Representations to the Department of the Treasury in Relation to Motor Dealer Financing Arrangements
In two letters dated 19 and 22 June 2009, the Prime Minister requested a performance audit of a range of matters relating to representations to the Treasury regarding automotive finance arrangements for car dealers. In response to these requests, the Auditor-General decided that ANAO would undertake a performance audit under section 18 of the Auditor-General Act 1997 (Auditor-General Act). The audit objective, based on the matters raised in the Prime Minister's correspondence and in the Parliament, was to examine and report on:
- any representations to the Treasury since October 2008 from all sources regarding automotive finance arrangements for car dealers, including any made in relation to John Grant Motors;
- the nature of these representations;
- the manner in which the representations were responded to by officials, having regard to any relevant standards and procedures; and
- any related administrative matters that came to attention.
1. In late October 2008, following the onset of the global financial crisis, two of the largest providers of wholesale floorplan finance in Australia announced that they would cease offering motor finance1 from the end of 2008. Financiers and representatives of the automotive industry raised concerns with the Government about the effects of a sudden withdrawal of car financing and the inability of the market to accommodate viable dealerships. In this respect, the Department of the Treasury (Treasury) advised the Government that, in light of the role played by the Australian automotive industry in the economy, the withdrawal of two of the largest financiers, and potentially others, was likely to have adverse macroeconomic consequences. This was because, without access to finance, many car dealerships may be forced to close or scale-back their businesses.
2. In response to these circumstances, a Special Purpose Vehicle (SPV) of ‘around' $2 billion was announced by the Treasurer on 5 December 20082 to provide liquidity to car dealer financiers through the securitisation3 of wholesale floorplan loans provided to viable car dealers. The SPV was to be implemented by 1 January 2009 with the support of the four major banks. It was to be a transitional arrangement to operate for 12 months (after which its funding level would be run down) to enable viable dealers to establish new funding arrangements.
3. The announcement that the Australian Government would, through the SPV, intervene in the market to assist car dealers raised the possibility of dealers seeking further information or advice from Ministers' offices and/or Treasury concerning the scheme and its operation. An Information Guide for Car Dealers was released on 19 December 2008 setting out information on the SPV, how it would work, the eligibility criteria and the steps eligible dealers should be taking in seeking to secure wholesale floorplan financing. The Guide outlined that dealers would not have to communicate or interact with the SPV directly and should, in the first instance, apply for floorplan financing from a participating financier of their choice. In this respect, the Guide included contact details for the financiers expected at that time to participate in the SPV.
4. At the time the Guide was released, it was expected that the SPV would be established by 2 January 2009 but that it would need some time, particularly throughout January 2009, to become sufficiently capitalised and fully operational. Whilst the SPV was established on 2 January 2009, it was neither capitalised nor operational by the end of January 2009.4 In this context, Treasury informed the Australian National Audit Office (ANAO) that the policy environment and problems the SPV was seeking to address were evolving, which affected the need for and timing of implementation. Treasury further advised that these issues continued into the first few months of 2009.
5. In February 2009, Treasury advised the Treasurer and his Office that many dealers had obtained alternative ongoing wholesale floorplan finance as a result of the increased market confidence that had followed the announcement of Government intervention, combined with GE Money Motor Solutions and GMAC delaying their withdrawal. Nevertheless, the Motor Trades Association of Australia (MTAA) was raising concerns with Treasury that there were viable dealers that had been unable to secure alternative finance and was pressing Treasury to assist them. It was from February 2009 that some motor dealers found it necessary to approach their local Member, a Minister and/or Treasury to seek assistance with securing ongoing finance.
6. Questions were raised in the Parliament, and the media, during June 2009 concerning representations made to the Prime Minister and the Treasurer about assistance for individual motor dealers, and whether one representation made in relation to a dealership referred to as John Grant Motors, located in Ipswich, Queensland, had received favourable treatment. This led to questions in the Parliament as to whether the Prime Minister and/or Treasurer may have misled the Parliament.
