This edition is intended for officials within government entities responsible for governance, internal audit or a government activity that may be the subject of an ANAO performance audit. The purpose of Insights: Audit Practice is to explain ANAO methodologies to help entities prepare for an ANAO audit.

The Auditor-General is an independent officer of the Australian Parliament and has discretion in the performance or exercise of Auditor-General functions or powers. In exercising the mandated and discretionary functions and powers, the Auditor-General is not subject to direction from anyone in relation to: whether or not a particular audit is to be conducted; the way in which a particular audit is to be conducted; or the priority to be given to any particular matter. The Auditor-General must, however, have regard to the audit priorities of the Parliament, as determined by the Joint Committee of Public Accounts and Audit (JCPAA).

The Australian National Audit Office (ANAO) conducted 44 performance audits across the 2024–25 financial year to provide independent and objective assessments of all or part of an entity’s operations. This report presents themes and insights from the 2024–25 performance audit program, as well as analysis of the outcomes of performance audits between 2020–21 and 2024–25.

The ANAO’s performance audit program is one of the main assurance functions of the Auditor-General. The purpose of this information report was to provide analysis of 2023–24 performance audits.

Welcome to the first edition of Audit Matters for 2026. This edition covers findings from the 2024–25 performance statements audit program, and our series of performance audits on compliance with domestic and international travel requirements. It also outlines key messages from our performance audit examining three outcome areas of the Closing the Gap national agreement — specifically, areas in schooling and early childhood development. You’ll also find updates on our latest insights product and on the development of our upcoming annual audit work program, including the future of the major projects report and auditing in the Defence space.

Across this work, a consistent theme continues to emerge: the importance of getting the basics right. In a constrained environment, our audits continue to identify gaps in foundational practices such as record keeping, procurement and grants administration. These are not new issues, but they remain central to effective public administration and to maintaining trust in the use of public resources, particularly with the public sector’s focus on delivery. Getting the basics right, and knowing that you are, is a key issue to keep an eye on.

Related to this is the importance of lawfulness as a core governance principle. Our audit work continues to highlight that compliance with legislative and policy frameworks is not simply procedural — it underpins integrity, accountability and public confidence in government institutions.

This edition of Audit Matters will be my last as I prepare to retire from the APS on 1 May. I have been privileged to enjoy an expansive career across the public sector — in particular with many outstanding colleagues at the ANAO and beyond — and I wish the next Deputy Auditor-General all the best. Carla Jago will act as Deputy Auditor-General while the Auditor-General makes arrangements to fill the position.

Rona Mellor PSM, Deputy Auditor-General

Audit Practice: Auditing Regulatory Activities is intended for senior management and those responsible for managing internal audit within Australian Government entities that have a regulatory function.

The Auditor-General Act establishes the position of the Independent Auditor, who may conduct a performance audit of the ANAO at any time. The ANAO is also committed to increasing external oversight and scrutiny over the ANAO Quality Framework, including external reviews of the quality framework and completed audits, as considered appropriate.

The intent of performance statements audits is to drive improvements in the transparency and quality of entities’ performance reporting and, in turn, increase entities’ accountability to the Parliament and public.

Welcome to the fourth edition of the ANAO’s Audit Matters newsletter. The purpose of Audit Matters is to provide updates on the ANAO’s work and provide insights on what we are seeing in the Australian Government sector.

Audit Matters complements the range of reports we table in the Parliament as well as our insights products and events and seminars. I hope you find it useful and please forward it on to your colleagues, and encourage them to sign-up for future editions.

Rona Mellor PSM, Deputy Auditor-General

The ANAO responded to the emerging sector-wide risks for public administration by developing a strategy for a program of audits examining the delivery of the Australian Government’s COVID-19 pandemic response (COVID-19 audit strategy). The purpose of this information report was to summarise and consolidate the learnings from the audits and reviews conducted by the ANAO under the COVID-19 audit strategy.

The audit objective was to assess the effectiveness of the Department of Health’s monitoring and implementation of both ANAO performance audit and internal audit recommendations.

Welcome to the second edition of the ANAO’s quarterly Audit Matters newsletter. The purpose of Audit Matters is to provide updates on the ANAO’s work and provide insights on what we are seeing in the Australian Government sector.

Audit Matters complements the range of reports we table in the Parliament as well as our insights products and events and seminars. I hope you find it useful and please forward it on to your colleagues, and encourage them to sign-up for future editions.

It’s no secret that a federal election is due to happen. No doubt your minds will turn to your entities’ preparedness for this event now or in the near future. At the time the election is called, I’ll write out to entities to help people understand how the ANAO operates during an election period.

Rona Mellor PSM, Deputy Auditor-General

Mr Mr Ian McPhee - Auditor-General for Australia, presented to the Public Sector Audit Network Group

Mr Mr Ian McPhee - Auditor-General for Australia, presented at the 5th Symposium of the Asian Organization of Supreme Audit Institutions (ASOSAI), Jaipur, India

The objectives of this audit were to assess planning, management, conduct and staffing of internal audit in the Department of Defence, with a view to providing assurance as to the standard of its work. Opportunities were taken to identify specific policies and practices that would improve the efficiency and effectiveness of MAB audit. Fieldwork for the ANAO audit was performed between May and August 1995.

The objectives of this audit were to:

• provide assurance to the Parliament on the effectiveness of internal audit operations; and
• determine whether internal audit generally operates at, or near, recognised better practice.

The criteria used to measure internal audit effectiveness were based on four principles developed as part of the audit. These principles and criteria deal with the level of management support and authority; the use of a risk-focus to address client needs; the appropriate balance of skills and knowledge; and the use made of continuous improvement processes and measurement of performance effectiveness.

