Infrastructure, Transport, Regional Development and Local Government

Audit strategy overview

Portfolio responsibilities include: providing, evaluating, planning and investing in infrastructure; fostering an efficient, sustainable, competitive, safe and secure transport system; and helping regions and local government develop and manage their futures.

ANAO’s recent performance audit activities have focused on the funding and delivery of transport infrastructure and administration of regional grants programs, such that each of the major funding programs has been examined on at least one occasion. ANAO has also recently completed an audit of Infrastructure Australia’s conduct of the national infrastructure audit, and development of the infrastructure priority list.

Current audits due to table in 2010–11 include three that are examining the administration of the two major regional funding programs as well as further audits of the funding of infrastructure projects through the Jobs Fund. In addition, audit work is underway in the area of transport safety regulation, through an audit of the Civil Aviation Safety Authority’s implementation and management of its safety management systems approach, and there is an audit of the Aviation and Maritime Security Identity Cards.

Audits in progress at 1 July 2010

Conduct of the National Infrastructure Audit and Development of the Infrastructure Priority List

Infrastructure Australia was established to conduct audits to determine the adequacy, capacity and condition of nationally significant infrastructure and to develop Infrastructure Priority Lists that prioritise Australia’s infrastructure needs. The results of the first National Infrastructure Audit were published in December 2008 and the first Infrastructure Priority List was published in May 2009. The objective for the audit is to assess the effectiveness of the conduct of the first National Infrastructure Audit and development of the Infrastructure Priority List, with particular emphasis on:

• the submissions process and the methodology used to assess submissions;
• the overall conduct of the Audit process;
• the formulation of the Interim and Final Infrastructure Priority Lists; and
• the provision of advice and recommendations to the Government.

This audit report is expected to table in the Spring 2010 Parliamentary Sittings.

Audits of Regional Funding Programs

In May 2008, the Government announced that a Regional and Local Community Infrastructure program (now known as the Community Infrastructure program) would be funded in the 2009‑10 Federal Budget to deliver major investments in regional and local community, recreational and environmental infrastructure initiatives. In developing the program, the Government asked the House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government to examine ANAO Audit Report No.14 2007–08, Performance Audit of the Regional Partnerships Programme, and provide advice on new funding models. The Committee’s interim report, making 24 recommendations, was released in November 2008, and the final report in June 2009.

As part of the Government’s response to the global financial crisis, establishment of the program was brought forward and funding of $300 million was announced in November 2008. This comprised:

• one-off grants totalling $250 million allocated to all councils on a formula basis involving a one-off payment for additional ready-to-proceed projects and for additional stages of projects already underway
• a $50 million strategic projects component with applications for at least $2 million in federal funding for large strategic projects able to be lodged by councils by late
  December 2008 (a limit of one application per council or group of councils applied).

The strategic component was increased in January 2009 to $550 million.

In addition to the Community Infrastructure program, the Government developed the Better Regions program to help communities deal with the pressures on community infrastructure resulting from growth. The Better Regions program is intended to respond to the growth pressures being experienced by communities on the urban fringes, regional centres and in ‘tree change’ and ‘sea change’ areas. During the 2007 Federal Election campaign, the Labor Party announced more than 40 projects amounting to over $85 million. In the 2008–09 Federal Budget the Government announced that funding of $176 million over four years would be provided for the program.

Having regard to developments within the various regional programs that the department administers since the audit report on the Regional Partnerships program was tabled, ANAO has commenced separate audits of:

• the Community Infrastructure program: council allocation component;
• the Community Infrastructure program: strategic projects component; and
• the Better Regions program.

In broad terms, each audit is assessing whether the relevant program has been effectively designed and administrated. In addition, in relation to the strategic projects component, as the rapid injection of funds is intended to support local jobs, the audit methodology includes examination of advice provided to government, and development and implementation of program arrangements to support employment.

The report on the audit of the strategic projects component is expected to be tabled in the Spring 2010 Parliamentary Sittings. A separate report on each of the remaining two audits is expected to be tabled during 2010–11.

Administration of CASA’s Safety Management Systems Approach

Australia is a signatory to the Convention on International Civil Aviation, commonly referred to as the Chicago Convention, which sets out the agreed principles to maintain a safe and orderly international civil aviation environment. ICAO Standards place a responsibility for Chicago Convention-contracting states to have a State Safety Program (SSP) and for operators to implement a Safety Management System (SMS) that is acceptable to the state. In its September 2008 report on the administration of CASA and related matters, the Senate Rural and Regional Affairs and Transport Committee recommended that the ANAO audit CASA’s implementation and administration of its safety management systems approach. This audit is being conducted in response to that request.

The audit report is expected to be tabled in the Spring 2010 Parliamentary Sittings.