Audit objectives and scope
7. In two letters dated 19 and 22 June 2009, the Prime Minister requested a performance audit of a range of matters relating to representations to the Treasury regarding automotive finance arrangements for car dealers. In response to these requests, the Auditor-General decided that ANAO would undertake a performance audit under section 18 of the Auditor-General Act 1997 (Auditor-General Act). The audit objective, based on the matters raised in the Prime Minister's correspondence and in the Parliament, was to examine and report on:
- any representations to the Treasury since October 2008 from all sources regarding automotive finance arrangements for car dealers, including any made in relation to John Grant Motors;
- the nature of these representations;
- the manner in which the representations were responded to by officials, having regard to any relevant standards and procedures; and
- any related administrative matters that came to attention
8. The audit was planned and undertaken to obtain reasonable assurance that the audit conclusion is based on sufficient and appropriate evidence. Audit fieldwork was conducted between 22 June 2009 and 16 July 2009. ANAO:
- with the assistance of specialist resources, identified and examined relevant electronic and other records held by the Treasury and the Department of the Prime Minister and Cabinet (DPM&C) and met with relevant officials in those two departments;
- also with the assistance of specialist resources, identified and examined relevant electronic mail communications involving the Prime Minister's Office and the Treasurer's Office transacted through the computer systems provided by DPM&C, Treasury and the Department of Parliamentary Services. ANAO examined emails sent or received by all key officials and advisers, including emails that had been archived or held in deleted items folders; and
- through the powers provided by section 32 of the Auditor-General Act, interviewed various individuals so as to obtain information relevant to the audit objectives. These powers were used in relation to the Prime Minister and Treasurer as well as relevant staff in their respective Offices,5 senior Treasury officials involved in the development and implementation of the SPV including Mr Godwin Grech,6 the Managing Director of Ford Credit and two motor dealers, namely: Mr Adam Kaplan, the principal of Hunter Holden in Ryde, Sydney (the motor dealer who made a representation to the Prime Minister) and Mr John Grant (the principal of Ipswich Central Motors/John Grant Motors).
9. The audit was conducted contemporaneous with, but separate to:
- an Australian Federal Police (AFP) investigation into whether an email had been sent from the Prime Minister's Office to Treasury referring for action a representation for financing assistance from an associate of the Prime Minister. The AFP has announced that preliminary results of its forensic examinations indicate that the email at the centre of its investigation has been created by a person or persons other than the purported author of the e-mail.7 The scope of the ANAO audit extended to all actual representations made to the Treasury. Accordingly, the matters being investigated by the AFP have a different focus to the work of the ANAO;
- the Senate Standing Committee of Privileges inquiry into ‘whether any adverse action was taken against Mr Godwin Grech in consequence of his evidence before the Economics Legislation Committee on 19 June 2009, and, if so, whether any contempt of the Senate was committed in that regard'; and
- Treasury's consideration of probity matters and Australian Public Service (APS) Code of Conduct matters, as follows:
- On 26 June 2009, Treasury advised the Treasurer that, in the light of recent departmental investigations in order to assist with the AFP investigation and this ANAO audit, the department had decided not to proceed to activate the SPV until such time as certain questions concerning the establishment of the SPV had been resolved.
- Shortly before finalising this report, Treasury advised ANAO that its probity adviser had concluded the engagement of the Program Manager was defensible from a probity perspective; and Treasury advised ANAO that the Code of Conduct matters are under consideration.
