Auditor-General warns government scrutiny will falter without sustainable funding

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Auditor-General Grant Hehir has written to Prime Minister Scott Morrison to request a “more sustainable basis” for audit office funding, warning scrutiny of government programs will continue to recede without additional resources.

Releasing the Australian National Audit Office (ANAO)’s 2019-20 annual report, Hehir said budget constraints were hampering efforts to meet performance audit targets, to the extent that tasks allocated to the office could not proceed to full implementation without more money.

The ANAO tabled 42 performance audit reports in 2019-20, short of its target of 48.

“Without supplementary appropriations, the number of performance audits tabled in the parliament will continue to reduce,” Hehir warned.

Hehir has asked Prime Minister Scott Morrison to consider more sustainable funding arrangements for the ANAO, which saw revenue from government fall from $70 million to $69.2 million in 2020.

“The ANAO budget is in loss for the third year in a row,” Hehir said.

“This is in part due to investment in new ways of working, including technologies that will improve the efficiency of the ANAO. The deficit also reflects our transition to a lower funding base.”

Hehir said that a request from Finance Minister Mathias Cormann to pilot assurance audits of annual performance statements from Commonwealth entities subject to the PGPA Act was progressing, but would not be able to transition to full implementation without additional funding.

Audit office reports have featured prominently in media reporting about government accountability in recent months, having been the basis for the so-called “sports rorts” saga that led to former sport minister Bridget McKenzie resigning her ministry earlier this year.

More recently, the ANAO criticised the Australian government for its purchase of a $30 million parcel of land to build a second runway at Western Sydney Airport after 2050, finding the property was actually worth just $3.1 million.

The ANAO is currently sitting on a pipeline of potential audits that includes a raft of COVID-19 related measures, including the JobKeeper program and the COVIDSafe tracing application.

“In the longer term, the audit program will need to address the delivery of the intended outcomes of the COVID-19 response, including at a macro level, and we will plan for audits of recovery programs,” Hehir said.