Finance portfolio

The Finance portfolio is responsible for a range of finance-related functions, including providing the Australian Government with budget policy advice and process, government financial accountability, governance and financial management frameworks and policy guidelines, data and digital policy and services, insurance and risk management services, the Australian Government Investment Funds policy, superannuation arrangements for government employees, ministerial and parliamentary services, electoral matters and Australian Government asset management services.

The Department of Finance is the lead entity in the portfolio and is responsible for supporting the government’s budget process and the development and implementation of the government’s regulatory frameworks for public sector resource management, governance and accountability. The department is also responsible for the preparation of the consolidated financial statements of the Australian Government, which includes the whole-of-government and the general government sector financial statements and the Australian Government’s financial outcome. The department provides enabling services to the Commonwealth, including government technology services and shared services through the Service Delivery Office. Further information is available from the department’s website.

On 26 June 2025, amendments were made to Administrative Arrangement Order (AAO) dated 13 May 2025, impacting areas of responsibility in the Finance portfolio.   On 1 July 2025, the responsibilities for Services Australia moved from the Social Services portfolio to the Finance portfolio. Audit considerations for the portfolio entity Services Australia are discussed separately in the Services Australia overview.

In addition to the Department of Finance and Services Australia, there are nine entities (excluding subsidiaries)   within the portfolio that are responsible for: electoral administration; supporting retirement and insurance benefits for members of Commonwealth superannuation schemes; digital transformation; managing the investment activities of the Future Fund and other funds; auditing and reporting of parliamentarians’ work expenses; supporting people affected by serious incidents or misconduct in the parliamentary workplace; and supporting Australia’s naval defence capability.

In the 2026–27 PBS for the Finance portfolio — excluding Services Australia, the aggregated budgeted expenses for 2026–27 total $15.5 billion. The PBS contain budgets for those entities in the general government sector (GGS) that receive appropriations   directly or indirectly through annual appropriation Acts.

The level of budgeted departmental   and administered   expenses, and the average staffing level for entities in the GGS within this portfolio are shown in Figure 1. The Department of Finance represents the largest proportion of the portfolio’s expenses, and administered expenses of the portfolio are the most material component, representing 87 per cent of the entire portfolio’s expenses.

Figure 1: Finance portfolio – total expenses and average staffing level by entity

Source: ANAO analysis of 2026–27 Portfolio Budget Statements.

In determining the 2026–27 annual audit work program (AAWP), the Australian National Audit Office (ANAO) considers prior-year audit and other review findings and what these indicate about portfolio risks and areas for improvement. This also includes consideration from emerging risks from new investments or changes in the operating environment.

The primary risks identified for the Finance portfolio relate to stewardship of whole-of-government frameworks and policy development to achieve intended outcomes.   This includes how effectively finance law is applied under devolved arrangements, with a particular focus on maintaining policy frameworks that ensure public resources are used efficiently, effectively, economically and ethically. The portfolio also has responsibility for governing expenditure data, public sector digital transformation, and the delivery of major capital investments such as the National Security Office Precinct.

In addition, other specific risks relate to governance, resource management, service delivery, and financing government policies.

Governance

The sustainability reporting regimes are in place, including the. Corporations Act 2001 corporate climate-related financial disclosures (CCFD) (Treasury-led) and Commonwealth climate disclosures (CCD) under the EPBC Act (Finance-led) . Entities need to assess their readiness to support accurate, timely reporting and audit. There is a risk that entities may not be sufficiently prepared to produce accurate, complete sustainability disclosures resulting in potential non-compliance or reporting errors. For example, the ASC Pty Ltd voluntarily prepared a sustainability report for the first time in its 2024–25 Annual Report and will be required to prepare this information in accordance with the relevant frameworks from 2025–26. 

Effective management of legal governance requires systems that enable early identification and reporting of significant legal risks, supporting sound accounting and external reporting processes. This includes relevant appropriations and payments to members of the Parliament and their staff.

Service delivery

Effective service delivery requires strong governance arrangements, clear risk management processes, accurate advice and adherence to established processes. 

Finance provides enabling services to the Commonwealth, including government technology and shared services. Ineffective delivery could undermine value for money and service outcomes across the Australian Government.