10. In preparing this report, ANAO has been cognisant of the other processes currently in train.
11. Australia's parliamentary system is based on the principles of representative and responsible government. Members of Parliament are elected by the people to govern Australia in the public interest and individuals are able to approach Parliamentarians, including Ministers, for assistance. Ministers are expected to discharge their responsibilities in accordance with wide considerations of public interest; where arrangements are put in place to provide assistance to particular industries, this includes equitable treatment of industry participants, often based on publicly announced criteria.8
12. In December 2008, the Government decided to establish a SPV aimed at providing a possible source of finance for dealers previously financed by GE Money Motor Solutions, GMAC and possibly Ford Credit (which had yet to decide whether or not to continue operating in Australia). The increased market confidence that followed the announcement of Government intervention, combined with GE Money Motor Solutions and GMAC delaying their withdrawal, allowed many dealers to obtain ongoing wholesale floorplan finance from other providers. Nevertheless, concerns were raised by the motor dealer industry that there remained some viable dealers that had been unable to secure alternative finance. Against this background:
- at least 12 representations, either in writing or orally, were made between 2 February 2009 and 17 April 2009 on behalf of 10 eligible motor dealers seeking assistance with securing ongoing wholesale floorplan finance;
- each representation received by Treasury was made through an appropriate channel. One oral representation was made personally to the Prime Minister (after an earlier written representation by this dealer, which the Treasurer's Office had referred to Treasury, had not been responded to by the department), eight were made to the Treasurer or his Office, and the remaining three were made direct to Treasury; and
- Treasury's response to the various representations varied markedly, from not responding to the representation to providing extensive, ongoing assistance to aid the dealer secure ongoing wholesale floorplan finance. The variability in Treasury's response9 did not reflect any instruction on the part of the Prime Minister or his Office, the Treasurer or his Office, or senior Treasury management that some representations were to receive more favourable treatment than others.
13. A particular focus of Parliamentary and public interest in this matter concerned:
- whether the Prime Minister or his Office was involved in the representation for assistance made in relation to Ipswich Central Motors/John Grant Motors, given the principal of this dealership is an acquaintance of the Prime Minister and had previously loaned a motor vehicle to the Prime Minister for use as a mobile electorate office; and
- whether the representation made in relation to Ipswich Central Motors/John Grant Motors received preferential treatment by the Treasurer or his Office.
14. ANAO's examination of relevant records and evidence obtained through interviews confirmed that one representation was made by a motor dealer personally to the Prime Minister. This dealer was not Ipswich Central Motors/John Grant Motors. The Prime Minister's Office forwarded the representation to the Treasurer's Office and Treasury. There was no evidence that either the Prime Minister or his Office played any role in any of the other 11 representations received by Treasury, including the representation made in relation to Ipswich Central Motors/John Grant Motors.
15. Concerning the issue of whether preferential treatment was given to Mr Grant's case, the Treasurer spoke briefly with Mr Grant, at the request of the Member for Oxley. Treasury was aware that the dealer was acquainted with the Prime Minister, but there is no evidence that the Prime Minister was aware of the representation, or that the Treasurer or his Office applied any pressure on Treasury to give this dealer more or better assistance than others.
16. Some attention has also focused on three progress reports in relation to the Ipswich Central Motors/John Grant Motors representation that were sent to the Treasurer's home facsimile. The available evidence is that the Treasurer had raised concerns that this representation indicated that delays in operationalising the SPV was having an adverse effect on motor dealers. The first report was provided at the initiative of the Departmental Liaison Officer in the Treasurer's Office so as to provide some reassurance to the Treasurer that, notwithstanding the delay with operationalising the SPV, viable dealers were still able to receive assistance. The second and third reports were provided at the initiative of Treasury, by using the ‘Reply to All'10 function within the email system , noting that the Treasurer was not in Brisbane when the second report was sent. Following the third report, as the Treasurer was not seeking ongoing updates on the status of this particular representation, the Treasurer's Office sought to indicate to Treasury that reports should not be sent to the Treasurer's home facsimile. No further updates were provided to the Treasurer in respect to the Ipswich Central Motors/John Grant Motors representation.
17. The approach taken to assist Ipswich Central Motors/John Grant Motors was proposed by Mr Grech and, when initial attempts to assist the dealer were unsuccessful, no further assistance was offered by Treasury, or sought by the dealer either from Treasury or Ministers. The dealer has since made arrangements for ongoing wholesale floorplan finance from other sources without further departmental assistance.
18. The audit also considered Treasury's development of the policy proposal to address the effects of reduced liquidity on motor dealers, and the department's implementation of the policy following the Government's decision in early December 2008 to proceed with a SPV.
19. There was not a clear delineation between the policy and implementation phases given the urgency and evolving environment which required ongoing policy formulation. In this context, Treasury's approach to the development of the policy was sound, utilising independent expert advice and involving input from a range of key stakeholders. However, there was less attention given to management of the implementation of the policy measure.
