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Rural and Regional Affairs and Transport Legislation Committee
23/05/2017
Estimates
INFRASTRUCTURE AND REGIONAL DEVELOPMENT PORTFOLIO
Australian National Audit Office

Australian National Audit Office

Senator GALLACHER: We have the laypeople back. I want to address that particular point, because all my experience with audit—and I did only 16 of them—was to provide the appropriate documentation underpinning the activities of the organisation: the appropriate delegations, records, minutes and invoices to substantiate expenditure or decision-making. It is extraordinary that someone would put on the public record that an auditor needs to interview people to ascertain the decision-making of the organisation. I think you would normally expect to find that in documentation, would you not?

Ms Mellor : Correct. I would make two points in response to the broad comment that you made. First of all, in the conduct of an audit we operate against audit standards. That includes a requirement to understand the business that we are auditing and to establish appropriate audit evidence on which to make findings and conclusions. We also have statutory processes which involve our engaging with an entity—entry interview, issues papers, exit interview, section 19, draft report et cetera. I would not want the committee to think that during the course of this audit our auditors were not on site looking for evidence or were sitting back in the Audit Office not engaging with the business, because that is not correct. I might add that with a procurement of this size we put very experienced auditors onto the program. In fact the auditor in this case has done billions and billions of dollars worth of audits on grants and procurements.

In terms of evidence it is not just what we are looking for as an auditor. The parliament sets rules by which entities must behave in keeping records: the Archives Act, PGPA Act et cetera. Rules are then set by the government, and the CPRs themselves bring an expectation that you must keep records commensurate with the scale, scope and risk of the procurement under way. In any event, good record-keeping is good business management and good risk management. We are not expecting people to keep records just to satisfy the Auditor-General; there are standards and laws that are set for people to keep records. In this case they could not be found in relation to a number of matters.

In respect of the probity issues you engaged and inquired of the previous witnesses and ourselves, detail is set out in the first audit insofar as the relationship between Airservices and ICCPM was concerned. In the second audit we are observing that the design of the governance arrangements around the procurement were appropriate and guarded against potential conflicts. I draw your attention to 2.41 in the audit report. The role of the lead negotiator that you were inquiring of earlier was not forefront of this audit. We were looking at the conduct of the tender insofar as there was governance, record keeping et cetera. That is not to say they are not connected and certainly in the series of reports we have covered that at length in the first audit.

In answering finally the broad points that were made, I think it is fair to say that by virtue of the poor record keeping evidencing the cost price adjustments that were made, what we see is a process that was not transparent or robust in that risk adjustment process and the outcome, as per the box on page 36 or I might draw your attention specifically to the conclusion in the audit report on page 8: 'It is not clearly evident that the successful tender offered the best value for money.' The absence of a documented process that justified the price adjustments does make it difficult for the auditor to call clearly value for money or not.

Senator GALLACHER: The CEO's contention was that specialist people looking at specialist areas discussing these matters did not resolve that, but they had had the appropriate discussions at their level but did not actually minute it and say why they were going a particular way.

Ms Mellor : That is clearly what we found. The organisation proffered to you that we did not talk to anyone. We are looking for records in procurement that evidence decision making and are contemporaneous to the decision-making process. Interviewing people after the fact—there were many involved—is not quality evidence against our standards.

Senator GALLACHER: That is exactly what I was trying to capture when I had that line of questioning. If you ask me for my recollections of a meeting six months ago, without contemporaneous notes they are unlikely to be accurate. That is just human nature. That is why we have minutes of notes.

Dr Ioannou : The key is the contemporaneous record of course. While the procurement rules do not apply in this case they set some good guidance, even for entities of this sort, around how to maintain transparency and accountability. In these sorts of processes, good record keeping is the basis for that and contemporaneous record keeping is, of course, the basis for an evidence based process such as an audit.

Mr Simpson : If I could just elaborate on that specific issue of monetising the risk assessment. The relevant section is on page 38 of the report. What we were looking for were clearly defined processes and communicated processes about how that would be undertaken and then the documentation of the delivery of that process—so the two elements that you would expect in a procurement process. Tender evaluation plans generally set out quite detailed arrangements and requirements to be complied with and then normally they are assessed against that.

