• Dr Caralee McLiesh PSM, Auditor-General for Australia addressed the Audit Committee Chairs Forum. A summary of the key points from her presentation is below.

Update on strategic priorities

• The ANAO is working on a number of enterprise projects to bring to life its three strategic priorities — on enhancing impact where it matters, driving performance through innovation, and inspiring and developing its people.
• We are strengthening our engagement with the parliament and the public sector to share the lessons from our audit work including the good practices and areas for improvement.
• Development of a new product mix is underway, with the introduction of rapid reviews to allow ANAO to report in a more timely way to the Parliament. Rapid reviews have reduced scope, tighter focus on risk and/or streamlined approaches, to enable a short and sharp audit.
• The number of audit engagement leads that have joint signing responsibilities across financial statements and performance statements products is increasing, to bring together insights and allow for more efficient and coordinated engagement.
• The ANAO is embracing artificial intelligence (AI) while managing risk. The ANAO’s AI policy was released in July 2025 and it requires staff to take accountability for the output, there is always a ‘human in the loop’. The ANAO’s artificial intelligence transparency statement is published on the website.

Supporting the Parliament (including the Joint Committee of Public Accounts and Audit)

• A key focus of the ANAO in 2025–26 is supporting the 48th Parliament of Australia, particularly the Joint Committee of Public Accounts and Audit (JCPAA).
• The Auditor-General noted that timely publishing of annual reports ensures the Parliament can effectively perform its scrutiny role, provide transparency over government operations and build public trust.

Annual Audit Work Program

• The ANAO has refreshed its approach to the audit work program planning, with a stronger focus on risk.
• A rolling multi-year planning cycle is being introduced, with a view to stronger signalling and enhancing the program’s responsiveness to emerging risks and public sector priorities.
• The program will include a focus on value for money, efficiency and the use of digital technologies.

End of year reports

• The ANAO has published its end of year information report (2024–25) into performance audit and financial statements. The end of year information report into performance statements is forthcoming.

Financial statements audits

• The quality of financial reporting remains strong, with continued improvements in preparation and fewer audit adjustments.
• Our audit findings highlight a high level of risk in information technology (IT) across the public sector. Weaknesses in IT controls continue to be the ANAO’s most common finding and this is at a time when cybersecurity threats are growing, reliance on IT systems for business delivery is increasing and the complexity of IT systems is greater than ever.
• Over 95% of entities have implemented the new fraud and corruption control framework, although 27% lack a formal National Anti-Corruption Commission (NACC) referral process.
• There is a modest increase in legislative breaches, highlighting the need for greater visibility of legal advice within (and between) entities on a risk basis and alignment of IT systems with evolving laws.
• Some balance sheet movements warrant closer attention — for example, movements of provisions for payments in the future can be a sign of future affordability challenges.

Performance statements audits

• Performance reporting capability is improving. Reporting on outcomes rather than just outputs is increasing.
• A greater focus on efficiency is needed, with very few performance statements capturing measurement of efficiency or productivity. A stronger focus on how resources are utilised and outcomes are achieved is essential to ensure value for money and sustainable public sector performance.

Performance audits

• This is the ANAO’s second year of tabling an information report on the annual outcomes of our performance audits.
• Thematic analysis of 44 performance audits identified integrity, stewardship, risk management, and performance management as recurring themes.
• Basic requirements, such as compliance with the Commonwealth Procurement and Grants Rules, are still not consistently met by entities.

2024–25 Financial Reporting

• The Final Budget Outcome was released on 30 September 2025. The 2024–25 Consolidated Financial Statements were signed by the Minister for Finance on 23 November 2025 and are expected to be tabled in mid-December 2025.

2025–26 Professional Development

• The Department of Finance, in collaboration with the Australian Public Service Academy (APS Academy), will host a series of training sessions throughout February 2026 as part of Accounting and Finance Month. It will include professional development sessions and a MasterCraft session aimed at building the knowledge, capability and careers of accounting and finance staff across the APS.