20. Treasury has informed ANAO that, as an experienced Senior Executive Service (SES) officer, Mr Grech had been encouraged to raise any resourcing issues with senior management. Senior Treasury management testified to ANAO that Mr Grech was offered extra support as required, but always gave the impression that implementation was on track. Nevertheless, there was evidence that implementation was lagging, suggesting the need for Treasury to allocate additional resources and skills in light of:
- the short timeframe;
- the complexities of the SPV;
- the need to contract various advisers and service providers; and
- the need to manage responses to representations received.
21. The under-resourcing of the implementation phase of the policy placed at risk the anticipated policy outcomes. It also placed a considerable workload on Mr Godwin Grech, the Treasury official primarily responsible for the development and implementation of the policy measure, particularly in light of his medical condition.
22. ANAO's examination of the implementation phase of the policy also raised serious questions as to whether the Code of Conduct has been breached by Mr Grech. Specifically, ANAO's audit work included examination of evidence that indicated:
- confidentiality about dealings with Ministers and their staff was not maintained in relation to important elements of the development and implementation of the SPV, and the handling of some representations referred to Treasury by Ministers or their Offices;
- some of the email communications and interactions with third parties were inappropriate;
- improper use was made of confidential information in order to assist various outside parties; and
- preferential treatment11 given to one representation was motivated by, amongst other things, the personal circumstances of the dealer principal and Mr Grech's understanding that the dealer principal was a supporter of, and donor to, the Liberal Party of Australia, with other records made by the official stating that he was ‘Lib'.12
23. Treasury advised ANAO that these matters are under consideration.
24. Against the above background, this audit reinforces the importance of effective implementation to achieving policy goals. Amongst other things, implementation requires effective governance, risk management, procurement and contract management, the right type and quantum of resources, and oversight and review.13 The experience of the issues arising from the implementation of the motor dealer financing SPV is a timely reminder for Treasury, and public service agencies more generally, that strength in policy development needs to be matched by strength in program delivery to achieve desired outcomes.
25. The audit has not made any recommendations to Treasury as ANAO did not examine, in the time available, whether the policy implementation shortcomings identified are isolated or more widespread. However, Treasury is encouraged to review its practices more broadly in the light of the matters raised in this report so that the culture of the department, which is committed to providing quality advice to government, absorbs the experience in a positive manner.
Key findings by chapter
Representations for assistance to individual eligible motor dealers (Chapter 2)
26. In the course of this performance audit, ANAO identified 12 representations made either in writing or orally between 1 October 2008 and 30 June 2009 by, or on behalf of, eligible motor dealers. No representations for assistance to eligible motor dealers were made until 2 February 2009, after the publicly advised timetable for the SPV becoming operational had passed. The last identified representation was made on 17 April 2009.
27. The 12 representations were made by, or on behalf of, 10 motor vehicle dealers (two dealers each made a second representation after Treasury did not respond to the initial representation). Of the 12 representations, nine had been referred to Treasury, with three received direct by Treasury.
28. Each of the representations was seeking, to varying extents, assistance to obtain ongoing wholesale floorplan finance, either through the SPV or otherwise. Treasury's response to these representations varied markedly, as follows:
- five of the representations received very little or no direct assistance from Treasury;
- in another six instances, Treasury provided directly or indirectly a moderate level of assistance. Principally, this involved providing information on the operation of the SPV and/or referring the dealer to possible alternative financiers. The representations in this category included Ipswich Central Motors/John Grant Motors and a separate representation made directly to the Prime Minister;14 and
- one representation was provided with significantly more assistance than any other dealer, over a longer period of time. Mr Grech sought to negotiate new wholesale floorplan finance with a number of different financiers, and persisted when initial attempts were unsuccessful (which was different to the approach to a number of other dealers where no assistance was provided and/or no further assistance was provided when initial efforts were unsuccessful). Mr Grech also assisted the dealer with advice on options for rearranging the dealer's finances to assist it obtain ongoing finance.