In relation to the exercise undertaken by the tender evaluation committee, we found that there was no planned methodology for how this analysis would be undertaken. We could not identify that it had been clearly flagged to tenderers or set out in the tender evaluation plan that such an analysis would be undertaken. Further, the risk adjustment activity undertaken by the committee was not subject to probity scrutiny—so another key control in a procurement process that if you are undertaking an activity, then it is part of the probity considerations. As we mentioned earlier in the report, that element was not considered. When we raised this matter with Airservices, they advised us that there was limited evidence that the tender evaluation committee members agreed to the method of the cost risk adjustment activities. Again, not just going on paperwork; we went back to the organisation to confirm the understanding that we had and the confirmation we got that there was limited evidence to indicate that that had been the agreed methodology.

We also go on to highlight some of the inadequacies in the records in paragraph 3.57, where we lead in by saying:

Further, the TEC's adjustment of tenderer prices to reflect its assessment of risk and contingency was not undertaken through a transparent and accountable process.

While there were minutes taken of those meetings, they were generally setting out 'the duration of each meeting, the people involved and the decisions reached'. Importantly, 'The meeting minutes provided little insight into the analysis that was undertaken, or the factors taken into account.' So we can see a decision that has been taken from the records, but what informed that decision was not available from those records.

I think the other point that I would make is that later on, when a board member questioned the process, that board member was advised that the relevant information that he needed to refer to was in the attached spreadsheets. As part of this audit, we analysed those spreadsheets, and there is quite a detailed table, table 3.1 on page 40, which highlights what the financial evaluation working group's findings were and then the changes made by the tender evaluation committee. We can see, in a number of cases, no evidence to indicate why amounts were changed or why risks were changed between those two assessments. As Ms Mellor and Dr Ioannou indicated, our understanding is that, for a procurement process of this complexity, there are a number of requirements around contemporaneous record keeping, and we were not able to see those to form our judgement. On that basis, we cannot confirm the appropriateness of those processes, because we do not know the underlying decision-making process.

Senator GALLACHER: Was the board member satisfied at the direction to go to the spreadsheet?

Mr Simpson : We say in paragraphs 3.61 and 3.62:

In response, the TEB was advised by a member of the TEC that: 'the complete analysis was presented in annexes to the Phase 3 TEC Report' … The TEB relied on the TEC member's assurance for the criterion 4 evaluation method and subsequently approved the TEC's recommendation.

That highlights that they relied on that advice.

Senator GALLACHER: All board members are different, but they might have seen that as validation of a correct protocol which you found not to be substantially visible. It might be visible and it might be appropriate, but you cannot see it in hindsight. There are no notes or decision-making records.

Mr Simpson : Again, the end decision is not enough in itself unless you can understand what factors contributed to that decision.

CHAIR: The only people, it would seem, who could mount the case for the process despite the lack of transparency and the failure to communicate properly would be those individuals who are defending their own decision. There is no way to independently evaluate. We know that, because you have given evidence to that effect. So, even if we go back now to interrogate individuals on this issue to try to dig down, we can only work with individuals who made the decisions.

Ms Mellor : I think that is part of the difficulty when you do not have clean records with reasons for decisions in them. People's recollections are framed against the passage of time.

CHAIR: Confession is good for the soul, but it is not often practised. I think we have to ask some serious questions here. Let me ask these questions, first of all, before I put something to you. Knowing what you know about the evaluation process, can this process be backed up—before I ask you whether it should be backed up—without throwing the baby out with the bathwater, if they have to go back to a point where, up until then, everyone is reasonably satisfied that due process has delivered a fair and equitable assessment? I have a thing that I do with my son in business. We get a blank sheet of paper and one of those big black felt pens and, for everything bad about something we are about to make a decision on, we put a dot on the page. It soon becomes evident that maybe this is not something you should pursue. This here has so many features, going all the way back to the governance issues in the first tranche of your work. I am just at a point where I am concerned. With a billion-dollar tender, we are now negotiating with the only one left standing. We do not even have competitive tension left in the place. Is there a way that this process could be rewound back a notch, or two or three notches, back to phase 2, and for us then to move forward again with better processes?

