audit Committees in carrying out reviews of their committees’ composition, structure and responsibilities. This has resulted in an increase in the number of independent members, including independent chairs, and the introduction, or formalisation, of a self assessment of audit committee performance.

Providing advice on better practice in public administration

During 2006–07 the ANAO produced four Better Practice Guides (BPGs) on the following topics:

  • Legal Services Arrangements in Australian Government Agencies — issued August 2006.
  • Implementation of Programme and Policy Initiatives: Making implementation matter (developed in partnership with the Department of Prime Minister and Cabinet) — issued October 2006.
  • Developing and Managing Contracts: Getting the Right Outcome, Paying the Right Price (developed in partnership with the Department of Finance and Administration) — issued February 2007.
  • Administering Regulation — issued March 2007

These Guides are being seen as useful pointers to better practice in public administration — the contract management BPG, in particular, has been in constant demand since it was published in February this year.

Given the success of these guides the ANAO will progressively revise and refresh previously issued BPGs where necessary.

In addition to the BPGs, the ANAO publishes ‘AUDITFocus’ newsletters – these are designed to succinctly capture some of our experiences that are likely to be of general interest to public sector managers. We continue to receive positive feedback on the newsletter both here in Australia and internationally.

Strengthening legal compliance

In last year’s report I foreshadowed the ANAO’s intention to increase its emphasis on legislative compliance. This was achieved as part of our audit coverage in 2006–07 by assessing key aspects of legislative compliance in relation to annual appropriations, special appropriations, annotated appropriations, special accounts and the investment of public monies. This focus has been complemented by the Government’s introduction of the annual Certificate of Compliance mentioned previously in the context of public sector audit committees.

The results of our audit coverage in this area to date suggest that agencies are paying increasing attention to their key legislative compliance responsibilities.