The intent of performance statements audits is to drive improvements in the transparency and quality of entities' performance reporting and, in turn, increase entities' accountability to the Parliament and public.

Annual performance statements audits

In August 2019, following the review of the Public Governance, Performance and Accountability Act 2013, the Minister for Finance requested that the Auditor-General conduct a pilot program of audits of annual performance statements in consultation with the Joint Committee of Public Accounts and Audit (JCPAA). The intent of performance statements audits is to drive improvements in the transparency and quality of entities' performance reporting and, in turn, increase entities' accountability to the Parliament and public.

Following the Auditor-General's agreement, the pilot was commenced under section 15 of the Auditor-General Act 1997, applying the performance statements auditing methodology developed over recent years to the 2019–20 performance statements (as presented in annual reports).

The pilot examined the performance statements of the Department of Veterans' Affairs (DVA), the Attorney-General's Department (AGD), and the Department of Social Services (DSS). Updates on the progress of the pilot were provided to the JCPAA progressively throughout the audit process and to the Audit Committee Chairs Forum in July 2020 and December 2020, sharing emerging findings and messages for the sector.

On 2 December 2020, the Auditor-General provided the Minister for Finance with two audit opinions. The ANAO withdrew from the 2019–20 DSS audit. This was due partly to delays in the provision of information as DSS prioritised resources to the government's COVID-19 response. The ANAO will examine DSS' revised performance measures for 2020–21 in 2021.

The Minister for Finance tabled the two audit opinions in Parliament on 3 February 2021. These are available on Finance's website: https://www.finance.gov.au/publications/reports.

Both DVA and AGD made improvements in response to the ANAO's interim findings, and as a result presented more transparent and meaningful performance reporting to the Parliament in their annual reports. Both departments' 2019–20 performance statements provide an example for the sector of the alignment of purposes with activities and results, and the reporting of these results based on targets and different types of performance measures. DVA's performance statements will be a particularly relevant example for agencies focused on service delivery; AGD's performance statements will be a relevant example for agencies focused on policy development and implementation. 

As part of the 2021–22 Budget, the ANAO received additional funding to deliver a staged program of performance statement audits — from three audits in 2021–22 increasing to 14 audits by 2024–25. Full implementation of mandatory auditing of entity performance statements would give the Parliament the same level of assurance over non-financial performance information that it currently receives for financial performance information. This should result in improvements in the quality of performance information provided to the Parliament.

Options to formalise arrangements for performance statements audits across all material entities are being developed following the 2021 Budget. In the meantime, to maintain the momentum and capability building from the 2019–20 pilot, the ANAO has commenced audits of the 2020–21 performance statements of DVA, AGD and DSS. These audits are being conducted as a continuation of the Finance Minister's request to conduct the pilot under section 40 of the PGPA Act, pursuant to section 15 of the Auditor-General Act 1997.

More information about the Auditor-General's mandate and functions under the Auditor-General Act 1997 is available on the ANAO website.