Ms Mellor : I might get Dr Ioannou to speak to that. I think the difficulty is that we cannot call it either way because of the lack of evidence. Whether a procurement can be unwound is a difficult sort of technical question for procurement specialists that work in the law and the guidelines more deeply. Dr Ioannou might have a view about that. The difficulty is that it is hard to see without the evidence about the pricing adjustments what actually went on other than that there were prices or amounts put against different risk factors as per table 3.1.

CHAIR: Do you know whether Mr Bradfield is still involved in this part of the process?

Ms Mellor : I think we can cross-reference between the timings on the two reports—

CHAIR: I think there is evidence that he was and that it was only—

Ms Mellor : I think Mr Harfield said in his earlier evidence that the contract with that person ended in October 2015. Some of this was happening in that time frame.

CHAIR: I think he said he was there past phase 4. There is some talk that he—as a consultant.

Ms Mellor : I have to say against the background that the governance structure—by having multiple committees, multiple people, evaluation criteria et cetera—puts in place some risk mitigation for some of the issues that were raised before.

CHAIR: It does Ms Mellor, but wouldn't you agree that if you were designing a system—and they have been alerted to the potential conflict; I do not want to reflect upon Mr Bradfield; he may be a wonderful man—to leave someone in the process all the way to the end, you can influence processes without apparently having a conflict or demonstrating a conflict of interest? You can build relationships and subtly do things and make a suggestion, plant seeds and do all sorts of things.

It is of real concern to me that we are now about to spend a billion dollars that this process is here to oversight and we have got all these features left in it. I used the term earlier that it was 'untidy'. You cannot give us an assurance that we got value for money. You cannot give us an assurance whether there was subjective behaviour on the part of decision makers because you do not have sufficient records to do it. There are important issues in your evidence that is contradicted by Airservices. They are not in total agreement with your findings. We are not going to ask you to express an opinion but—

Ms Mellor : I certainly would not give you one.

CHAIR: No, I appreciate that, otherwise I would have asked you by now. The fact of the matter is, I suppose, technically can it be rewound to a point where we think we are back onto safe sand?

Senator GALLACHER: Can I just add to that. I am really concerned that Defence's liability in this is not quantified. I did not quite understand the CEO's contributions where they are up for $600 million when you have made comments about their liability. Is there an undefined amount of expenditure here where we have ended up with a sole person in the—there is no competitive tension. And it might be $1.2 billion if they are both putting in $600 million.

Dr Ioannou : I do not think there is a liability just yet. There is no contract. In a sense, we are in a policy space around what sort of budget, for example, Defence might have access to and what the government approvals are. We are more in a policy space than a legal/financial liability space there. So they are probably decisions for government and for Defence to think through.

Senator GALLACHER: What is the situation with Defence? They have committed $255 million and that is it?

Dr Ioannou : It is not clear to me what they have committed. A commitment has got a technical aspect to it—that is, one enters into a commitment when one contracts. I think they have an understanding. I recall there was a written understanding with Airservices Australia. That is an interesting proposition because normally Commonwealth entities cannot contract with each other, but I note that Airservices Australia is a body corporate with a separate legal persona. I am not going to offer you legal advice, but Defence has to consider the consequences of any written agreement it has with Airservices Australia.

Senator GALLACHER: But it appeared to be like a fifty-fifty deal.

Mr Simpson : Senator, I think my understanding is that in relation to the common elements of the system there is a commitment of a fifty-fifty with a $255 million commitment from Defence. Each party will have specific elements of that system that they will have to fund. And I think that is the difference between where Airservices is heading with their business case and where Defence is heading with their second-pass approval arrangements, which we mention in the report.