29. Three representations, including Mr Grant's case, were raised by Treasury with Ford Credit. With the objective of assisting Ford Credit to continue operating in Australia, the Government had taken a decision in December 2008 to allow Ford Credit to participate in the SPV. At that time, however, the terms and conditions of Ford Credit's participation had yet to be settled. Accordingly, it was not the case that the Ipswich Central Motors/John Grant Motors representation was raised with Ford Credit at the time Ford Credit was seeking government assistance.
30. Nevertheless, as the commercial arrangements with Ford Credit and other financiers that were expected to participate in the SPV had not been settled, it was inadvisable for Treasury to do more than either referring dealers to potential financiers known to be active in the market, or asking the contracted Program Manager to provide assistance.15 In addition, it was not prudent for Treasury to indicate to Ford Credit that Mr Grant knew the Prime Minister and Treasurer, notwithstanding that Ford Credit has testified to ANAO that it felt in no way pressured to offer finance to Ipswich Central Motors/John Grant Motors.
Administrative matters (Chapter 3)
31. Access to financing for the motor dealer industry was one of a number of significant policy issues being worked on by the Treasury in the latter part of 2008 and into 2009 as a result of the onset of the global financial crisis. For motor dealers, two of the largest providers of wholesale floorplan finance in Australia had announced in late October 2008 that they would cease offering motor finance from the end of 2008. There were also concerns that dealers whose floorplan facilities were provided by other financiers might similarly be affected should those financiers withdraw or scale-back their operations. Industry bodies, and the Treasury, concluded that addressing what was seen as a market failure was necessary so as to avoid a significant contraction in the number of operating dealerships and the consequential impacts on economic activity and employment.
32. Treasury adopted a sound approach to developing the original policy response to meeting the funding gap resulting from the announced departure of GE Money Motor Solutions and GMAC, and the possible departure of Ford Credit. The outcome was a Government decision to establish, with the support of the four major banks, a SPV to provide wholesale floorplan financing to eligible dealers.16
33. Treasury advised ANAO that the policy environment and problems the SPV was seeking to address was evolving which affected the need for and timing of implementation. The Treasurer's Office was provided with briefings on these developments.
34. Nevertheless, there were a number of significant weaknesses in Treasury's implementation of the Government's policy decisions to address liquidity issues for the motor dealer industry. The challenges involved in turning a policy measure into effective outcomes, and the skills and effort required to do so may not always be fully appreciated.17 Further, in situations where timing imperatives have curtailed the consideration of implementation issues, the risks to successful implementation increase markedly.18 The delayed implementation of the SPV led directly or indirectly to a number of motor dealers approaching their local Member, a Minister and/or Treasury to seek assistance with securing ongoing finance.
35. In terms of administrative matters, there would have been benefit in Treasury devoting more resources, with a range of skills, to the implementation of the policy response to motor dealer industry liquidity issues. Over-reliance on a single individual was particularly problematic in this case as it meant there was no division of responsibilities19 in the implementation of the policy measure, which involved private sector parties being contracted through direct sourcing arrangements, and departmental liaison with a range of stakeholders and other parties. In addition:
- while the risk of SPV implementation being delayed was recognised, Treasury did not develop any explicit project plans or contingency arrangements for how the department would address the identified market failure in the event that there was a substantial delay in the SPV commencing operations;
- Treasury did not maintain accurate records of all representations received, and whether the dealers concerned (presuming they were viable) had been able to secure finance with or without Treasury's assistance.20 Maintaining such records was important as it would have assisted Treasury to assess the extent to which the delay with implementing the SPV was having an adverse effect on otherwise viable dealers;
- there was reporting within Treasury and to Ministers or Minister's Offices in relation to aspects of certain representations, but limited oversight of what assistance, if any, was being provided to other dealers. The nature of any assistance being provided in response to some of the representations, and the reasons, was not well understood within Treasury until recently; and
- the procurements and approval of third party service providers made by Treasury in respect to the SPV were undertaken through a direct sourcing process with a single supplier approached and contracted. Whilst the Commonwealth Procurement Guidelines permit direct sourcing in urgent circumstances such as those faced by Treasury, the department:
- did not record the circumstances and conditions that Treasury considered justified the use of a procedure other than a tender process; did not make adequate records as to how the parties that were direct-sourced were identified as being the only party to be approached;
- agreed to various engagements before it had obtained a quote or estimate from the contractor. This approach seriously weakens the Commonwealth's negotiating position and provides little comfort that the Commonwealth is receiving value for money in agreeing to the contractual arrangements;
- once a quote or estimate was obtained, did not document the basis on which it was satisfied that the engagement terms represented value for money;
- gave insufficient priority to documenting the engagement terms, resulting in extended delays in contracts being prepared and signed; and
- did not promote accountability and transparency for these procurements, with only one of the procurements published on AusTender.
