Department of the Environment and Heritage, 2004
ISSN 1441 9335
Management and accountability (continued)
- Courts and tribunals
- Auditor-General reports
- Parliamentary committees
- Office of Regulation Review
Courts and tribunals
There were no judicial or administrative tribunal decisions in 2003-04 that significantly affected the operations of the Department. For more information about case law developments in 2003-04, see the reports on the operation of various Acts administered by the Department under 'Other reports'.
- Report No. 24: Agency Management of Special Accounts, tabled 31 January 2004
- Report No. 31: The Senate Order for Departmental and Agency Contracts (Financial Year 2002-2003 Compliance), tabled 26 February 2004
Apart from the report on financial statements, the following Auditor-General reports were tabled.
Report No. 24: Agency Management of Special Accounts, tabled 31 January 2004
The Australian National Audit Office conducted an audit of all special accounts (and their predecessors) that have existed at sometime during the time since the Financial Management and Accountability Act 1997 commenced operation on 1 January 1998. The audit objectives were to:
- identify all special accounts that have existed;
- assess the efficiency and effectiveness of the establishment, management and abolition of these special accounts; and
- assess compliance with the legislative requirements (including those of the Financial Management and Accountability Act 1997 and the Finance Minister's Orders promulgated under that Act).
To address the first audit objective, the audit commenced with a census of all Commonwealth agencies. This was combined with analysis of each reported special account to confirm that the account existed at law, and had been properly disclosed by the relevant agency. The second and third audit objectives were met by an assessment of the overall governance framework for special accounts, together with a detailed examination of the management of 19 special accounts administered by six agencies. These 19 special accounts had reported closing balances totalling $1.23 billion as of 30 June 2003, with total reported transactions (credits and debits) of $7.60 billion during 2002-03.
In terms of the audit objectives, the Australian National Audit Office concluded as follows:
- there had been uncertainty since the introduction of the Financial Management and Accountability Act
- 1997 about the number and identity of special accounts that exist. After detailed examination of all available records, the Australian National Audit Office found that a total of 297 special accounts had been established since the Financial Management and Accountability Act 1997 commenced. Of these, 56 had subsequently been abolished, leaving 241 accounts in existence as at November 2003;
- many agencies needed to improve their management of special accounts. There had been widespread non-reporting of special accounts, and significant inaccuracies in the financial disclosures on some of those accounts that have been reported. Further, appropriation management procedures were found to be inadequate in a number of agencies; and
- there had been non-compliance with a number of legislative requirements. This included those provisions of the Financial Management and Accountability Act 1997 (and subordinate legislation) relating to the management of appropriations, the keeping of proper accounts and records, and the reporting of all special accounts. There had also been inadequate understanding within agencies of, and non-compliance with, aspects of the legislation that has established particular special accounts. This included where legislation required amounts to be credited to a special account.
The results of the audit were that deficiencies were identified in the management of 12 of the 19 special accounts examined in detail by the Australian National Audit Office. This included special accounts not being credited with amounts that legislation required to be credited and debits being recorded against special accounts that were outside the specified expenditure purposes of the account. Inaccuracies in the reported balance of seven special account appropriations were one consequence of the deficiencies identified during the course of the audit.
The audit demonstrated that there was significant scope for agencies to improve their financial management and reporting practices for their special accounts. The improvements to special account disclosure requirements and the development and publication in October 2003 of Special Account Guidelines by the Department of Finance and Administration have provided a stronger platform for enhancing the financial management, reporting and transparency of special accounts. The Australian National Audit Office made 13 recommendations to improve management of, and accountability for, special accounts.
The recommendations of the report that were relevant to the management of the Department's special accounts have been implemented.
Report No. 31: The Senate Order for Departmental and Agency Contracts (Financial Year 2002-2003 Compliance), tabled 26 February 2004
The objectives of the audit were to assess agency performance in compiling the Internet listings required by the Senate Order and the appropriateness of the use of confidentiality provisions in Commonwealth contracts.
The focus of the audit in relation to confidentiality was on the commercial information that could be reasonably protected as confidential information. The Australian National Audit Office recognised, however, that agencies might have reported confidentiality for other reasons, such as for information with a national security classification, or personal information.
The Australian National Audit Office found that, by the time the audit was completed, 78 Financial Management and Accountability Act agencies had either placed a list of contracts on their websites, or did not have any contracts that fell within the scope of the Senate Order. The majority of lists generally complied with the requirements of the Senate Order, although there was scope for agencies to improve the presentation of the lists and to ensure that all details required of the Senate Order listing had been met.
In relation to the six agencies subject to detailed audit, all had placed a list of contracts on their web site by the due date. For five agencies, the Australian National Audit Office concluded that the processes used to compile the Internet listing were generally likely to lead to the lists being complete in terms of the number of contracts listed.
Six of the selected agencies had revised, or were in the process of revising, elements of their general contracting practices, policy guidance, tender documentation and contract templates to reflect the changes to government policy. These changes, amongst other things, require both parties to a contract to agree what information, if any, should be protected as confidential prior to the contract being entered into. However, as identified in previous Australian National Audit Office audits of the Senate Order, the understanding of how to implement these changes was not uniform across, or within, agencies.
The Australian National Audit Office reviewed 30 contracts that were listed, or should have been listed, on the Internet as containing confidential provisions to determine whether they had been listed appropriately. The Australian National Audit Office considered that only five (17 per cent) of the contracts contained information that was likely to satisfy the criteria for protection as confidential information. In previous audits, the percentage of contracts that the Australian National Audit Office considered had been appropriately listed ranged from 15 to 38 per cent. In previous audits, the Australian National Audit Office also recognised that agencies had difficulty in changing procedures to implement the new accountability framework. This was largely because formal Department of Finance and Administration guidance on how to determine the confidentiality of contractors' commercial information had not been available at the time the contracts had been negotiated.
However, in this audit, the majority of contracts selected for review had been entered into after the Department of Finance and Administration guidance had been issued. As a result, the Australian National Audit Office considered that a larger percentage of contracts should have been appropriately listed as containing confidential information. The results from this audit highlighted the need for all agencies to continually review their policies on the new accountability framework so that they accord with the government policy of the time. In addition, agencies should make sure that the policies are known, and acted upon, at all levels within the agency. This reinforced the need for an ongoing effective awareness-raising regime.
The recommendations of the report that were relevant to the Department's management of the Senate Order have been implemented.
On 1 December 2003, the House of Representatives Environment and Heritage Committee tabled its report entitled Employment in the Environment Sector: Methods, Measurements and Messages. The Department has been charged with developing a government response to this report. Several of the key recommendations of the report have been overtaken by government decisions.
On 14 October 2003, the Senate Environment, Communications, Information Technology and the Arts Committee tabled its report entitled Regulating the Ranger, Jabiluka, Beverly and Honeymoon Uranium Mines in both houses of the Parliament. The report includes recommendations relevant to the Department's work. The Department of the Prime Minister and Cabinet has referred the committee's report to the Department and as at 30 June 2004 the Department was in the process of developing a government response.
Office of Regulation Review
The Office of Regulation Review advised that the Department was fully compliant with the Australian Government's regulation impact statement requirements.
No reports were made.