• The Deputy Auditor-General Rona Mellor PSM hosted a discussion centred on four key areas of risk: legislative breaches; IT controls; procurement; and AI.
• Attendees were encouraged to share examples of good practice from their Audit Committees and ‘killer questions’ they could ask, on the areas of risk:
  • Legislative breaches
    • Regular compliance surveys of staff on financial laws and enabling legislation.
  • Procurement
    • Request a list of the top 10 procurements and top 10 variations. Committees can then pursue questioning on value for money.
    • For upcoming procurements, particularly when there’s been a longstanding provider, request information on testing the market.
  • AI
    • AI is an umbrella term, committee conversations can be more insightful if they understand the different components. Request a briefing on what the entity is doing in the broad umbrella of AI, including on risk.
    • Ask contractors do they use AI and how they are managing the risk?
  • Other
    • Deep dive/presentation on a particular theme, emerging risk or issue. Ask management to bring along the accountable team and representatives to provide more detailed insight into operations.
    • Request insights into operational risks, that is below the level of enterprise risks.
    • Consider the entity’s assurance framework.
• The ANAO encouraged Audit Committee members to provide feedback on the Forum, as we remain committed to use it as a platform for members to exchange best practices, challenge thinking, and engage with ANAO audit insights. Our ongoing aim is to ensure the Forum continues to provide genuine value as a collaborative platform for learning and public sector improvement. If you have any feedback you’d like to see incorporated in future forums, please contact External.Relations@anao.gov.au.

• A summary of Auditor-General Report No. 4 of 2025–26 on the 2024–25 Performance Audit Outcomes information report was shared at the Audit Committee Chairs Forum.
• The four key themes that emerged from our performance audits tabled in 2024–25 were: integrity; stewardship; risk management; and performance management.
• The report includes a five-year analysis of performance audits (2020–21 and 2024–25), with 54 per cent of audit conclusions assessed as ‘positive’.
• Entities generally demonstrate strong capability in policy development. Grants administration and procurement are areas for attention to improve performance across the public sector.
• Adverse findings were notably higher in earlier stages (design and standing up phases) of delivery. Early-stage programs can be vulnerable to implementation risks and face governance challenges.
• The ANAO’s insights products and newsletter Audit Matters provide further guidance and lessons learned.

• The Audit Committee Chairs Forum included a presentation from Trish Hyde the CEO of the Institute of Internal Auditors - Australia.
• Trish Hyde presented on the role and importance of internal audit with reference to the Three Lines Model. She outlined the opportunity to unlock value from the internal audit function.
• Key takeaways for audit committee members:
  • Internal audit is not a cost burden but a strategic advisor for audit committees, providing independent and objective assurance.
  • How to unlock value: appoint a qualified leader of internal audit function (Chief Audit Executive); align internal audit with the organisation’s goals and risks; position your internal audit function appropriately, that is have a direct reporting line to the Audit Committee/Accountable Authority and establish a Charter enabling their function to operate; and resource it appropriately for your entity.
  • Audit committees should actively engage with internal audit, seek regular updates, and leverage insights to address systemic issues and root causes of weaknesses in the system of internal control.
• For access to 20 Critical Questions Directors should ask about Internal Audit and  IIA - Australia White Paper: A System of Internal Control, please contact: External.Relations@anao.gov.au.

• The Audit Committee Chairs Forum featured a panel discussion focused on Conflict of Interest (COI) risks and key considerations, with insights from:
  • Nathan Callaway, Executive Director, Performance Audit Services Group, Australian National Audit Office
  • Kylie Barber, Assistant Commissioner, Integrity, Performance & Employment Branch, Australian Public Service Commission (APSC)
  • Anthony Coles, First Assistant Secretary, Integrity, Security and Assurance Division, Department of Home Affairs
• The panel discussed the new framework, areas of good practice and improvement from the ANAO’s series of COI audits and practical application of COI processes.
• Key takeaways for audit committee members:
  • New framework: The APS Conflict of Interest Management Framework: Better Practice Model was developed by the APSC in partnership with the Department of Finance and the National Anti-Corruption Commission to provide clear and consistent guidance.
  • Process: Declaring a COI is not enough on its own, there needs to be an assurance process over whether the risk declared and the management actions around that risk are well taken.
  • Culture: Create a culture of openness and normalcy towards conflicts. Given the size of Canberra, it would not be unexpected to see declarations, particularly at senior levels.
  • Carrot and the stick: For annual declarations of interest for Senior Executive Service (SES) staff, the Department of Home Affairs digitised its annual declaration form, provided a three week window to complete the form in October (was previously December to January) and linked completion of the form to pay progression. The Department of Home Affairs was audited (along with other entities) in Auditor-General Report No. 47 of 2024–25 Management of Senior Executive Service Conflict of Interest Requirements.
  • Potential questions/discussion topics: ensure that personal interests and COIs are managed proactively rather than as a formality; request a compliance summary of SES personal interest declarations; seek assurance on COI management plans; enquire if declarations are being used to understand risks; and ensure there is appropriate training.