The Auditor-General responded on 10 May 2018 to correspondence from Senators Patrick, Griff, Hanson-Young and Bernardi, Ms Rebekha Sharkie MP and the Hon. Tony Burke MP dated 24 April 2018, requesting that the Auditor-General conduct an investigation to examine the purchases of water for environmental flows in the Murray-Darling Basin.

Auditor-General's response

10 May 2018

Senator Rex Patrick
Senator Stirling Griff
Ms Rebekha Sharkie
Senator Sarah Hanson-Young
The Hon. Tony Burke MP
Senator Cory Bernardi

I am writing in response to your letter of 24 April 2018 requesting an audit of Commonwealth purchases of water for environmental water flows in the Murray-Darling Basin.

My office is currently consulting on the draft annual audit work program (work program).  The work program is designed to inform the Parliament, the public and government entities of planned audit coverage in 2018–19. As required under the Auditor-General Act 1997, I must have regard to the audit priorities of the Parliament as determined by the Joint Committee of Public Accounts and Audit (JCPAA). I have therefore recently written to the JCPAA seeking input into the draft work program. I also consider it important to seek feedback from Australian Government entities and have written to the accountable authorities that are the subject of proposed performance audit coverage to seek feedback on the topics relevant to their interests. In addition, the Australian National Audit Office (ANAO) has invited comment from the public on the draft work program through the ANAO website at https://www.anao.gov.au/work-program/draft.

A proposed audit Procurement of strategic water entitlements is included in the 2018-19 draft work program. This audit would examine the procurement of strategic water entitlements by the Department of Agriculture and Water Resources, including consideration of value for money and the application of the Commonwealth Procurement Rules. In the event that the ANAO commences the proposed audit during this financial year, I will consider the specific matters you have raised in the context of planning the objectives and scope of the audit.

Following receipt and consideration of all feedback, the work program will be published in early July 2018. The work program will include around 100 potential performance audit and assurance review topics, and provides details about our in-progress performance audit and assurance work. Throughout the year, I consider these identified audit priorities, recent developments in the public sector, requests for audit, and resourcing and decide which audits will commence.

Yours sincerely

Grant Hehir

Correspondence from Senators Patrick, Griff, Hanson-Young and Bernardi, Ms Rebekha Sharkie MP and the Hon. Tony Burke MP

This correspondence included a research paper from The Australia Institute titled That's not how you haggle: Commonwealth water purchasing in the Condamine Balonne. The paper was authored by Maryanne Slattery and Rod Campbell and is dated March 2018.

Transcript of letter from Senators Patrick, Griff, Hanson-Young and Bernardi, Ms Rebekha Sharkie MP and the Hon. Tony Burke MP

24 April 2018

Mr Grant Hehir
Auditor-General
Australian National Audit Office
19 National Circuit
Barton  ACT 2600

Dear Auditor-General

Allegations concerning the Murray-Darling Basin Plan

We refer to the allegations raised in analysis by The Australia Institute (enclosed) and various media reports relating to the purchases of water for environmental flows in the Murray-Darling Basin.

The analysis and reports allege that the Department of Agriculture and Resources, which manages the purchase of water, significantly overpaid vendors for water in the Warrego catchment, Tandou and the Condamine-Balonne Valley.

If true, this would mean that the Federal Government has not achieved value-for-money for the taxpayer in executing the Murray-Darling Basin Plan.

Accordingly, we ask you to investigate these allegations and any other matter you consider relevant arising out of the analysis conducted by The Australia Institute including, but not limited to, all purchases of water by the Commonwealth to ensure they have met the requirements of the Commonwealth Procurement Rules.

Yours sincerely,

Rex Patrick
Senator for South Australia

Stirling Griff
Senator for South Australia

Rebekha Sharkie MP
Member for Mayo

Sarah Hanson-Young
Senator for South Australia

The Hon. Tony Burke
Member for Watson

Cory Bernardi
Senator for South Australia