Mr Ian McPhee - Auditor-General for Australia, presented at the Institute of Chartered Accountants in Australia, Audit Conference, Melbourne

Welcome to the last edition of Audit Matters for 2025. I’ve provided some insights in this edition which may help you to focus on a few areas of audit interest in the new year.

Audit work, as you know, is ongoing. We’ll start tabling reports again in mid-late January 2026. Next year you’ll also see some shorter performance audit reports, as part of a trial we’re undertaking to bring reports to the Parliament more quickly. Thanks to those agencies who have worked with us as we trial this new approach. We’re also doing some important work on how we approach performance statements audits in the 21 entities subject to this process. Watch out for our summary report on performance statements early in 2026 — you can subscribe to be notified of release on our website.

I wish you and your teams a restful break over the holiday season after a big year in the public sector. I look forward to seeing you in 2026.

Rona Mellor PSM, Deputy Auditor-General

Welcome to the inaugural edition of the ANAO’s quarterly Audit Matters newsletter. The purpose of Audit Matters is to inform external audiences — primarily those working in Commonwealth entities — of updates on the ANAO’s work and provide insights on what we are seeing in the Australian Government sector.

Audit Matters complements the range of reports we table in the Parliament as well as our Insights products and events and seminars. I hope you find it useful and please forward it on to your colleagues, and encourage them to sign-up for future editions.

Carla Jago, Acting Deputy Auditor-General

The ANAO provided an article to the March 2023 edition of the PASAI newsletter on the development of a methodology for auditing ethics. The article was titled SAI Australia develops methodology for auditing ethics.

The Australian National Audit Office (ANAO) Audit Manual is issued under the authority of the Auditor-General and is comprised of four volumes. The four volumes (shared content, FSASG specific, PASG specific and PSASG specific) set ANAO policies and provide guidance applying to the audits and other assurance work performed by, or on behalf of, the Auditor-General, and consistent with ANAO Auditing Standards.

The manual complements the mandatory requirements of the ANAO Auditing Standards and relevant legislation. The manual is reviewed annually and is subject to the oversight of the ANAO Quality Committee.

Welcome to the third edition of the ANAO’s Audit Matters newsletter. The purpose of Audit Matters is to provide updates on the ANAO’s work and provide insights on what we are seeing in the Australian Government sector.

Audit Matters complements the range of reports we table in the Parliament as well as our insights products and events and seminars. I hope you find it useful and please forward it on to your colleagues, and encourage them to sign-up for future editions.

Rona Mellor PSM, Deputy Auditor-General

Welcome to the latest edition of Audit Matters. In this edition, we reflect on the 125th anniversary of the legislation that established the position of the Commonwealth Auditor-General, and share lessons from our latest reports and insights products, including the importance of integrity and ethical behaviour in auditing. We also outline developments in our strategic planning and look more closely at what makes performance information meaningful.

This is my first edition of Audit Matters since being appointed Deputy Auditor-General in July. Having spent more than 28 years working across public sector auditing, governance and organisational leadership, including leading both the ANAO’s financial statements and performance audit services groups, it is a privilege to take on this role. I look forward to continuing to work with entities across the Australian Government sector to support transparency, accountability and improved public sector performance.

I’d also like to acknowledge my predecessor, Rona Mellor, for her leadership and contribution to the ANAO and the wider public sector. I was fortunate to work closely with Rona and wish her all the best in retirement.

Audit Matters provides an important opportunity for us to share practical lessons from our work and highlight issues that may warrant attention across the sector. I hope you find this edition useful.

Carla Jago
Deputy Auditor-General

This report addresses the role and responsibilities of audit committees in all Commonwealth public sector entities including departments and similar agencies, and commercial and non-commercial statutory authorities. A better practice model was developed, based primarily on a review of literature dealing with private and public sector governance models and the requirements of the proposed financial management legislation.

Audit Focus newsletter was published between October 2005 and October 2014, with a purpose of sharing lessons from ANAO audit work. These newsletters have now been archived from the ANAO website and are available through the National Library of Australia using the links provided.

Mr P.J. Barrett (AM) - Auditor-General for Australia, presented at the Forum of Commonwealth Agencies Seminar, Sydney, NSW

Grant Hehir, Auditor-General for Australia, attended the 18th Meeting of INTOSAI Working Group on Environmental Auditing in Bundung Indonesia in July 2018, and presented a keynote address titled Sharing experience on auditing urban environmental management. The accompanying paper to the speech is available here.

The objective of the audit was to assess the effectiveness of Defence’s monitoring of the implementation of ANAO and internal audit recommendations. The audit also examined a sample of ANAO and internal audit recommendations—reported as being complete by Defence—to assess the extent to which these recommendations had been implemented by Defence.

The objective of the audit was to assess the effectiveness of the Department of Human Services' management of Medicare compliance audits.

The ANAO provided a case study to SAI Russia, as a follow-up to the Moscow Declaration SAI Russia is publishing a collection of case studies and best practices of strategic approach to public auditing. The case study was titled Using data analytics for risk-based performance audit planning.

The audit objective was to re-assess the three entities' compliance with the 'Top Four' mandatory strategies in the Australian Government Information Security Manual (ISM). The audit also aims to examine the typical challenges faced by entities to achieve and maintain their desired ICT security posture.

The audit objective was to assess the effectiveness of the Department of Veterans’ Affairs monitoring and implementation of ANAO and internal performance audit recommendations.

The general objectives of the audit were to:

• obtain and report quantitative and qualitative benchmarks of performance in the public sector; and
• compare the public sector benchmarks with equivalent international data to identify better practices and highlight opportunities for improvement.

In relation to internal audit, given the three-year duration of the study, these generic objectives have been extended to include an analysis of trends in internal audit over the past three years.