Finance’s role in delivering major non-defence property projects, including procurement and development activities for the National Security Office Precinct, carries risks relating to procurement integrity, cost and schedule control, stakeholder coordination, and the effectiveness of assurance over major capital projects.

Policy development and stewardship

Finance manages approximately 74 frameworks. Effective stewardship of these frameworks is integral in improving the performance of the Australian Public Service; by ensuring they remain contemporary, effective and aligned with policy intent, and support the ethical and efficient use of public resources. 

Key risks relate to ineffective oversight across multiple frameworks, including budgeting, procurement, grants administration , risk management and digital policy and platforms.   Additional risks arise from maintaining capability in a rapidly changing economic, geopolitical and technological environment, and from the growing complexity of digital, data and AI-enabled systems. 

Strong stewardship requires proactive monitoring of compliance, effective cross-government coordination and the provision of resource management guides to support officials in complying with their responsibilities. 

As a framework policy owner and steward, Finance regularly receives recommendations from parliamentary committees and external audits. Central agencies can drive improved public sector performance by modelling better practice in their own administration of frameworks.

Resource management frameworks

There are strategic risks associated with the department’s responsibilities that may affect the integrity and performance of public resource management. Key risks include sustaining trust and transparency, ensuring the workforce has the capability required to support digital transformation (such as the GovAI platform launched on 31 July 2025), and maintaining agility in the context of economic and geopolitical uncertainty.

Additional risks relate to cross entity (portfolio level and across whole-of-government) collaboration, cyber security and data governance, the safe adoption of `emerging technologies, and climate related impacts on Commonwealth assets and financial exposures.

Financing government policies

The ANAO has identified risks to entities’ financial sustainability if future spending commitments are not effectively managed. While Finance has improved access to financial information through consolidated reporting tools, performance targets and benchmarks for financial sustainability have not been established. The ANAO has noted the benefits of developing such benchmarks to support comparability and informed decision-making. 

Budget reporting provides limited visibility over the increasing use of alternative financing arrangements, such as equity, loans and guarantees.   These arrangements can impose substantial revaluation related costs on the Commonwealth balance sheet, reducing the ability of Parliament and the public to assess the full fiscal costs and risks of such policies and or their performance over time. Improving transparency is increasingly important to maintain fiscal accountability, support informed policy choices, and enable effective scrutiny as reliance on alternative financing grows.

The ANAO’s performance audit activities involve the independent and objective assessment of all or part of an entity’s operations and administrative support systems. Performance audits may involve multiple entities and examine common aspects of administration or the joint administration of a program or service.

During the performance audit process, the ANAO gathers and analyses the evidence necessary to draw a conclusion on the audit objective. Audit conclusions can be grouped into four categories:

• unqualified;
• qualified (largely positive);
• qualified (partly positive; and
• adverse.

In the period between 2021–22 and 2025–26 entities within the Finance   portfolio were included in tabled ANAO performance audits 17 times.   The conclusions directed toward entities within this portfolio were as follows:

• three were unqualified;
• five were qualified (largely positive);
• three were qualified (partly positive); and
• six were adverse.

Figure 2 shows the number of audit conclusions for entities within the Finance portfolio that were included in ANAO performance audits between 2021–22 and 2025–26 compared with all audits tabled in this period.

Figure 2: Audit conclusions 2021–22 to 2025–26: entities within the Finance portfolio compared with all audits tabled

Source: ANAO data.

The ANAO’s annual audit work program is intended to deliver a mix of performance audits across seven audit activities: governance; service delivery; grants administration; procurement; policy development; regulation and asset management and sustainment. These activities are intended to cover the scope of activities undertaken by the public sector. Each performance audit considers a primary audit activity. Figure 3 shows audit conclusions by primary audit activity for audits involving entities in the Finance portfolio.

Figure 3: Audit conclusions by activity for audits involving entities within the Finance portfolio, 2021–22 to 2025–26

Source: ANAO data.

Overview

Entities within the Finance portfolio , and the risk profile of each entity, are shown in Table 1.

