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Audit of purchases of environmental water by the Commonwealth, and on behalf of the Commonwealth
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The Auditor-General responded on 29 April 2019 to correspondence from the Minister for Agriculture and Water Resources, the Hon David Littleproud MP, dated 23 April 2019, requesting that the audit of purchases of environmental water by the Commonwealth, and on behalf of the Commonwealth, currently listed as a potential audit be brought forward and expanded.
29 April 2019
The Hon. David Littleproud MP
Minister for Agriculture and Water Resources
By email: firstname.lastname@example.org
Performance audit—purchases of environmental water
You wrote to me on 23 April 2019 requesting that a potential audit of purchases of environmental water listed on the Australian National Audit Office’s (ANAO’s) current work program, be brought forward and expanded to cover all water purchases undertaken by the Commonwealth.
In your letter you acknowledge that the decision to audit rests with the Auditor-General. The ANAO undertook work to scope this potential performance audit from February 2019 including initial work with the Department of Agriculture and Water Resources (the department).
This performance audit has now formally commenced and I have advised the Secretary of the department accordingly. The criteria for this audit are listed at https://www.anao.gov.au/work/performance-audit/procurement-strategic-water-entitlements. In short, the performance audit will look at the design of the current policy for water buy-backs, and whether its implementation has been effective. At this stage, I do not anticipate that the performance audit will cover in detail the period from 2008.
Your letter further indicates, in respect of this audit, that all documentation and relevant staff will be available to assist. Thank you for this assurance.
While information gathered during ANAO audits is usually provided through such professional co-operation, I thought it would be useful to briefly explain the information gathering powers available to be used in carrying out Auditor-General functions under the Auditor-General Act 1997 (the Act).
The information gathering powers contained in section 32 of the Act allow the Auditor-General to direct a person to do all or any of the following: (a) provide the Auditor-General with any information that the Auditor- General requires; (b) to attend and give evidence before the Auditor-General or an authorised official; (c) to produce to the Auditor-General any documents in the custody of or under the control of the person. Subject to certain restrictions relating to parliamentary privilege, this may include a Member of Parliament or Minister as well as public servants and Commonwealth partners (that is persons or organisations who receive Commonwealth money for a particular purpose). Section 32 also provides for information to be given to the Auditor-General under oath or affirmation. Further, the Auditor-General has powers under section 33 of the Act to enter premises and inspect records of Commonwealth entities and certain other entities. Whether and when to invoke specific powers is a matter considered in each performance audit.
I expect that the performance audit report for this topic will be presented to the Parliament in December 2019.
I note that you copied your correspondence to the Hon. Tony Burke MP, Shadow Minister for Environment and Water. I have provided a copy of this correspondence to the Shadow Minister.
Correspondence from the Hon. David Littleproud MP
Transcript of letter from the Hon. David Littleproud MP
23 April 2019
Mr Grant Hehir
Australian National Audit Office
GPO Box 707
CANBERRA ACT 2601
I am writing to request that the audit of purchases of environmental water by the Commonwealth, or on behalf of the Commonwealth, currently listed as a ‘potential audit’ be brought forward and expanded to cover all water purchases undertaken by the Commonwealth.
If you decide to conduct this audit, I suggest that it prioritise the large purchases of environmental water including, but not limited to, the purchase of 28.75 GL from Eastern Australia Agriculture. It is important that this also include previous major water purchases undertaken by the Commonwealth (and on behalf of the Commonwealth) since 2008 including significant purchases undertaken through open Tender.
I am aware of public scrutiny of these purchases given the relatively large sums involved. Transparency is important to ensure that the Government, on behalf of taxpayers, realises value for money in purchasing water for environmental purposes and I believe an audit of this nature would be beneficial for the future management of the Australian water market.
It is important to maintain public confidence in the Murray-Darling Basin Plan. The Plan is a bipartisan agreement that is key to ensuring a future for Basin communities and the health of the environment. A review that includes the tender and procurement processes undertaken by relevant Departments, tender evaluation criteria and assessment and the value of the water entitlements against the Plan’s water recovery targets, would help maintain this confidence.
The Commonwealth has allocated $3.1 billion towards purchases of environmental water to support the delivery of the Murray Darling Basin Plan. To date a total of $2.5 billion has been expended through open tender and strategic buyback.
The Government recognises that you are independent and that the decision to audit, and when, rests with you. However, should you decide to prioritise this audit all documentation and relevant staff will be available to assist.
David Littleproud MP
cc. The Hon Tony Burke MP, Shadow Minister for the Environment and Water