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Review of ANAO better practice guides
The purpose of the Australian National Audit Office is to support accountability and transparency in the Australian Government sector through independent reporting to the Parliament, and thereby contribute to improved public sector performance.
The ANAO adopts a range of communication practices to strengthen the impact of its work and facilitate the sharing of audit insights. Communication practices had included the publication of better practice guides on aspects of Commonwealth administration, for the information of Australian Government entities.
The independent Review of Whole-of-Government Internal Regulation recommended that the ANAO take the opportunity to review whether there is a continuing need to develop and maintain separate guidance, where regulators and policy owners have developed or are developing policy guidance material. The ANAO consulted the Australian Parliament and public sector entities, including audit committees within these entities, about the future of better practice guides. The feedback received was that where another entity has produced, or will produce, a similar resource and has committed to continue to do so, the ANAO could add more value by monitoring the effectiveness of this resource. On this basis, the ANAO decided to discontinue and cease distribution of a range of better practice guides from 1 July 2017. Refer to our previously published message from July 2017 (below) for more information about the guides that were removed at this time.
It was also determined in July 2017 that the ANAO would retain three guides and withdraw three guides following a transition period:
Guides to be retained
Guides to be withdrawn following a transition period
Successful Implementation of Policy Initiatives
Public Sector Financial Statements
Public Sector Audit Committees
Developing and Managing Contracts
Public Sector Governance
Since July 2017, the ANAO has continued to work with policy owners as they have developed or revised their guidance material in relation to the six remaining guides.
In April 2018 we sought feedback from the accountable authorities of policy-owning entities on our intention to withdraw the six remaining guides. All relevant entities supported the removal of the guides, although the Department of the Prime Minister and Cabinet raised that the outcome of the work being conducted by the APS Reform Committee may lead to new guidance which supersedes the Successful Implementation of Policy Initiatives guide.
In May 2018 the Auditor-General wrote to the Joint Committee of Public Accounts and Audit (JCPAA) seeking the Committee’s feedback on the proposal to withdraw the remaining better practice guides. The Committee advised:
the JCPAA has no overall objection to the withdrawal of the Better Practice Guides from the ANAO website. We note the ANAO’s commitment to continue to monitor the effectiveness of the replacement guidance material, as appropriate, under its audit program. We further appreciate that the ANAO’s Audit Insights now provide information on audit issues and examples of good practice, as identified through financial statement and performance audit work, by way of shared learnings for all Commonwealth entities.
Considering the feedback from the JCPAA and policy-owning entities’ support, the remaining guides have now been removed from the ANAO website:
- Successful Implementation of Policy Initiatives
- Public Sector Audit Committees
- Public Sector Governance
- Public Sector Financial Statements
- Developing and Managing Contracts
- Administering Regulation
In 2017-18 the ANAO developed audit insights, a new product which identifies and discusses common recurring issues, shortcomings and good practice examples, identified through our financial statement and performance audit work. The objective of audit insights is consistent with the objective of better practice guides: improved public sector administration.
The ANAO will continue to monitor the effectiveness of guidance material, as appropriate, under our audit program.
If you require access to the withdrawn better practice guides listed above, you can find them through the National Library of Australia’s Australian Government Web Archive.
Review of better practice guides
Seventeen better practice guides were available on the ANAO’s website until 1 July 2017. At that time, the most recent was published in 2015 while the oldest was published in 2008.
The independent Review of Whole-of-Government Internal Regulation, known as the ‘Belcher Red Tape Review’, made a recommendation in relation to the ANAO’s better practice guides that ‘the ANAO take the opportunity, where regulators and policy owners have developed or are developing policy guidance material, to review whether there is a continuing need for it to develop, release and maintain its own separate guidance’. The ANAO has considered the Belcher review and the potential for duplication where the regulator has provided guidance on particular subject areas and consulted widely with key stakeholders over the past year about the future of our better practice guides. We consulted with the Australian Parliament and public sector entities, including audit committees within these entities, and then considered the feedback received.
The broadly consistent feedback was that where another entity has, or will be, producing a similar resource and has committed to continue to do so, the ANAO could add more value by monitoring the effectiveness of this resource (and potentially partnering with the entity in its production), whilst ceasing to produce its own resource. On this basis, the ANAO has decided to discontinue and cease distributing a range of better practice guides, and continue to produce only a small number of guides in partnership with policy owners, where possible.
The following better practice guides were removed from the ANAO website by 1 July 2017:
- Implementing Better Practice Grants Administration
- Fraud Control in Australian Government Entities
- Public Sector Internal Audit
- Human Resource Management Information Systems
- Public Sector Environmental Management
- Planning and Approving Projects—an Executive Perspective
- Strategic and Operational Management of Assets by Public Sector Entities
- Innovation in the Public Sector
- Business Continuity Management
- Developing and Managing Internal Budgets
- SAP ECC 6.0: Security and Control
The JCPAA commented that better practice guides have provided a clear benefit to entities, the Parliament and the public in communicating better practice and insights from ANAO audits, and the ANAO has added value by producing these guides in the past.
The Committee suggested that going forward, if it is clear that another entity has or will be producing a similar resource and has committed to do so in the future, the ANAO might add more value by monitoring the effectiveness of this resource (and potentially partnering with the entity in its production), whilst ceasing to produce its own resource.