CHAIR: But on the evidence to date, it would suggest that the potential liability to the defence department for this nefarious aspect of it—that is not yet defined; they have not even finally settled their mind on it—is greater than their contribution to the core elements of this. If we are talking $600 million that they have got set aside somewhere to do this, and it is only $250 million with respect to the core components, there is another $350 million that is off to the side here.

Senator GALLACHER: It complicates all of the tender process if we do not know who is contributing what. And how is Defence interacting in this? Are they on the table?

Mr Simpson : They are involved in virtually all aspects; through the evaluation process, they have representatives through that evaluation process. I think one of the points that we did make in the audit report is that there is not a joint business case—or was never a joint business case—for what was to be a harmonised system. Each created their own business case for that process. So we have highlighted that as an issue as well, in the process; and the importance of a business case, and the importance of a contemporary business case moving through, as circumstances change.

Senator GALLACHER: So next week at the foreign affairs, defence and trade estimates hearing, if Senator Back and I ask: 'What is your contribution to OneSKY, and what do you think of the Audit Office's report into the process to date?'—will they be able to form a view? Or are they in some sort of contractual or legal situation where they are not able to comment?

Ms Mellor : No, they are able to comment. They certainly saw a copy of the draft audit report before it was tabled; they have got commentary in the report. It does not say very much—it is acknowledging the findings and notes the ANAO has not made any recommendations. They are actively involved in it. Throughout the course of the period of time, they have been doing their own gate-approval processes, and they have been briefing the minister. So Airservices is acting, if you like, as the lead agency, with Defence as part of the procurement, and they have certainly been participating in the tender evaluation process. It is a big contract. They will be briefed.

Dr Ioannou : They are not a passive party to this.

Senator GALLACHER: Just stepping back a bit so that we can get this into focus: you have what I might call sophisticated tenderers. That is fair, in the space. They have all the documentation available to them for the tender process, and we get down to a shortlist of three, two of whom were never going to qualify, it would seem, to get to the finish line. They were just never there. It was not a case of, 'now we are down to three equals and we will look at the money'. These entities were not equal. We have established that they have probably spent significant sums of money—in the millions—to prepare their tender. How could you get it so wrong? And, when you were looking at this, how could one assess themselves so poorly that they are 100 per cent out—on a tender that is going to give us, allegedly, value for money?

Ms Mellor : You are asking us to stand in the shoes of—it happens. I think it is fair to say it happens.

Dr Ioannou : Free market.

Senator GALLACHER: That would be one remote explanation. One of the questions—

Ms Mellor : I think different companies' propositions may have been weighted in their own minds differently against the strengths that they have.

Senator GALLACHER: We are not—

Ms Mellor : I take your point on the price, Senator.

CHAIR: Ms Mellor, we are out by $600 million. My question is: as this process went along, did you see any evidence—and it may be that you did not, because we know that there is evidence you wanted that you did not see—where there started to be an organic variation of the things that are required?

Two-thirds of the way into the tender process, they discovered this and that and they evaluate it on that basis, while the tenderers may never have known in advance that that was going to be an assessment line.

Mr Ioannou : Chair, one thing that struck me was that there was actually a multistage process, which was in part I think designed to generate interest in the market and also to help the entities work out who was out there and what their strengths were. To be fair, the process was actually constructed in a way to try to flush out the sorts of issues you are raising.

CHAIR: But that is not what I have asked. I am asking: in terms of how the assessment was happening—and we seem to have got into a phase where, in the absence of any evidence to the contrary, we have a really subjective element to this as we are getting towards the end. There is a subjective element to it. As a tenderer, could I have even known that I was going to be assessed on the colour of my eyes?

Mr Ioannou : No, I think you are referring again to the risk adjustment process.

CHAIR: Yes, of course I am.

Mr Ioannou : As we have said a number of times now, this was not a process that was disclosed to the market, if I can put it that way.

CHAIR: Then, as an auditor, doesn't that take the level playing field and make it less level? Doesn't that corrupt the process to a point where we will never know whether we have value for investment here? At some stage someone is going to have to stand up here, whether it is out of your office or out of Airservices. This is a serious—

Mr Ioannou : I think the Audit Office as called—

Ms Mellor : I think we have said it. If you have a look at paragraph 9 of our conclusion, we say up until late in the process things went along with competitive pressure through the planned phases.

