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Tuesday, 7 December 1976

Mr Garrick (BATMAN, VICTORIA) asked the Prime Minister, upon notice:

(1)   Is the extensive number of examples of wastage and discrepancy, brought to light in the Report of the AuditorGeneral for 1975-76, a result of Public Service mismanagement, or, as has been suggested, illegal management.

(2)   Will he take action to ensure that misappropriation will be eliminated.

Mr Malcolm Fraser - The answer to the honourable member's question is as follows:

(1)   and (2) The examples of wastage and discrepancy referred to in the Auditor-General's Report were due to a variety of factors. The number of criticisms contained in the 1975-76 Report does not necessarily mean that there has been a significant deterioration in departmental accounting standards. The honourable member's attention is drawn to Section 3 of the Auditor-General's Report (page 143) under the heading 'Summaries of Audit Observations and Results of Audit Representations ', viz-

Over the years it has proved practicable to settle many of these queries, particularly those of a minor nature, at operational levels. This has contributed materially not only to the maintenance of a generally satisfactory standard of accounting but also to improvements in departmental accounting practice. Generally any remedial action required by departments is taken without undue delay'.

It may be helpful if I add that there is in fact a continuing liaison between the Auditor-General's Office and departments. I have already indicated what happens at the operating level. Where there is a more serious departure or a failure to correct a minor deviation within a reasonable time, the Auditor-General's Office writes formally to the department concerned and the department is bound to advise the Auditor-General's Office that the matter has been rectified or what progress is being made to do so. The final step is inclusion of the matter in the Auditor-General 's Report.

The elimination of waste and inefficiency in the Commonwealth Public Service is a constant aim. To this end, the Treasury has followed its normal practice and initiated follow-up action in relation to various criticisms and significant observations made in the Auditor-General's Report. Quite apart from the role of the Auditor-General, the Treasurer has responsibility for ensuring that Treasury Regulations and Directions provide for sound accounting procedures. Where it is established that these are defective, appropriate action is taken to amend them.

The Public Service Board has a continuing responsibility under the Publice Service Act for the efficiency and economy of the Public Service and, in accordance with its statutory responsibilities, takes such action as is necessary as a result of the Auditor-General's Report or as a result of its own observations. Specifically the Public Service Board is about to conduct an efficiency review of the internal audit function in the Service. The objectives will be to determine the effectiveness of the function and whether the internal audit concept needs to be redefined in terms of the requirements of management, having regard to the changes in management systems and techniques which have taken place in recent years. The review has the support of the Auditor-General.

The review will be carried out by an interdepartmental team led by a management consultant from outside the Public Service. The team will examine the internal audit operations of five departments, which have more than half the total internal audit positions in the Service, and which provide a fair sample of various work situations.

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