36. There are also serious questions as to whether the APS Code of Conduct has been breached by Mr Grech in certain respects. This was particularly in relation to the disclosure of confidential information to parties outside executive government that had no entitlement to this information, and the nature of some of the email communications and other interactions with third parties.
37. Given the focus of the audit, in the time available ANAO did not examine whether the implementation shortcomings are representative of Treasury's processes when implementing policy initiatives, or more broadly in respect to procurement practices and records management.
Summary of agency response
38. A proposed report was circulated to relevant departments and others who had a special interest in it (as defined in the Auditor-General Act) on 17 July 2009.
39. Section 19(5) of the Auditor-General Act states that the Auditor-General must, in the final report, include all written comments received from recipients of the proposed report, or an extract of the proposed report. Formal comments were provided by Treasury, Credit Suisse (the Program Manager) and Mr Godwin Grech.21 These comments are included in full22 in Appendix 1 of the report. Where considered appropriate, the report has been amended in the light of those comments. In addition, where relevant information had been provided by those people interviewed by ANAO, this has been taken into account in the preparation of the final report, including in response to formal comments made by recipients of the proposed report. In other areas where a response has raised a broader issue not central to the audit objectives, the matters have not been examined by the ANAO in the time available. Treasury also provided a summary of its formal comments, which is reproduced below.
The Department of the Treasury (the Treasury) notes the key findings of the Audit Report titled Representations to the Department of the Treasury in relation to motor dealer financing assistance, and in response will undertake a broader review of its internal processes and practices in regard to policy implementation.
The Treasury also notes the findings that there is no evidence that either the Prime Minister or his Office made representations to the Treasury in relation to Ipswich Central Motors/John Grant Motors, or that the Treasurer or his Office applied any pressure on the Treasury to give this dealer more or better assistance than other dealers. These findings accord with the Treasury's understanding of the representations.
The Treasury notes that the investigations undertaken by the ANAO have raised serious questions as to whether the APS Code of Conduct has been breached by Mr Grech. These issues relate to indications of inappropriate dealings with third parties, improper use of confidential information, and politically motivated actions. These and other related matters are being investigated internally by the Treasury.
The Treasury accepts the conclusion by the ANAO that there were significant weaknesses in implementation of the OzCar facility, and notes that this conclusion needs to be considered in the context of the issues which have been raised concerning Mr Grech's conduct. While the conduct matters remain under investigation, it would be inappropriate to express a determined view on them. However, as things presently stand (and subject to further investigation and any input from Mr Grech) it does appear that weaknesses outlined in the Audit Report regarding the implementation of the OzCar facility were substantially contributed to by actions of an individual officer.
While acknowledging the benefits of adequate resourcing for policy implementation and adherence to proper processes, the Treasury observes that the more serious issues identified by the ANAO, including the delay in implementation, may not have been substantively prevented through the provision of additional resources and improved internal processes.
In addition to the response to this Audit Report as noted above, the Treasury will also:
- ensure that the matters raised in respect of Mr Grech's conduct are dealt with appropriately; and
- address any consequential issues concerning the activation of the OzCar facility.
1 Wholesale floorplan finance involves car dealerships borrowing funds to purchase the stock of cars they have on show.
2 The Hon Wayne Swan, Treasurer of the Commonwealth of Australia, Car Dealer Financing: Establishment of a Special Purpose Vehicle, Media Release of 05/12/2008, No. 136.
