• 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.
• The Australian National Audit Office (ANAO) is a key part of Australia’s accountability system. It has a central role in building trust and confidence in our parliamentary system of democracy, and it is the embodiment of public service values, including integrity and accountability. At the core of ANAO is to improve the performance of government.
• Audit committees (or audit and risk committees) also play a critical role in our system of government. These committees provide accountability and advice to accountable authorities and can serve as a rich resource for departments.

Organisational change and strategic priorities

• The ANAO has undergone a period of change. The organisation has filled five positions at the SESB2 level with a mix of internal and external appointments. The ANAO’s new executive team has a vast amount of experience in audit and the delivery of public sector programs.
• The ANAO Corporate Plan 2025-26 was published on 11 July 2025. It includes a new ‘Strategy on a Page’ which highlights the ANAO’s strategic priorities. There are three strategic priorities:
  • Impact where it matters: keeping our purpose at the heart of all we do, ensuring our work supports Parliament and contributes to meaningful improvement across the public sector.
  • Performance through innovation: focuses on how we improve by embracing change, using data and technology wisely, and finding smarter ways to deliver high-quality audit work.
  • Inspire and develop our people: recognises that everything we achieve depends on the capability, diversity, and wellbeing of our workforce.

• The ANAO has released a range of products across our three audit types (financial statements audit, performance audit, and performance statements audit). A summary of the key lessons and findings from these products were shared at the Audit Committee Chairs Forum.

Interim Report on Key Financial Controls of Major Entities

• The Interim Report on Key Financial Controls was published on 29 May 2025. The report has been streamlined with a clearer narrative and data on findings.
• Key findings from the report include:
  • Ongoing weaknesses in IT controls: Sixty-five percent of all findings were related to IT controls environment (most security related). It is essential for the public sector to ensure the confidentiality, integrity and availability of information systems and data, particularly in an era of mixed trust in institutions. The ANAO has found some improvements in its findings related to user access controls.
  • There were significant findings related to compliance and quality assurance frameworks and legislative breaches. This poses a risk that legal and compliance matters are not sufficiently considered for financial reporting purposes by the accountable authority and chief financial officer.
• Audit committees play a critical role in both areas. The information provided to audit committees is often a ‘birds eye view’ and they have the ability to ask entities about things like the IT control environment, its compliance, and legislative controls, which can lead to improvements in how entities manage these practices.

Performance statements audit end of year and forward program

• The 2024–25 reporting period marks the tenth year of the requirement for the accountable authority of a Commonwealth entity to prepare annual performance statements.
• The ANAO is now in the fourth full year of the audit program, with 14 entities audited last financial year and 21 audits planned for this financial year.
• On 19 February 2025, the ANAO published the summary report for the 2023-24 performance statements audit program ‘Performance Statements Auditing in the Commonwealth — Outcomes from the 2023–24 Audit Program’.
• This is an important piece of our audit work. Performance statements audits ask the question ‘how do we know if public services are delivering the results as intended?’
• Meaningful performance information keeps the parliament, the public informed about how taxpayer dollars and powers entrusted in the government sector are used to deliver better services. Accountability for performance is at the foundation of trust and confidence in the public sector – needed more than ever at a time when in most western democracies trust and confidence in government is under threat.
• And at a more immediate level, meaningful performance information is needed by agencies to run their business - to understand what is working and what needs improvement, monitor change and learn. If we do not have good measures, how do we know how to lift performance?
• Over the past four years, the ANAO has seen improvements in performance reporting, with stronger compliance with legal requirements and improvements in the reliability of measures. In entities with repeat audits, ANAO has made fewer findings, and we have witnessed growing measures of maturity in performance measurement systems.
• The ANAO continues to work with an expert advisory panel on performance statements audits.

