Resourcing the ANAO

The ANAO’s budget allocation in 2006–07 was $64.002 million – no further funding was sought or received during the year.

I advised the JCPAA in May 2007 that I had sought additional funding in the context of 2007–08 budget across two priority areas:

  • $19.6 million over four years to meet the requirements of new auditing standards.
  • $3.7 million over four years, to increase assistance provided to audit institutions in the Asia Pacific region.

The ANAO received half of the new funding we sought for meeting the requirements of the new auditing standards – that is, $9.8 million over four years. However, with my resignation as the auditor of the Telstra Group following the sell-down of the Government’s holding, agreement was given for the ANAO to retain some of the resources devoted to this audit as a contribution to these additional costs. The remaining shortfall of $2.2 million over four years will be made up from efficiencies generated by the ANAO in its operational activities.

The ANAO did not receive approval in the 2007–08 Budget for additional funds for increased assistance to audit institutions in the Asia Pacific region. However, we will review possibilities of obtaining funding from other sources on a government-wide basis. The ANAO continues to host representatives from overseas government bodies and we will examine ways to provide assistance to developing nations in the region. Our Australian Agency for International Development (AusAID) funded support activities for Indonesia and PNG have continued.

In addition, the JCPAA recommended that the ANAO receive additional funding of $1.5 million in the 2007–08 budget to produce an annual audit on progress in major ‘Top 30’ Defence capital equipment projects. The Prime Minister indicated that a submission, agreed between the Audit Office and Defence, should be brought forward in the context of the 2008–09 Budget to give effect to the Committee’s recommendation. In the meantime I have allocated resources to undertake preliminary work in anticipation of subsequent Budget decisions.

Overall, I advised the JCPAA that the ANAO’s budget for 2007–08 is sufficient to enable us to meet our auditing responsibilities. I appreciate the support of the JCPAA, the Government and the Parliament for the additional resources made available. However, the challenge of achieving ongoing productivity gains to offset wage growth, in a small agency context, plus the market driven cost pressures in the auditing market (particularly for audit contractors), continues to put pressure on our budget.

I advised the JCPAA that I will monitor our budget position and market conditions throughout the course of 2007–08, and inform the Committee of my assessment ahead of next year’s budget.