CHAIR: Can you refer me to the page, please?

Ms Mellor : Page 8, paragraph 9. The conclusion, if you like, in an auditor's terms is weighing up the summation of all evidence and asking, 'What does this show you?' In paragraph 9 it says:

It is not clearly evident that the successful tender offered the best value for money. This is because adjustments made to tendered prices when evaluating tenders against the cost criterion were not conducted in a robust and transparent manner.

'Robust and transparent' meaning well documented, a methodology that was clear. And 'transparent', meaning the market knew that this process was going to happen and it was well documented. From our perspective, this travels along in good governance, in good design, up until a point and then there is a process that is not well documented, there is no clear methodology and results in an outcome as described in paragraph 9:

Those adjustments meant that the tenderer that submitted the highest acquisition and support prices was assessed to offer the lowest cost solution—

and then the affordability issue. But, in terms of your characterisation of the process, that is where we have got to. We cannot call it beyond what we have said in the conclusion in paragraph 9.

CHAIR: The only way to rectify this is to go backwards until you get to a point where the process has been solid to there—

Senator STERLE: Or change it.

CHAIR: and then recommence the evaluation.

Ms Mellor : We are not recommending that.

CHAIR: But why not, Ms Mellor? It is the obvious—

Mr Ioannou : Chair, it sounds trite to say that we are auditors rather than advisers or policy advisers or process advisers. It is the simplest way I can put it. We are just not in the business of offering people advice on what are, frankly, extremely complex processes with some legal implications now, of course. We offer an audit opinion but not consultancy advice on the steps forward.

Senator STERLE: Chair, can I just think aloud amongst ourselves?

CHAIR: Yes.

Senator STERLE: This is the problem, you see, when there is an audit that comes out and it is not glowing. We are talking about possibly a billion dollars or more of taxpayers' money and no-one gives a stuff because no-one is accountable.

CHAIR: I am not sure that that goes to them, but—

Senator STERLE: No one is going to get the arse. No one is going to get their nose pulled. They just go, 'Bury it under this, move along; she'll be right. Mr million dollar man's okay.'

CHAIR: We are left with a position that the appropriate body who could give that advice would be Airservices. To say to the government, 'We've got to a point; we've got these evaluations by the ANAO and other issues. We do not see that there is a lot of confidence to where we have got to. We should go back to stage 2.3, or 3½.

Ms Mellor : Airservices is not accountable to us; they are accountable to the government—

CHAIR: No, that is right. I am trying to flesh out whether there is someone else—like the next-door neighbour. Should they, who are looking in through the window, should the department of agriculture—

Ms Mellor : The secretary pointed out earlier that the statutory authority reports to the minister. That is the relationship of the accountability that matters, at one level, and the second point is that parliament is taking an interest in this. We have tabled a report. You have called us here. You have spoken to the CEO of the organisation, the accountable authority of the organisation as well, I believe. The chair of the board has appeared as well; the Auditor-General. You are taking an interest and you yourselves as committees make recommendations as well. So the parliament as an institution is not devoid of any action here itself.

Senator STERLE: Well put.

CHAIR: Where do you fit, Mr Mrdak, in this now? These people report to you.

Mr Mrdak : They report to the minister. We will provide advice, as we have done, to the minister on the outcomes of the audit. As Mr Harfield indicated, the board is working its way through the stages. They are looking to complete this process and the board is briefing the minister.

CHAIR: But that is what frightens me. They are looking to complete a process where we have found a series of quite significant soft spots up until there.

Mr Mrdak : I suppose the question really becomes: are those issues in the process tantamount to being sufficient to cease the process where it is now, given the pressing need, and would the results have been different had better procedures—which Mr Harfield has acknowledged—been operated?

CHAIR: If that means a can of Coke is going to cost 90c instead of 85c I would go with you, but we are dealing with one tenderer who says that with all the knowledge we have we can do this, in accordance with the guidelines that have been laid down for us, for $600 million. And we have another one saying it cannot be done for $1.2 million—billion, sorry.

