Australian A-G meets with Bank and Fund staff
Posted by Jim Brumby, World Bank
The Auditor-General of Australia, Mr. Ian McPhee, discussed wide ranging issues related to public sector performance and accountability at a joint Bank-Fund seminar held at the World Bank on December 11, 2007. Mr. McPhee drew attention to the importance of openness and transparency, not only in the work of the executive but also in the execution of the work of the Australian National Audit Office (ANAO).
Mr. McPhee drew attention to a number of areas where recent innovations had been helpful in assisting performance and accountability, in particular through the use of
- audit (internal) committees in agencies with independent (non-agency) members,
- certifications by agency chief executives as to the compliance of their agencies with relevant laws, and
- agency governance boards, comprised of agency senior management, that bring collective managerial responsiblity to bear in agency operations
He saw this as part of a trend of reinforcing the responsibility for management on chief executive officers in the context of their ongoing access to managerial flexibility.
He spoke of a number of emerging issues in Australia, such as
- a move to introduce more program-related performance information rather than high level outcomes information, to enable better evaluation of agency performance
- consideration of the whole of government balance sheet, at the same time as reconsideration as to the appropriate way of funding agency capital, and
- the need to establish accountability mechanisms for cross-departmental work.
He said that although accrual budgeting and accounting had generally been seen as very successful, with accrual information especially useful at agency level, cash had tended to receive most focus at the aggregate level.
Mr. McPhee drew attention to some specific work carried out in the recent past by ANAO, including a review of the Regional Partnerships Program. He said that this study had highlighted the need for departments to give good advice to ministers, and for ministers to be conscious of the fact that
under the program, they actually had responsibility for approving specific expenditures under the applicable financial management legislation, and it was therefore important that they appreciated the differences between such decisions and policy decisions. It was also desirable that ministers recorded the basis to their decisions where the reasons were not apparent from the supporting papers.
He also highlighted that ANAO publishes Better Practice Guides, as an aid to better public administration. Guide topics include: Public Sector Internal Audit; Fairness and Transparency in Purchasing Decisions. Probity in Australian Government Procurement; Implementation of Programme and Policy Initiatives; and, Preparation of Financial Statements by Public Sector Entities. These are avaiable on-line at the link above.
Mr. McPhee said that for performance indicators to be useful in decision making and for program evaluation, it was important that they be defined at the outset of a program, and that it was preferable to focus on a smaller rather than a larger number. He also touched on issues of risk management, contingent liabilities, and costing of election commitments under the Charter of Budget Honesty, among other topics. He said that incremental reform agenda in Australia had been successful, with all the preceding steps providing a sound basis to move on.
Mr. McPhee also made mention of the core nature of assurance auditing in providing a foundation of credibility for the undertaking of other audit work, such as performance audits, but that in a capacity constrained environment, it was important for auditors to focus on the core assurance function in the first instance.
Regarding the work of other SAIs, Mr. McPhee noted that IFAC and INTOSAI had signed an MOU that would allow INTOSAI members to adopt private sector international auditing standards for the public sector.
