Prime Minister and Cabinet | Australian National Audit Office (ANAO)

Portfolio overview

The Prime Minister and Cabinet portfolio is responsible for: providing advice and support to the Prime Minister, the Cabinet, Portfolio Ministers and Assistant Ministers on matters that are at the forefront of public policy and government administration; and providing stewardship of the Australian Public Service (APS). The Department of the Prime Minister and Cabinet (PM&C) is the lead entity in the portfolio. It is responsible for supporting the Prime Minister as the head of the Australian Government and the Cabinet and providing advice on major domestic policy and international and national security matters. Further information is available from the department’s website.

In addition to PM&C, there are 19 entities within the portfolio that are responsible for: Australian Government Aboriginal and Torres Strait Islander policy, programs and service delivery; improving results for Aboriginal and Torres Strait Islander peoples through enhanced Indigenous economic rights to support economic independence; improved access to education, employment, health, wellbeing and other services, as well as the maintenance of cultural identity; coordination and evaluation of Australia’s foreign intelligence activities; Australian Government employment workplace relations policy to position the APS workforce for the future by improving people management and manage capability and professional development across the APS; support to the Governor-General to perform her official duties; and promoting and improving workplace gender equality in Australian workplaces. While located in the PM&C portfolio, the Auditor-General is an independent officer of the Parliament. The Governor-General appoints an independent auditor of the ANAO to conduct financial statements audits and performance audits of the ANAO. The Auditor-General engages the Independent Auditor to audit the performance statements of the ANAO.

In the 2026–27 Portfolio Budget Statements (PBS) for the Prime Minister and Cabinet portfolio, the aggregated budgeted expenses for 2026–27 total $4.5 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 National Indigenous Australians Agency represents the largest proportion of the portfolio’s expenses, and administered expenses of the portfolio are the most material component, representing 64 per cent of the entire portfolio’s expenses.

Figure 1: Prime Minister and Cabinet portfolio – total expenses and average staffing level by entity

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

Audit focus

In determining the 2026–27 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 or changes in the operating environment.

The ANAO had regard to the final report of the capability review of PM&C that was endorsed by the APS Commissioner in January 2026.

The primary risk identified by the ANAO for PM&C is its ability to strategically ‘lean in’ on interconnected whole-of-government challenges in an increasingly complex environment. The primary risk for the National Indigenous Australians Agency (NIAA) relates to how it is demonstrating the effective achievement of its purpose and responsibilities as set out in its Executive Order.

Specific risks in the Prime Minister and Cabinet portfolio relate to governance, service delivery, grants administration, policy development and regulation.

Governance

The 2026 capability review of PM&C identified risks associated with PM&C’s ability to respond dynamically to an increasingly complex environment in a way that engages holistically, across government, on interconnected challenges. The review identified risks associated with a lack of strategic workforce planning and recruitment, and high turnover in some business areas. At the same time, PM&C faces challenges in quantifying, communicating and demonstrating the benefits and impact of its work ‘to support the Prime Minister, the Cabinet, and portfolio ministers to improve the lives of all Australians.’ Among PM&C’s roles is enabling a well-functioning Cabinet and providing advice to the Prime Minister, the Cabinet and ministers. As holders of sensitive Cabinet information and administrators of multiple government information and communications technology systems across government serving tens of thousands of users, PM&C needs to ensure it has appropriate arrangements for information management and security.

The APSC has a lead role in developing the integrity, capacity and capability of the APS. Three APS reform priorities (bolstering integrity through legislative amendments and non-legislative initiatives; building an outwardly-engaged APS; and strengthening capability) are supported by 15 initiatives. A risk is APSC’s ability to provide assurance that APS reforms, including through initiatives such as the Strategic Commissioning Framework , are being implemented effectively and efficiently in accordance with reform priorities.

The portfolio includes 13 entities that have been established to serve the interests of Aboriginal and Torres Strait Islander peoples. Audits have highlighted governance issues in relation to legislative breaches, managing conflicts of interest, procurement and record keeping.

The department and portfolio agencies have an important responsibility in explaining and modelling the APS Values, including the value of ‘stewardship’ that was introduced in 2024. A key risk for the NIAA is its effective stewardship of the APS in achieving genuine partnership with First Nations. Recent audits have shown mixed results in how the APS is working in partnership and delivering on the priority reforms under the National Agreement on Closing the Gap.

Service delivery

The NIAA’s responsibilities include leading Commonwealth policy development, program design, program implementation and service delivery for Aboriginal and Torres Strait Islander peoples. The NIAA is directly responsible for delivering on government commitments in relation to remote employment, food security, housing and security in the central Australia region. The NIAA faces challenges in balancing ongoing service delivery with program design and redesign. There are risks associated with how the NIAA is leaning in to work with other Australian Government agencies, and state and territory governments, to deliver on government commitments.

The Executive Order to establish the NIAA states that it will lead and coordinate the development and implementation of targets established in the National Agreement on Closing the Gap. The Productivity Commission’s Closing the Gap Dashboard shows that of 17 socio-economic outcome targets, three were on track, five were improving but not on track, six were worsening or unchanged from the baseline and there was insufficient data to assess three. These results and recent ANAO audits highlight risks for the NIAA in coordinating the implementation of Closing the Gap targets across government at a pace that meets community expectations, while maintaining appropriate transparency over Australian Government progress.