Performance audit developments

• The ANAO’s Annual Audit Work Program 2025-26 (AAWP) was published in July 2025.
• The AAWP focuses on core public sector activities and areas of most risk, areas of large spending, whether the intended outcomes being achieved, and whether the frameworks supporting the public sector are fit for purpose.
• The program includes a continuation of audits of entities’ compliance with essential frameworks, integrity, and ethics.
• Emerging technology will also be a continuing focus of audit as the ANAO’s navigates its own approach to using AI, and the sectors, to support efficiencies, and innovation, being mindful of the importance of getting the security settings right.
• As the new Parliament commences, the ANAO we will write to new ministers, parliamentarians, and committees about our work. The AAWP plays an important role in this as it outlines to the Parliament the core trends in the sector and the areas of greatest risk.
• Key risks across the sector relate to governance, service delivery, grants administration, procurement, policy development, regulation, asset management and sustainment, and financial management.
• There are several cross-cutting themes in the risk profile, including stewardship and the use of artificial intelligence (AI).
• Stewardship was relatively recently added as an APS value and the ANAO has identified issues in stewardship approaches that do not provide sufficient oversight and lack a coordinated approach to support stakeholder entities.
• The ANAO has observed a substantial increase in use of AI across the public sector in the last few years – from 27 entities in 2022-23 to 56 in 2023-24. This will continue to grow exponentially and there is a real and immediate role for audit committees to provide advice on the governance arrangements in place to manage the risks – particularly around data management.
• The ANAO recently published an Audit Lessons on the ‘Governance of Data’. This piece includes questions for reflection across five lessons:
  • Value data as an asset
  • Develop an information governance framework and data strategy
  • Establish data leadership and define roles and responsibilities
  • Document data methodology with processes mapped end-to end
  • Strengthen assurance over third party data.
• The questions listed in the Audit Lessons are a useful tool for audit committees when thinking about data governance for the entities. Audit committees can also check for compliance in entities against policy for the responsible use of AI in government and the Protective Security Policy Framework.
• The ANAO is preparing the second edition of a new annual product – an information report - that summarises key themes from our performance audit reports. This helps to identify and communicate good practices and common pitfalls that the public sector can learn from.
• The first of these reports published late last year identified thematics in performance audits across agencies’ activity in planning and implementation, evaluation, procurement and contract management, and cyber security.
• The next report is due to be published in August 2025 and will summarise the 44 reports tabled in 2024-25.

• The Deputy Auditor-General led an engaging discussion with the audit committee chairs, focusing on the most pressing issues facing audit committees. Key themes that emerged included:
  • Unlawful practices and legislative breaches: The ANAO continues to observe instances of non-compliance with legislation, raising concerns that legal and compliance frameworks may not be robust enough to support accurate financial reporting. Maintaining a strong culture of lawfulness across agencies is vital to uphold public trust and ensure the integrity of operations. Audit committees are urged to ensure these risks are proactively addressed.
  • Assurance mechanisms: Chairs discussed the importance of seeking strong assurance from entities about their control environments, governance settings, and compliance culture. Effective oversight requires more than just documentation—it requires active engagement and verification.
  • Responding to ANAO findings: A central question raised was how audit committees can gain confidence that audit findings are not only acknowledged but are being addressed through clear, actionable plans. There is a growing emphasis on using audit insights as opportunities for organisational learning and continuous improvement.
  • Cyber security: These two issues remain top priorities. Cyber resilience is a persistent concern, particularly in light of increasing threats and the evolving digital landscape.
• Audit committees are encouraged to reflect on these lessons and consider how they are integrating them into their oversight practices.

2024–25 financial reporting

• Audit cleared financial statements are due to be submitted to the Department of Finance (Finance) by 15 August 2025 for material entities and 28 August 2025 for small entities. These submissions support the preparation of the Australian Government’s Final Budget Outcome and Consolidated Financial Statements (CFS).
• The supplementary reporting pack (SRP) is due back to Finance by 19 August 2025 for material entities and 28 August 2025 for small entities.
• For 2024–25 financial reporting, there are no significant accounting standard changes.
• Machinery of government (MoG) changes took effect on 13 May 2025, and a MoG Taskforce has been established in Finance to support implementation. Additional disclosures will be required in both the 2024–25 and 2025–26 financial statements.

• The Audit Committee Chairs Forum featured a panel discussion focused on performance statements, with insights from:
  • Dr Angela Barrett, Chief Operating Officer, Australian Criminal Intelligence Commission
  • Mr Simon Writer, First Assistant Secretary, Department of Finance
  • Mr George Sotiropoulos, Group Executive Director, Performance Statements Audit Services Group, ANAO
• The panel explored key issues and shared sector-wide lessons on the development and audit of performance statements.
• Key takeaways for audit committee members:
  • Supporting quality and meaningful reporting: Audit committee members play a critical role in ensuring that corporate plans are of high quality and that performance statements are meaningful and relevant.
  • Driving a culture of accountability: Effective audit committees help foster a strong culture of transparency and accountability in performance reporting.
  • Influencing audit practices: Constructive feedback from audit committees can shape and improve the ANAO’s performance statements audit methodology.
  • Improved guidance: The Department of Finance is working to enhance its suite of resource management guides to better support entities under the Commonwealth Performance Framework.
• These insights underscore the growing importance of performance reporting in demonstrating value and impact across government.