3 Australian Government financial support for the SPV was to be through a guarantee expected to cover a minor proportion of the securities that would be issued.
4 One cause for the implementation delay was that some of the key contractual documents for the SPV had to be re-negotiated in light of the Government's decision to allow Ford Credit to participate in the SPV as a financier (rather than dealers who were previously financed by Ford Credit contracting with eligible financiers).
5 Consistent with the focus of the audit objectives on representations to the Treasury and the handling of these representations, and having regard to the requirements of section 15 of the Auditor-General Act, the performance audit did not consider the actions of persons employed or engaged under the Members of Parliament (Staff) Act 1984 other than the extent to which their actions related to the receipt and referral of representations to Treasury, and the way in which Treasury responded to those representations.
6 Mr Grech, an experienced Senior Executive Service Band 1 Treasury official, was primarily responsible for the implementation of the policy response to motor dealer industry liquidity issues.
7 Australian Federal Police, Media Release, Update regarding investigation, 22 June 2009, at <http://www.afp.gov.au/media_releases/national/2009/update_regarding_investigation> [accessed 9 July 2009].
8 Consistent with this principle, the December 2007 Standards of Ministerial Ethics outline a Minister's obligations in respect to integrity, fairness, accountability, responsibility and to act in the public interest.
9 See Table 2.1 in the body of the report.
10 The Treasurer's home facsimile number is set up as an email address within the Treasury email system.
11 See further at the third dot point of paragraph 28.
12 Testimony to ANAO by Mr Grech was that his motivation in drawing attention to these factors was to try and secure support for the passage through the Parliament of the Car Dealership Financing Guarantee Appropriation Bill 2009.
13 ANAO and Department of the Prime Minister and Cabinet, Implementation of Programme and Policy Initiatives: Making implementation matter, October 2006, p. 26.
14 The dealer had first contacted the Treasurer's Office in February 2009, but Treasury had not provided the dealer with any assistance. Two and a half months later, the dealer approached the Prime Minister at a function in Ryde, seeking assistance. At the Prime Minister's request, the Prime Minister's Office relayed the representation to the Treasurer's Office and Treasury. The Prime Minister's Office also sought an update on the operation of the SPV, so as to assess whether the concerns expressed by the dealer may have been widespread. In respect to the second representation from this dealer, Treasury discussed the dealer's situation with an industry representative body. In a later brief providing an update on the SPV, Treasury, based on advice provided to it, included a statement to the Prime Minister that the dealer had secured finance (the Prime Minister never saw this brief). However, finance had not been secured (negotiations with the financier were not concluded) and, ultimately, the dealer arranged his own ongoing finance with Treasury unaware of, and not involved with, this process.
15 On 11 June 2009, Treasury amended the contact details published on its website to indicate that inquiries should be directed to the Program Manager.
16 One of the key criteria was that the dealership be demonstrably a viable business consistent with the usual commercial lending criteria of recognised finance providers.
17 ANAO and Department of the Prime Minister and Cabinet, Implementation of Programme and Policy Initiatives: Making implementation matter, October 2006, Foreword.
18 ANAO and Department of the Prime Minister and Cabinet, Implementation of Programme and Policy Initiatives: Making implementation matter, October 2006, p. 9.
19 Segregation of duties is an accepted internal-control measure.
20 More broadly, important records concerning the development and implementation of the SPV had also not been captured into Treasury's official record-keeping systems.
21 In providing comments to ANAO, Mr Grech's lawyer advised ANAO that: ‘Mr Grech understands that, pursuant to sub-section 19(5) of the Auditor-General Act 1997, all of his comments will be taken into account in the ANAO publishing its final report and that they (his comments) will be published along with the final report.'
22 Apart from two representations explicitly identified by the Treasurer or the Prime Minister in their statements in the Parliament, given commercial and other relevant considerations, ANAO has not specifically identified the other individual dealers who made representations for assistance. Some formal comments on the proposed report identified a third dealer by name, and ANAO has edited these comments so as to not identify the dealer concerned, without otherwise affecting the comments provided on the proposed report.