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 will be removed from the ANAO website by 1 July 2017:

  1. Implementing Better Practice Grants Administration
  2. Fraud Control in Australian Government Entities
  3. Public Sector Internal Audit
  4. Human Resource Management Information Systems
  5. Public Sector Environmental Management
  6. Planning and Approving Projects—an Executive Perspective
  7. Strategic and Operational Management of Assets by Public Sector Entities
  8. Innovation in the Public Sector
  9. Business Continuity Management
  10. Developing and Managing Internal Budgets
  11. SAP ECC 6.0: Security and Control

If you require access to the withdrawn better practice guides listed above, you can find them through the National Library of Australia's Australian Government Web Archive.

Background

The purpose of the ANAO is to drive accountability and transparency in the Australian Government sector through quality evidence based audit services and independent reporting to Parliament, the Executive and the public, with the result of improving 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 have included the publication of Better Practice Guides on aspects of Commonwealth administration, for the information of Australian Government entities.

Review of Better Practice Guides

Seventeen Better Practice Guides are currently available from the ANAO’s website. The most recent were released in 2015 while the oldest was published in 2008. To inform the ANAO’s future approach for sharing audit insights, the Auditor-General sought comments on these Guides in May 2016 from the Joint Committee of Public Accounts and Audit (JCPAA), the Department of Finance and 49 Australian Government entities. The ANAO also sought feedback on the Guides as part of a survey of audit committee chairs.

JCPAA comments

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.

Entity comments

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).

Further consultations

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.

Next steps

The ANAO will retain the following Guides:

  • Successful Implementation of Policy Initiatives
  • Public Sector Audit Committees
  • Public Sector Governance

The ANAO will withdraw the following Guides from its website, following a transition period:

  • Public Sector Financial Statements
  • Developing and Managing Contracts
  • Administering Regulation

The ANAO will withdraw the following Guides from its website in the new financial year (2017–18):

  • 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

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.

Australian National Audit Office
June 2017