Management of the Aviation and Maritime Security Identification Regime

Aviation and Maritime Security Identification Cards (ASIC and MSIC) for airport and seaport workers form part of Australia’s effort to secure the transport sector against terrorism. All individuals who require unescorted access to a secure area of an airport, seaport or offshore facility are required to undertake a background check and display an ASIC or MSIC indicating that they have passed this check. Responsibility for the ASIC and MSIC regime is shared between the Department of Infrastructure, Transport, Regional Development and Local Government (DITRDLG) and the Attorney-General’s Department (AGD), although the actual issuing of cards is performed by over 200 separate issuing authorities, including both private and public sector bodies. There are around 125 000 ASICs and 137 000 MSICs in current circulation.

The objective of this audit is to assess the effectiveness of DITRDLG’s and AGD’s management of the ASIC and MSIC regime. The audit focus includes governance, reporting and funding arrangements, administration of the issuing of the cards, information systems and compliance activity.

The audit report is expected to be tabled in the Autumn 2011 Parliamentary Sittings.

Potential audits

Tasmanian Freight Equalisation Scheme

Producers located in Tasmania face the unique situation that in order to distribute their products to other states, they often need to rely on sea freight. In order to minimise sea freight costs and provide Tasmanian industries with equal opportunities to compete in mainland markets, the Tasmanian Freight Equalisation Scheme was introduced in July 1976 to assist producers through subsidising the costs of sea freight. The scheme operates under a set of directions issued by the Minister for Infrastructure, Transport, Regional Development and Local Government and is administered by Centrelink, through a Memorandum of Understanding with the Department of Infrastructure, Transport, Regional Development and Local Government. The scheme has been extended in recent years to also include King Island and the Furneaux Group of islands.

In 2008–09, 10 751 claims were received (an increase of 34.5 per cent from 2007–08), and
$109 million was paid under the scheme.

An audit would examine the effectiveness and administration of the Tasmanian Freight Equalisation Scheme.

Administration of Round 2 of the Strategic Projects Component of the Regional and Local Community Infrastructure Program

The Regional and Local Community Infrastructure Program (RLCIP) was established by the Government to stimulate growth and activity in Australia as part of the response to the global economic crisis. The first $550 million funding round for the Strategic Projects component of the RLCIP was conducted in 2008­09 and is currently the subject of an ANAO performance audit. At the Australian Council of Local Government meeting on 25 June 2009, the former Prime Minister announced additional funding of $120 million for the Strategic Projects component of the RLCIP, to be conducted through a competitive process. Applications closed in January 2010.

An audit would examine the conduct of the second funding round, noting that the first round was conducted prior to the Commonwealth Grant Guidelines (CGGs) being introduced, but the second round was conducted after significant enhancements were made to the grants administration framework (including the publication of the CGGs).

The Establishment, Implementation and Administration of the Jobs Fund

On 5 April 2009, the Government announced further stimulus initiatives as part of the Jobs and Training Compact, with the former Prime Minister stating that the Compact was with Australians affected by the global recession and was promising training, support and local initiatives to help them get back to work. The Jobs and Training Compact was to have three elements, the largest being a $650 million Jobs Fund to help support local jobs and training through community projects in regions hardest hit by the economic downturn.

Two audits of the Jobs Fund are planned. The first audit would relate to the establishment, implementation and administration of the Infrastructure Employment Projects stream. This stream has been announced as involving $150 million for the construction of local infrastructure that would create immediate jobs in communities affected by the global recession. It is administered by the Department of Infrastructure, Transport, Regional Development and Local Government. The Department of the Prime Minister and Cabinet also plays a role in the initiation of projects for funding through this stream of the Fund with the Department of the Treasury involved in the making of payments for approved projects. In addition, the published guidelines for the Infrastructure Employment Projects stream state that projects initiated by the Australian Government will be referred to a joint departmental committee.

The second audit would examine the establishment, implementation and administration of the Local Jobs stream of the Jobs Fund. Through the Local Jobs stream, $300 million was to be available for community infrastructure projects with a focus on the promotion of environment-friendly technology and heritage. Of the funding available under this stream, $60 million was specifically set aside for heritage-related projects and $40 million was for the construction of bike paths (with the $100 million in quarantined funding not to extend past 30 June 2010). This stream, including the two quarantined sub-streams, related to commitments made by the Government in negotiations with the Australian Greens in the context of securing passage of the legislation relating to the Nation Building and Jobs Plan.

The audit scope would include all elements of the Local Jobs stream, the administration of which involves the Department of Education, Employment and Workplace Relations in respect to the general components of the Local Jobs stream, the Department of Environment, Water, Heritage and the Arts in respect to the quarantined heritage component and the Department of Infrastructure, Transport, Regional Development and Local Government in respect to the quarantined bike path component.

 

Previous: Immigration and Citizenship

Next: Innovation, Industry, Science and Research