Mr Mrdak : I think the evidence you heard before lunch from the CEO indicated that, in their view, it remains within the budgeted envelope or their forecast envelope. It is an area you may wish to take up further with him. At this stage, that issue seems to be managed by the board.

Senator STERLE: Just to clarify, this has been going on since 2009. Is that right?

Mr Mrdak : I think the evidence of the planning of work had gone back that far, but the tender and evaluation process has largely been running since about 2014.

Senator GALLACHER: I suppose, just to answer your point, the only chance we get to follow appropriations, which we all wave through the Senate, is when you do your work, not to point too fine a point on it. That paragraph 9 says that everything went swimmingly well up until then and, suddenly, the highest tenderer became the successful tenderer, because adjustments were made that were not visible. That looks like a fit up to the person who walks up to the local pub or shop and spends their weekly wages. How do we explain something like the highest tender became the successful tender because adjustments were made that were not transparent to the processes? And it suddenly became the cheapest tender.

I'm going to frame that paragraph and put it up on the wall so that when I walk out the door every day I get a sense of what actually happens in these huge procurement processes! Right at the end of the process someone decided—and not visibly—that the highest tender was the lowest tender. That is what you are telling us. And you are saying that you cannot see how they did that, but that's what happened.

Ms Mellor : That is right, and I think—

Senator GALLACHER: And a nod, sorry Doctor, doesn't get in the Hansard!

Ms Mellor : I think a yes gets in the Hansard. That is the conclusion we drew through the course of this audit. Table 3.1 of sets out the analysis of the material that was in front of the TEC at the time and demonstrates some of the differences between what went on in the working group and what went on in the TEC. From that you can see how different amounts were weighted against different things by the TEC. Our problem was that the rationale for that is not clear.

Senator STERLE: Whenever I had an audit delivered to my office for my committee to approve, it had the accounting standards and a fairly straightforward statement about cash accrual and all that. But it also said, 'We inspected the records on a test-analysis basis'—you know, the general accounting standard. Can I suggest that that should go into the front of your audit?

Ms Mellor : It actually does. We include a paragraph in each of our audits about the examination—

Dr Ioannou : It says, 'Conducted in accordance with the auditing standard'. There is a standard for that.

Senator STERLE: I suggest you tell the CEO to read that—that he should not come in here and insult this committee by saying that the Audit Office just did not speak to enough people. That is insulting.

Dr Ioannou : I think you have done that yourself, very eloquently. It does not need my help.

CHAIR: I would not use the word 'eloquently', but he certainly got the message.

Ms Mellor : We quite often get feedback from around the sector that we did this or we did that. We follow standards in everything we do. The Auditor-General would not have signed off a report to the parliament if he were not convinced that there was a complete and accurate set of records on which to base conclusions or that the audit had not been conducted against standards. In tabling it to the parliament, under his act, he is assuring you of the quality of the work.

Senator STERLE: Mr Mrdak, I could not put it any better than Senator Gallacher just put it. When all is said and done, who holds the big stick to say to Airservices, 'Please explain to the government, explain to the committee and explain to the Australian taxpayer how everything was going wonderfully well and all of a sudden things were done that would not pass the pub stink test'?

Mr Mrdak : Ultimately that rests with the board and the minister—the minister, ultimately.

Senator STERLE: Chair, may I suggest you—

CHAIR: I assume you mean the board of Airservices?

Mr Mrdak : The board of Airservices has responsibility for the organisation. The board are accountable to the minister.

CHAIR: Do you know whether the chairman of the board or any of the board members are present with us today?

Mr Mrdak : I do not believe that any of the board are present with us today.

Senator STERLE: Chair, it would not be the first time we have requested the board to front the committee, and the chairman has fronted the committee each time we have asked.

Mr Mrdak : The Airservices response to the audit was a letter from the chair setting out the board's position on the matter.

