In determining the 2021–22 audit work program, the ANAO considers prior-year audit and other review findings and what these indicate about portfolio risks and areas for improvement. The ANAO also considers emerging risks from new investments, reforms or changes in the operating environment.

In the Attorney-General’s portfolio, risk considerations are predominantly related to the efficient and effective delivery of legislative, judicial and investigatory services. The portfolio also faces effectiveness and compliance risks for its whole-of-government regulatory frameworks and its administration of grants.

Specific risks in the Attorney-General’s portfolio relate to service delivery, grants administration, regulation and financial management.

Service delivery

The department’s implementation and administration of business-as-usual processes is being impacted by the need to manage a number of royal commissions, the development of a new Commonwealth integrity commission and anticipated demand on the Fair Entitlements Guarantee scheme. Clarity and coherence in AGD’s governance arrangements and resource allocations are critical in managing related risks.

Audit work in portfolio entities has highlighted issues in measuring the efficiency of service and function delivery, and risks related to case management and exercising investigatory functions. 

Grants administration

Recent audits in the portfolio have found that the department’s management of grant programs in areas such as telecommunications data retention  and living safely together  has not been to an appropriate standard, considering the risks involved in compliance, value for money and the desired policy outcomes.

The department also uses grant hubs for administering a number of grant programs. Outsourcing the management of grant programs to service providers does not reduce accountability. The department needs to obtain assurance from these service providers that the grants have been processed accurately, completely and in line with the department’s requirements.

Regulation

The portfolio has carriage of a number of whole-of-government integrity and security frameworks, including the Protective Security Policy Framework, cyber resilience,  the Lobbying Code of Conduct and lobbyist register,  fraud,  freedom of information  and privacy.

Audit work in these areas has highlighted that, while policy frameworks have been established, compliance across entities has not been strong, particularly in relation to cyber resilience, which raises questions about the effectiveness of policy implementation.

Financial management

Comcare and the Coal Mining Industry (Long Service Leave Funding) Corporation, respectively, estimate the liabilities for workers compensation reported by participating portfolio entities, and the reimbursements to participating employers. The estimation of these liabilities is complex due to the significant level of judgement needed in selecting appropriate underlying assumptions. This raises risks regarding transparency, consistency and appropriateness of the valuations.

Attorney-General’s Department

The Attorney-General’s Department supports the Attorney-General and Minister for Industrial Relations as well as the Assistant Minister to the Attorney-General. The roles of the department are to contribute towards a just and secure society by maintaining and improving Australia’s law, justice, security and integrity frameworks, and to facilitate jobs growth through policies and programs that promote fair, productive and safe workplaces.

The department’s total budgeted expenses for 2021–22 are $1.41 billion, with 31 per cent of these expenses attributable to payments to corporate Commonwealth entities, subsidies and personal benefits, as shown in Figure 2.

Figure 2: Attorney-General’s Department’s total budgeted expenses by category ($’000)

Source: ANAO analysis of 2021–22 PBS.

Financial statements

There are two key risks for AGD’s 2020–21 financial statements that the ANAO has highlighted for specific audit coverage.

• The management of the Fair Entitlements Guarantee scheme, which protects certain unpaid employment entitlements for employees who have lost their jobs due to the liquidation or bankruptcy of their employer. The scheme is a material activity for AGD with an expected increase in activity due to COVID-19 and with complexity in the eligibility and payment amounts.
• The completeness and accuracy of revenue and related balances from rendering of legal services, which is material to AGD’s financial statements and subject to judgements on revenue recognition.

Performance statements audit

The ANAO will audit AGD’s 2020–21 annual performance statements as a continuation of the Minister for Finance’s August 2019 request under section 40 of the Public Governance, Performance and Accountability Act 2013 to conduct a pilot audit. The audit will be conducted under section 15 of the Auditor-General Act 1997.

The ANAO has highlighted two key risks for AGD’s performance statements:

• completeness and accuracy of the results in the performance statements, particularly where reporting is reliant on case studies or internal analysis; and
• timeliness and accuracy of evidence to support results for the significantly revised performance measures that were published in AGD’s 2020–21 corporate plan.

High Court of Australia

The High Court of Australia is responsible for interpreting and applying the law of Australia; deciding on cases of special federal significance, including challenges to the constitutional validity of laws; and hearing appeals, by special leave, from federal, state and territory courts.

The High Court’s total budgeted expenses for 2021–22 are just under $28 million, with 73 per cent of these expenses attributable to employee benefits and supplier expenses, as shown in Figure 3.

Figure 3: High Court of Australia’s total budgeted expenses by category ($’000)

Source: ANAO analysis of 2021–22 PBS.

The key risk for the High Court’s 2020–21 financial statements is the accuracy of the fair value attributed to land and buildings, as these are special-purpose assets with a number of unique features.

National Archives of Australia

The National Archives of Australia is an Australian Government entity established under the Archives Act 1983. It sets information and data management policy and standards for Australian Government entities to meet in creating, retaining, maintaining, securing, preserving, appropriately disposing of, and providing appropriate access to trusted government information and data. The National Archives collects records of government decisions and actions.

The National Archives’ total budgeted expenses for 2021–22 are just over $90 million, with employee expenses representing 39 per cent of the total budgeted expenses, as shown in Figure 4.

Figure 4: National Archives of Australia’s total budgeted expenses by category ($’000)

Source: ANAO analysis of 2021–22 PBS.

The two key risks for the National Archives’ 2020–21 financial statements are the valuation of the national archival collection, due to its complex and unique nature, and the accounting for leases, given their long-term nature and the judgements required.

Coal Mining Industry (Long Service Leave Funding) Corporation

The Coal Mining Industry (Long Service Leave Funding) Corporation (Coal LSL) collects levies from employers to fund long service leave payments made to employees in the Australian black coal mining industry. The levies collected are invested until the employee takes long service leave, at which point the employer makes a payment to the employee and seeks reimbursement from Coal LSL in accordance with legislative arrangements.

Coal LSL’s total actual expenses for 2019–20 were $339.54 million, with 94 per cent of these expenses attributable to increases in provision for reimbursements, as shown in Figure 5.

Figure 5: Coal LSL’s total actual expenses by category ($’000)

Source: ANAO analysis of Coal LSL’s 2019–20 annual report.

There are two key risks for Coal LSL’s 2020–21 financial statements.

• The complex valuation processes used to determine the fair values attributed to unlisted trust investments.
• The significant judgement required by management to estimate the value of the liability for reimbursement of employers’ long service leave obligations, due to a range of assumptions relied on to underpin the valuation methodology and estimation process.

Comcare

Comcare is the Commonwealth’s work health and safety regulator, whose stated purpose is to ‘promote and enable safe and healthy work’. It also administers the Commonwealth’s workers compensation scheme and acts as an insurer and claims manager. Comcare’s enabling role is focused on supporting engagement and better practice approaches to health and safety across its scheme.

Comcare’s total budgeted expenses for 2021–22 are $199.15 million, 38 per cent of which relates to claim payments, as shown in Figure 6.

Figure 6: Comcare’s total budgeted expenses by category ($’000)

Source: ANAO analysis of 2021–22 PBS.

There are two key risks for Comcare’s 2020–21 financial statements.

• The judgements required in selecting assumptions when calculating workers compensation and asbestos-related disease claim provisions and related expense accounts.
• The timing of revenue recognition relating to the collection of workers compensation and common law asbestos premiums, which involves complex calculations prescribed in legislation.