More specifically, the Committee suggested that:
- where the ANAO continues production of a Guide — it consider more targeted material that can be more easily and frequently updated to reflect key ANAO insights and emerging themes, as well as ongoing ANAO and JCPAA findings and recommendations; and
- where the ANAO discontinues production of a Guide because other entities are producing guidance — ANAO monitoring or partnering work could include ensuring that entity guidance goes beyond a basic regulatory guide, remains of a high quality, is regularly updated, and incorporates key ANAO insights and emerging themes.
The JCPAA also suggested that in respect to resource management guidance released by the Department of Finance, the ANAO work with Finance to incorporate a standard, regularly updated section within each guide, along the lines of ‘Better Practice Notes.’ The ANAO will consult with Finance on this option and a similar suggestion made by Finance (discussed below).
Department of Finance comments
The Department of Finance commented that where a policy requirement is the domain of an entity, it is clearly the role of that entity to explain the requirement and ANAO guidance is potentially confusing. Finance also highlighted the risk of entities interpreting ANAO Guides as de facto standards for future audits in the relevant area of practice.
In particular, Finance advised that it considered the ANAO Guide on Implementing Better Practice Grants Administration as: duplicating the Commonwealth Grants Rules and Guidelines; and suggesting better practice beyond the scope of the current grants framework. Finance identified risk in entities adopting additional processes as a de facto standard. Finance also provided feedback on the remaining stock of Guides.
Finance saw benefit in the ANAO considering how best to exchange observations (made in the context of ANAO audit or review activity) with entities responsible for policy development, to assist in developing examples of good practice or case studies. The ANAO will consult with Finance and other relevant policy owners on this option.
In the context of developing the ANAO’s 2016–17 Annual Work Program, 49 entities were asked for feedback on the better practice guides. Thirty-one entities provided comments, with the overwhelming majority indicating their support for the Guides. A number of entities also indicated their support for the recommendation of the Belcher Review (see below).
A small number of entities mentioned particular guides as being useful reference documents –these included Implementing Better Practice Grants Administration, Public Sector Financial Statements, Public Sector Audit Committees, Public Sector Internal Audit and Fraud control, and Successful Implementation of Policy Initiatives. A small number of entities also mentioned that future guides should be shorter and focus more on case studies and be more timely.
Survey of Audit Committee Chairs
The ANAO sought feedback on the Guides as part of a survey of audit committee chairs in mid-2016. The high level summary of survey responses indicated that:
Audit Chairs were generally positive about the ANAO’s better practice guides, with the majority of respondents agreeing that they are relevant (93% ‘agreed’ or ‘strongly agreed’) and contain beneficial guidance (90%).
Belcher Red Tape Review
The Auditor-General also had regard to the 2015 Independent Review of Whole-of-Government Internal Regulation (the Belcher Red Tape Review). The Review stated that:
Most regulators have indicated a good working relationship with the ANAO in relation to guidance. They note a mutual willingness to work together to ensure a clarity of requirements including identification of the source of the requirements against which audits should be conducted. Consideration should be given, on a policy by policy basis, to incorporating the substance of ANAO better practice guides into policy guidance material produced by the policy owner, to ensure a single, clear source of mandatory minimum requirements and better practice guidance (pp.15-16).
The Review recommended that:
The ANAO take the opportunity, where regulators and policy owners have developed or are developing policy guidance material, to review whether there is a continuing need for it to develop, release and maintain its own separate guidance (p.17).
The ANAO consulted further with Finance, the Attorney-General’s Department and the Department of the Prime Minister and Cabinet in late 2016 and early 2017 on the review and a future approach to co-badged Guides.
The Auditor-General wrote to the JCPAA in February 2017 advising on the outcomes of the review:
In summary, key stakeholders have adopted a broadly consistent view to that expressed by the Committee. That is, where another entity has or will be producing a similar resource and has committed to do so in the future, the ANAO might add more value by monitoring the effectiveness of this resource (and potentially partnering with the entity in its production), whilst ceasing to produce its own resource.
I am comfortable with this approach, which helps address the risk, expressed most clearly by the Department of Finance, that ANAO better practice guides might be interpreted by entities as setting de facto standards for future audits in the relevant area of practice.
The guidance-issuing departments consulted by the ANAO have indicated that they wish to continue to work with us to keep abreast of issues arising in audits, so as to inform their guidance. For example, the Department of Finance is currently reviewing its guidance on grants and has actively involved the ANAO in that process. I welcome this approach and the ANAO will continue to take up these opportunities. We are also consulting with the Department of Finance on options for incorporating ANAO insights into resource management guidance, in addition to reviewing our use of communication channels such as the ANAO website.
In its April 2017 response, the JCPAA indicated a strong interest in being kept abreast of the ongoing monitoring of the effectiveness of existing resources produced by other entities.
The Auditor-General advised entities of the review outcomes in April 2017, in the course of the annual consultative process for the ANAO’s Annual Audit Work Program:
In summary, key stakeholders have adopted a broadly consistent view. That is, where another entity has, or will be, producing a similar resource and has committed to do so in the future, the ANAO might add more value by monitoring the effectiveness of this resource (and potentially partnering with the entity in its production), whilst ceasing to produce its own resource. On this basis, the ANAO will continue to produce only a small number of guides where existing partnerships are in place with policy owners. The remaining better practice guides will be removed from the ANAO’s website by 1 July 2017.
Australian National Audit Office