Senator STERLE: Yes, there is form. I think we are up a dead-end street, Chair. To put it as Mr Ioannou clearly said, they are only auditors. We should have a private meeting and we should discuss writing to the board, asking them to come and give us a public briefing—not a private briefing—maybe as an extension of Senate estimates. I will let you think about that.

CHAIR: Our committee, without going into detail, is contemplating reaching out to the ANAO to look at something else—a matter completely unrelated to Airservices. I just want to try to establish the parameters of what you do, particularly in light of some of the evidence today. If we have an agency or a government department about which we think there is a body of evidence that suggests they have failed in their primary function: that is, that all the glasses of water are full by eight o'clock in the morning—I do not mean glasses of water, but I think you know what I mean—is it within your power to examine that on our behalf? Would you accept such a request?

Ms Mellor : I will make a couple of points. Right now we are formulating our forward work program. As this committee knows, when a committee, a house of the parliament, a minister or a member of parliament writes to the Auditor-General proposing we look at something, that is taken very seriously. We would look to see what standard we would audit against. We do not make up the standard. What we would have to be looking for includes if there is performance information, a statute—something that this agency that fills up glasses of water has to actually fulfil, so some set of rules. Depending on the priority of other things that might be going on at the time, the Auditor-General would respond, as he has before, to this—

CHAIR: I appreciate that. I think we have written or are about to write to the Auditor-General. I am looking for the capacity.

Ms Mellor : The capacity is that—

CHAIR: Not just financial.

Ms Mellor : I understand. Right at the moment we are doing 255 financial statement audits of all of the entities of the Commonwealth. We have currently got 42 audits this semester—'this semester': I feel like a school student! This year we have already tabled 42 performance audits. We have another 41 in course. It is the Auditor-General's discretion, firstly, to accept the invitation to undertake, but, secondly, to prioritise it in.

CHAIR: I get all that, Ms Mellor. As two men who sit on 18 committees, we get the priority aspect of things.

Ms Mellor : The joint committee of public accounts is currently circulating and conferring with all of the committee secretaries.

CHAIR: Sure, but the first thing that comes up when you think of the Auditor-General is the financial probity and those sorts of things. I am just trying to give an example, because we are not ready to publicly indicate what we are doing.

Ms Mellor : It is possible for you to just call one of us and have a chat, rather than take up the time of the committee.

CHAIR: We might do that, rather than do it in the open. I will do that myself.

Ms Mellor : What you will also observe, if you look at our website, is that we brief many members and senators, and we publish those briefings on our website. So everybody knows they can invite us in, if they wish to.

CHAIR: I think I will do it that way. Does anyone have any further questions?

Senator GALLACHER: I want to put on the record that I do find the work of the Audit Office extremely valuable, particularly in relation to the committees I sit on. I compliment you on your continuing good work.

Ms Mellor : Thank you very much.

CHAIR: All right, thank you ladies and gentlemen. We appreciate your attendance, and safe travel back to wherever you are going. Just before you call Airservices back, Mr Mrdak, we have had some private discussions about this. We do not want to just go round and round in circles, and so I think we might elevate this and invite the board of Airservices to come along and discuss this national audit report. I do not see any benefit in going round with the Airservices personnel at the moment.

Senator STERLE: I agree.

CHAIR: Meanwhile if Airservices could wait, hopefully Senator Xenophon is on his way. He has got some questions about something else.

Senator STERLE: Okay; what if I ask Mr Mrdak, while we are waiting, about a question I asked yesterday that I was seeking some—

CHAIR: I am sure Mr Mrdak would be delighted with that.

Senator STERLE: Why don't we do that, Mr Mrdak? I raised the question about the use of labour hire through the department and all the agencies. How did you go with some info coming back to me on that?

Mr Mrdak : I am hopeful to get, by the close of the committee, the department's use of hire. We will have the agencies, but I probably will not have the agencies for you before the hearing concludes tonight. I will take that on notice.

Senator STERLE: Okay, if you can get them to us that is great. I just wanted to raise that. I do have some other questions to you just on that.

CHAIR: We will call Airservices Australia back, if we can.