The NIAA’s responsibilities include analysing and monitoring the effectiveness of programs and services for Aboriginal and Torres Strait Islander peoples, including programs and services delivered by bodies other than the NIAA. Responding to public and parliamentary interest in the effectiveness and efficiency of expenditure on First Nations programs is a key risk for the NIAA. Audits have shown that the NIAA’s measurement and accountability frameworks for program performance require improvement.

Grants administration

The NIAA and other entities in the portfolio such as Aboriginal Investment NT are responsible for the effective, efficient and ethical administration of grants programs, including thousands of individual grant agreements such as those established under the Indigenous Advancement Strategy. There are risks associated with the decentralised nature of processing and monitoring Indigenous Advancement Strategy grant programs across Australia. In 2026–27, the NIAA faces the additional challenge of replacing the grant opportunity guidelines that have enabled the NIAA to issue grants, which were due to expire in December 2025 and extended in late 2025 to December 2026.

Policy development

PM&C’s focus is on supporting the Prime Minister, Cabinet and portfolio ministers to achieve their policy priorities. There are risks associated with ensuring that advice and major policy decisions are supported by sound evidence and analysis beyond the electoral cycle. Focus area 2 of PM&C’s action plan in response to the 2026 capability review is ‘delivering through collaboration’ as the Australian Government’s ‘leading convenor’. The action plan recognises that effective delivery requires working in partnership with stakeholders across the Australian Government, states and territories and community. There are risks associated with advice that is not informed by government and community perspectives due to ineffective stakeholder engagement and coordination.

The NIAA is responsible for leading and coordinating Commonwealth policy development and program design for Aboriginal and Torres Strait Islander people. Audits have highlighted risks related to the NIAA’s coordination, implementation and monitoring of government policy; and provision of timely, proactive and evidence-based policy advice.

Regulation

Although the NIAA primarily functions as a policy, advisory and program-delivery body, statutory office holders for which it is accountable have regulatory functions. This includes the Registrar of Aboriginal and Torres Strait Islander Corporations and Aboriginal Land Commissioner. The NIAA is also the regulator and policy lead for the newly implemented Low-Cost Essentials Subsidy Scheme. Regulators face unique risks associated with effective stakeholder consultation; regulatory capture; maintaining robust investigative practices; transparency over performance; and managing burden and supporting sector sustainability.

Previous performance audit coverage

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 to 2025–26, entities within the Prime Minister and Cabinet portfolio were included in tabled ANAO performance audits 24 times. The conclusions directed toward entities within this portfolio were as follows:

none were unqualified;
10 were qualified (largely positive);
14 were qualified (partly positive); and
none were adverse.

Figure 2 shows the number of audit conclusions for entities within the Prime Minister and Cabinet 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 and 2025–26: entities within the Prime Minister and Cabinet 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 Prime Minister and Cabinet portfolio.

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

Source: ANAO data.

Performance statements audits

There are two performance statements audits within the Prime Minister and Cabinet Portfolio. The audits of the 2025–26 PM&C and the NIAA annual performance statements are being conducted following a request from the Minister for Finance dated 29 September 2025, under section 40 of the Public Governance, Performance and Accountability Act 2013. The audits are conducted under section 15 of the Auditor-General Act 1997. This is the second year both entities have been included in the performance statements audit program.

Department of the Prime Minister and Cabinet

During the planning phase of the audit, the ANAO considered the risk associated with PM&C’s performance statements audit as moderate. The key risks identified include:

the absence of a complete enterprise-wide performance framework through which PM&C plans, monitors and reports its performance;
the completeness of PM&C’s key activities, performance measures and targets;
the appropriateness of PM&C’s performance measures and targets against the requirements of the Public Governance, Performance and Accountability Rule 2014; and
performance statements preparation processes.

National Indigenous Australians Agency

The ANAO considers the risk associated with NIAA’s performance statements audit as moderate. This rating has been determined based on complexity in the NIAA environment, including the extent of collaboration with other entities to coordinate and deliver against Closing the Gap and transition of key programs.

Four key risks have been highlighted relevant to the 2025-26 performance statements as areas for specific focus. These are summarised below.

Appropriateness of Performance Measures – NIAA includes a significant number of output measures within the corporate plan, with limited reporting on the outcomes and effectiveness of its work. There is an opportunity for the NIAA to clarify the connection between each of measures and the overarching purpose and key activities.
Completeness of Performance Measures – Multiple NIAA functions were not reflected within the 2024-25 performance information. There is an opportunity for the NIAA to strengthen its assessment of functions, including through consideration of areas of government priority and public interest. This may enable NIAA to better demonstrate how the performance information provides complete reporting of significant functions.
Preparation of performance statements – The absence of robust frameworks and timeframes to support preparation of the performance information increases the risk of material misstatement within the results. This may result from inadequate time to complete quality assurance processes, insufficient detail within methodology documents to support measurement and inability to undertaken repeatable completeness assessments.
Completeness and clear read of Purposes and key activities – It is important that the NIAA’s purpose and key activities are constructed and presented in a manner which enables a reader to understand the extent of its functions and role. This should highlight, but not be limited to, the NIAA’s role leading and coordinating Closing the Gap, and its use of partnerships to empower Indigenous Australians and support achievement of outcomes.

