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Tuesday, 26 November 1985
Page: 2242


Senator Dame MARGARET GUILFOYLE —I present report No. 239 of the Joint Parliamentary Committee of Public Accounts-Expenditure from the Advance to the Minister for Finance (Appropriation Acts 1983-84).

Ordered that the report be printed.


Senator Dame MARGARET GUILFOYLE —I seek leave to have a short statement incorporated in Hansard.

Leave granted.

The statement read as follows-

Report No. 239 examines the Expenditure from the Advance to the Minister for Finance (Appropriation Acts 1983-84). Honourable senators will be aware that the advance to the Minister for Finance is a provision in the annual appropriation Acts and made available to the Minister for issue in accordance with the terms of the appropriations and Section 36A of the Audit Act 1901. The only amounts which should remain a charge to the appropriations for the Advance to the Minister for Finance at the end of the financial year are urgent and unforeseen expenditures which arise between the time of preparation of the additional Appropriation Bills and the close of the financial year. The Minister for Finance is required under the terms of the appropriations to submit a statement of this expenditure to the Parliament after the end of the financial year. This statement is examined by the Joint Parliamentary Committee of Public Accounts.

In its examination of expenditure from the Advance, the Committee seeks to ascertain whether or not expenditure from the Advance has been confined to urgent and unforeseeable requirements for which provision could not have been made in the original or Additional Estimates. The Committee also seeks to ascertain whether or not the departments concerned have maintained efficient administration in the expenditure of funds under the items examined.

The new AMF procedures introduced in 1982-83 require departments, whose applications, if accepted, would remain a charge on the Advance at the end of the financial year, to provide sufficient supporting material to satisfy the Committee's requirements. Despite these clear instructions, some departments still did not offer sufficient explanation with their applications. The Committee would have expected the Department of Finance to have insisted upon sufficient documentary material for it to be satisfied that an urgent and unforeseeable requirement for funds from the Advance was warranted, prior to approval being finalised. It was necessary for the Committee to request additional information.

The Committee is concerned by the attitude of some departments which have received the Advance which implied that as long as offsetting savings were offered there should not be questions raised as to whether the application was `urgent' and `unforeseen'. With the Government policy on expenditure restraint, offsetting savings are being offered with many applications for the Advance-over 45 in 1983-84. The Committee would like to remind departments that the offering of offsetting savings does not replace the `urgent' and `unforeseen' requirements.

The Committee received 112 submissions on the use of the Advance and decided to examine three of those submissions by public inquiry on 13 May 1985. They were:

Department of Defence: Item 255-1-01-Salaries;

Department of Education and Youth Affairs: Item 271-3-01-Independent Schools-Grants, Subsidies and Allowances; and

Department of Territories and Local Government: Item 626-1-01-Salaries.

In its examination of the Department of Defence, the Committee was very concerned that the delays in processing taxation deductions for Garden Island Dockyard had been occurring for 12 to 18 months without senior management being aware until the Committee asked for a submission on the request for $330,000 from the Advance. This request does not appear to satisfy the criteria of `urgent' and `unforeseen' except that the backlog of taxation deductions had been eliminated.

The Committee is also very concerned that a Commonwealth organisation was able to submit late Taxation returns for such a long period without it being brought to the attention of senior management in the Department or the Australian Taxation Office. The Committee concludes that this request for the Advance reflects badly on the financial management of the Department of Defence.

The Department of Education made an urgent application for the Advance, but the Committee is concerned that the Advance had to be used on this occasion, mainly because one State was late in submitting data on which the Australian Capital Territory grants are based. However, the Committee expects that the planned changes for 1986 will minimise the need to draw on the Advance in the future. The Committee is extremely concerned that the then Department of Territories and Local Government did not appear to have appropriate mechanisms for forecasting peak period workloads. That resulted in insufficient time for the salaries of staff needed to perform routine departmental functions to be included in the normal appropriations.

The Committee is concerned that many of the instances of funds requests included in the application indicate inadequate management of discernible personnel requirements. Items which should not have been unforseen were those relating to the regular day-to-day functions of the Department. The Committee urges departments to be careful in interpreting awards to ensure that temporary staff receive their full entitlements. The errors in payments to library staff should not have occurred and it is disturbing that they were perpetuated for so many years. The Committee is also disturbed that it required union intervention to alert the Department.

The Committee is of the view that, while the Department has taken appropriate action to improve its forecasting and management information systems in various areas influencing salaries administration, the information provided on the specific items covered in the Advance does not provide sufficient evidence to conclude that similar problems will not occur in the future. The Committee noted particularly that for certain items the Department was unable to provide a detailed breakdown of the use of the AMF funds. This calls into question the Department's original application.

The Advance to the Minister for Finance is intended to be confined to expenditure of an, urgent, and, unforeseen nature. Urgent nature was not demonstrable in all the items considered and, in the majority of instances, the unforeseen nature of the item resulted from administrative deficiencies in the then Department of Territories and Local Government rather than an inherent characteristic of the expenditure item itself. I commend this report to honourable senators.