Table 1: Finance portfolio entities and risk profile

Department of Finance

The Department of Finance is responsible for supporting the government’s budget process and oversight of public sector resource management, and for governance and accountability frameworks. In addition, the Department of Finance is responsible for the production of the Australian Government’s consolidated financial statements. The department provides enabling services to the Commonwealth, including government technology services and shared services through the Service Delivery Office.

The Department of Finance’s total budgeted liabilities for 2026–27 are $183.1 billion, with superannuation liabilities representing 96 per cent, and outstanding insurance claims representing one per cent as shown in Figure 4. Investments represent 84 per cent of total budgeted assets, while employee benefits represent six per cent of total budgeted expenses.

Figure 4: Department of Finance’s total budgeted financial statements by category ($’000)

Source: ANAO analysis of 2026–27 Portfolio Budget Statements.

There are five key risks for the Department of Finance’s 2025–26 financial statements that the ANAO has highlighted for specific audit coverage, including four risks that the ANAO considers potential key audit matters (KAMs).

• The complex assumptions and calculations underpinning the actuarial assessment of the public sector superannuation liability. (KAM – Valuation of superannuation provisions)
• The estimation of the outstanding claims liability for the Australian Government’s self-managed general insurance fund, due to the complex calculation of the liability that involves assumptions requiring significant judgement. (KAM – Valuation of, and accounting for, outstanding insurance claims)
• The valuation of the property portfolio, which consists of a large number of properties with unique characteristics. The process is complex and involves the use of different valuation methods that require significant judgement on the selection of assumptions within the valuation models. (KAM – Valuation of properties)
• The valuation of private market investments, due to the inherent subjectivity and significant judgements and estimates required where market data is not available to determine the fair value of these investments. (KAM – Valuation of private market investments)
• The accuracy of employee expenses and valuation of provisions relating to members of Parliament and their staff.

ASC Pty Ltd

ASC Pty Ltd (ASC) is a proprietary company limited by shares registered under the Corporations Act 2001. The Minister for Finance is the sole shareholder Minister on behalf of the Commonwealth of Australia.

ASC and its subsidiaries – including ASC AWD Shipbuilder Pty Ltd and ASC OPV   Shipbuilder Pty Ltd – support Australia’s naval capabilities. ASC was the builder of Australia’s fleet of Collins class submarines for the Royal Australian Navy. ASC is responsible for the ongoing design enhancement, maintenance, and support of Australia’s fleet of Collins class submarines.

On 22 March 2024, the government announced ASC Pty Ltd had been selected for the sustainment of nuclear-powered submarines as well as ASC Pty Ltd and BAE Systems to build Australia’s SSN-AUKUS submarines though an incorporated joint venture arrangement within Australia.

As part of the incorporated joint venture, ASC Pty Ltd and BAE Systems will be accountable and responsible for the delivery of SSN-AUKUS submarines, as well as ensuring safety, security, and regulatory compliance throughout the build program.

ASC’s total actual revenue for 2024–25 was just under $977.0 million, with the majority attributable to revenue from contracts with customers, as shown in Figure 5.

Figure 5: ASC Pty Ltd actual financial statements by category ($’000)

Source: ANAO analysis of ASC Pty Ltd’s 2024–25 Annual Report.

There are two risks for the ASC Pty Ltd 2025-26 financial statements that the ANAO has highlighted for specific audit coverage.

• Revenue recognition for accounting of In-Service Support Contract (ISSC) is a high risk. This is primarily due to the magnitude of the revenue which is derived by a model which involves significant assumptions and data to estimate revenue.
• Revenue recognition for accounting for Sovereign Shipbuilding Talent Pool (SSTP), Life of Type Extension (LoTE), SSN Sustainment and the AUKUS Build Mobilisation programs are recognised as a moderate risk. This is primarily due to the magnitude of the programs, complexity of judgements and estimates used.

Australian Naval Infrastructure Pty Ltd

Australian Naval Infrastructure Pty Ltd (ANI) is responsible for supporting the Commonwealth’s continuous naval shipbuilding and sustainment program by being the owner, developer and manager of infrastructure and related facilities. ANI is also tasked with developing a nuclear-powered submarine construction yard for the construction of Australia’s nuclear-powered submarines.

