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Monday, 22 September 2014
Page: 9926


Dr SOUTHCOTT (Boothby) (12:04): On behalf of the Joint Committee of Public Accounts and Audit, I present the following reports: Report 444: Annual report 2013-14 and Report 445: Regional Cities Program, KPIs and Medicare—Review of Auditor-General’s reports Nos 10 to 31 (2013-14), and I ask the leave of the House to make a short statement in connection with the reports.

Leave granted.

Dr SOUTHCOTT: The report I have just presented from the Joint Committee of Public Accounts and Audit entitled Report 444: Annual report 2013-14 details the activities of the committee as well as the discharge of its duties. These include:

reviewing reports of the Auditor-General on behalf of the parliament

reviewing the Defence Materiel Organisation Major Projects Report

considering the operation and resources of the Australian National Audit Office and the Parliamentary Budget Office

approving the nomination of the appointment of the Independent Auditor of the Australian National Audit Office

encouraging parliamentary and public awareness of the financial and related operations of government.

The report also details the committee's continuing oversight of the Public Management Reform Agenda. The committee tabled a report in June 2014 into the development of the first batch of rules for the Public Governance, Performance a nd Accountability Act 2013.

Mr Deputy Speaker, I commend the report to the House.

Report made a parliamentary paper in accordance with standing order 39(e).

Dr SOUTHCOTT: The report I have just presented from the Joint Committee of Public Accounts and Audit entitledReport 445: Regional Cities Program, KPIs and Medicare—Review of Auditor-General’s reports Nos 10 to 31 (2013-14) details the findings of the committee's examination of the following four Australian National Audit Office Reports:

Report No. 21, Pilot Project to Audit Key Performance Indicators

Report No. 25, Management of the Building Better Regional Cities Program

Report No. 26, Medicare Compliance Audits

Report No. 27, Integrity of Medicare Customer Data

A key theme across all four reports was the importance of a robust performance framework. The committee is a determined advocate of accurate and effective performance measurement and reporting. As previous committee reports have emphasised, accurate and effective performance measurement and reporting enables the public, the parliament and other stakeholders to assess whether resources are being used efficiently and whether programs and services are achieving their intended results.

Chapter 2 of the report discusses the committee's findings concerning report No. 21 on KPIs. The committee found that Commonwealth agencies have experienced difficulty in developing KPIs that measure the effectiveness of a program's contribution to achieving outcomes. The committee recommended that Finance ensure that performance management and reporting is recognised as a central component of agency governance arrangements and that guidance is clear, consistent and supports agencies in the development of effective KPIs. This will be a particularly important aspect of the new performance framework to be introduced as part of the public management reform agenda and Public Governance, Performance and Accountability Act 2013. The committee commended the audit office on its development of a preliminary methodology to support ongoing audits of KPIs and further recommended that it continue to implement systematic audits of the appropriateness of KPIs and the completeness and accuracy of agency reporting. This has been a longstanding interest of the committee and the committee will continue to monitor the implementation of better KPIs.

Chapter 3 of the report discusses the committee's findings concerning report No. 25 on the Building Better Regional Cities Program. The committee was disappointed in the overall administration of this program. The committee found that the program was implemented in a way that gave insufficient attention to the program's objective and KPIs. The program cost more than had been budgeted; it promised to deliver up to 8,000 homes but actually delivered 247. It delivered significantly less in the way of additional affordable housing than the program target, and many of the contract projects were delayed in delivery. There were also some serious issues relating to the administration of this program.

Given the seriousness of the issues raised in the review, the committee has recommended that every six months for the life of the 44th Parliament the Department of Social Services continue to inform the committee about the status of housing built with the assistance of the program. The committee believes there is much to be learnt from this matter. Accordingly, it is further recommended that both the Department of Social Services and the Department of the Environment conduct a full and frank review of the Building Better Regional Cities Program to increase the effectiveness of future program administration.

Chapter 4 of the report discusses the committee's findings regarding report No. 26 on Medicare compliance audits, including the Increased Medicare Compliance Audits initiative. The committee found that the management of this initiative by the Department of Human Services ultimately represented a net cost to government rather than delivering the anticipated savings. The department did not meet its overall targets against two key performance indicators for this initiative, nor did it develop and implement a methodology to accurately measure, monitor and report on savings achieved against targets. The committee recommended that the Department of Human Services develop a methodology to better monitor performance outcomes and report on the effectiveness of Medicare compliance audits, with the department to report back to the committee on this matter in six months. The committee also recommended that the department undertake a cost-benefit analysis of its Medicare compliance activities to ensure more effective targeting of compliance risks to the Medicare program and increase the cost-effectiveness of its compliance approach.

Chapter 5 of the report discusses the committee's findings concerning report No. 27 on the integrity of Medicare customer data. Over the course of the review, the committee was encouraged to note that the Department of Human Services is working to resolve intertwined and duplicate records in the Medicare database which pose potential clinical safety and privacy risks. However, the committee noted that the department could not demonstrate implementation of previous recommendations made in this area by the Audit Office in 2004-05. It is disappointing that the department missed an opportunity to enhance its performance by implementing these recommendations.

The committee recommended that the Department of Human Services undertake targeted data integrity testing of Medicare customer records, better manage duplicate and intertwined records and implement controls to ensure that only those customers eligible to receive Medicare benefits can access them. Given the length of time these data integrity issues have been evident, the department has been asked to report back to the committee on this matter in six months.

In conclusion, I thank committee members for their deliberation on these significant matters. I also thank departmental representatives who appeared at public hearings for assisting the committee in its important role of holding Commonwealth agencies to account for the efficiency and effectiveness with which they use public monies. I commend the report to the House.

Report made a parliamentary paper in accordance with standing order 39(e).