Financial statements audits

Overview

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

Table 1: Prime Minister and Cabinet portfolio entities and risk profile

	Type of entity	Engagement risk	Number of higher risks	Number of moderate risks
Material entities
Department of the Prime Minister and Cabinet	Non-corporate	Low	0	1
Indigenous Business Australia	Corporate	Moderate	0	3
National Indigenous Australians Agency	Non-corporate	Moderate	0	4
Non-material entities
Aboriginal Hostels Limited	Company	Moderate
Anindilyakwa Land Council	Corporate	Moderate
Australian Institute of Aboriginal and Torres Strait Islander Studies	Corporate	Low
Australian Public Service Commission	Non-corporate	Low
Central Land Council	Corporate	Low
Indigenous Land and Sea Corporation	Corporate	Moderate
National Australia Day Council Limited	Company	Low
Northern Land Council	Corporate	Moderate
Northern Territory Aboriginal Investment Corporation	Corporate	Low
Office of the Official Secretary to the Governor-General	Non-corporate	Low
Office of National Intelligence	Non-corporate	Low
Outback Stores Pty Ltd	Company	Low
Tiwi Land Council	Corporate	Moderate
Torres Strait Regional Authority	Corporate	Low
Workplace Gender Equality Agency	Non-corporate	Low
Wreck Bay Aboriginal Community Council	Corporate	Moderate
Other audit engagements (including Auditor-General Act 1997 section 20 engagements)
Aboriginals Benefit Account

Material entities

Department of the Prime Minister and Cabinet

PM&C is responsible for providing advice to the Prime Minister, the Cabinet, portfolio ministers, and assistant ministers to improve the lives of all Australians. The role of PM&C is to support the policy agenda of the prime minister and Cabinet and the coordination of the implementation of key government programs, to provide leadership to the Australian Public Service, coordination of government activities, effective policy advice and development, and program delivery.

PM&C’s total budgeted assets for 2026–27 are $4.5 billion, with other investments representing 92 per cent, as shown in Figure 4.

Figure 4: Department of the Prime Minister and Cabinet’s total budgeted financial statements by category ($’000)

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

There is one key risk for PM&C’s 2025–26 financial statements that the ANAO has highlighted for specific audit coverage.

Valuation of administered investments, as PM&C estimates the fair value of a number of corporate Commonwealth entities and companies in the Prime Minister and Cabinet portfolio including Indigenous Business Australia and the Indigenous Land and Sea Corporation.

Indigenous Business Australia

Under its enabling legislation, the Aboriginal and Torres Strait Islander Act 2005, Indigenous Business Australia’s (IBA) purposes are to assist and enhance Aboriginal and Torres Strait Islander self-management and economic self-sufficiency, and to advance the commercial and economic interests of Aboriginal and Torres Strait Islander peoples by accumulating and using a substantial capital base for their benefit. IBA has 12 actively trading subsidiaries which are audited by the ANAO.

IBA’s total budgeted assets for 2026–27 are $2.5 billion. Of this, 61 per cent is attributable to trade and other receivables, 25 per cent is attributable to other investments and six per cent is attributable to investment property, as shown in Figure 5.

Figure 5: Indigenous Business Australia’s budgeted financial statements by category ($’000)

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

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

The valuation of the loan portfolio, including fair value assessment and amortised cost, which requires the use of judgement and estimates.
The valuation of expected credit losses relating to the loan portfolio, which requires the use of judgement and estimates.
The valuation of investment properties, land and buildings, and investments in associate entities, due to the judgements and assumptions involved in these valuations.

National Indigenous Australians Agency

NIAA is responsible for policy oversight in relation to the Indigenous agencies in the Prime Minister and Cabinet portfolio.

The NIAA’s total budgeted expenses for 2026–27 are $3.0 billion, with 72 per cent of these expenses attributable to grants, as shown in Figure 6. Land and Buildings and Property, plant and equipment contribute to thirteen per cent of total budgeted assets.

Figure 6: National Indigenous Australians Agency budgeted financial statements by category ($’000)

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

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

The NIAA manages approximately $2.1 billion in administered grants expenses each year across geographically dispersed locations, including remote areas, and payments are made through different IT systems operated across a number of government departments.
The implementation of the Remote Australia Employment Service due to the significant program changes, system updates and the need for robust compliance and governance during implementation.
The NIAA has entered into shared services arrangements with several government departments for: financial transaction processing, including payroll and ICT infrastructure services. The NIAA remains responsible for oversight of the shared services and obtaining appropriate assurance from the service providers.
The NIAA has substantial holdings of land, buildings, infrastructure and plant and equipment, which are dispersed around Australia and are required to be valued at fair value under the Financial Reporting Rule.