The infrastructure held by ANI at Osborne in South Australia is used by BAE Systems Maritime Australia for the Hunter Class Frigate program and Destroyer Capability Enhancement (DCE) program, and ASC Pty Ltd (ASC) for maintenance of the Collins class submarines under contract arrangements with the Commonwealth, represented by the Department of Defence.

ANI is a proprietary company limited by shares registered under the Corporations Act 2001. The Commonwealth, represented jointly by the Minister for Finance and Minister for Defence as Shareholder Ministers, wholly own all of ANI’s share capital.

ANI’s total assets for 2024–25 were just over $2.2 billion, with 97 per cent attributable to property, plant and equipment, as shown in Figure 6. Total revenue (includes other income, net revaluation increase and net impairment reversal) is just under $67.3 million, with 80 per cent attributable to lease income.

Figure 6: Australian Naval Infrastructure Pty Ltd actual financial statements by category ($’000)

Source: ANAO analysis of the Australian Naval Infrastructure Pty Ltd’s 2024–25 Annual Report.

There are three key risks for ANI’s 2025–26 financial statements that the ANAO has highlighted for specific audit coverage.

• The valuation of property, plant and equipment due to the value and complexity of assets held by ANI. This includes judgements undertaken by ANI to assess asset remaining useful lives.
• The recognition of capital works in progress due to the high level of activity in relation to the construction of the nuclear-powered submarine yard. Significant management oversight over capital work in progress is required to ensure assets are appropriately capitalised or impaired.
• The accounting for, and reporting of, ANI’s revenue from properties which includes a number of revenue streams, the volume and complexity of transactions, and the impact of the application of Australian accounting standard AASB 15 Revenue from Contracts with Customers on revenue recognition, measurement and disclosure.

CEA Technologies Pty Limited

CEA Technologies Pty Limited (CEA) designs, develops, manufactures and sustains advanced active electronically scanned array radar systems. The company’s technology is used by the Australian Defence Force and the United States Department of Defense.

CEA’s total assets for 2024–25 were just under $606.8 million, with 33 per cent attributable to property, plant and equipment and 21 per cent to trade and other receivables, as shown in Figure 6. Total revenue is just over $354.4 million, with 98 per cent attributable to revenue from contracts with customers.

Figure 7: CEA Technologies Pty Ltd actual financial statements by category ($’000)

Chart 2 for CEA Technologies Pty Limited

Source: ANAO analysis of CEA Technologies Pty Ltd’s 2024–25 Annual Report.

There is one key risk for CEA Technologies’ 2025–26 financial report that the ANAO has highlighted for specific audit coverage.

• Revenue recognition across multiple types of commercial contracts with variable and complex requirements under AASB 15 Revenue from Contracts with Customers.

Future Fund Management Agency

The Future Fund Board of Guardians, supported by the Future Fund Management Agency (together the Future Fund), is responsible for investing the assets of the Future Fund under the Future Fund Act 2006, and other investment funds, managed on behalf of the Department of Finance. The investment of the other funds is managed under the DisabilityCare Australia Fund Act 2013; the Medical Research Future Fund Act 2015; the Aboriginal and Torres Strait Islander Land and Sea Future Fund Act 2018; the Future Drought Fund Act 2019; the Disaster Ready Fund Act 2019; and the Housing Australia Future Fund Act 2023 as a means to provide financing sources for substantial future investments in the Australian economy.

The Future Fund’s total budgeted assets for 2026–27 are $296.7 billion with almost all of these assets attributable to other investments, as shown in Figure 7.

Figure 8: Future Fund Management Agency’s total budgeted financial statements by category ($’000)

Source: ANAO analysis of 2026–27 Portfolio Budget Statements.

There are three key risks for the Future Fund 2025–26 financial statements that the ANAO has highlighted for specific audit coverage, including one risk that the ANAO considers to be a potential key audit matter (KAM).

• The valuation of private market investments, due to the inherent subjectivity and significant judgements and estimates required where market data is not available to determine the fair value of these investments. (KAM – Valuation of collective investment vehicles held at fair value through profit or loss)
• The valuation of public market investments undertaken by the custodian of the Future Fund, due to the size of the investments.
• The financial statements close process, which requires the collation of data from multiple sources and is reliant on manual processes undertaken to ensure completeness and accuracy of underlying workpapers and the resulting disclosures.