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Audit Act - Auditor-General - Audit reports - 1994-95 - No. 17 - National Media Liaison Service: a loophole in accountability

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Audit Report No. 17 1994-95

National Media Liaison Service

A Loophole in Accountability?

Nat i onal Audi t Of f i ce

A u s t r a l i a n N a t ο n a I A u U t Ο I I i c c

T he A uditor-G eneral

A udit R eport No. 17 1994-95

National Media Liaison Service A Loophole in Accountability?

A u s t r a l i a n G o v e r n m e n t P u b l i s h i n g S e r v i c e C a n b e r r a

©Commonwealth of Australia 1995

ISSN 1036-7632

ISBN 0 644 35137 3

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction and rights should be addressed to the Manager, Commonwealth Information Services, Australian Government Publishing Service, GPO Box 84, Canberra ACT 2601.

Produced by the Australian Government Publishing Service

Australian National Audit Office Canberra ACT 12 January 1995

Dear Mr President Dear Mr Speaker

In accordance with the authority contained in the Audit Act 1901, I today approved for transmittal to the Parliament my report National Media Liaison Service - A Loophole in Accountability'.''

The Honourable the President of the Senate The Honourable the Speaker of the House of Representatives

Parliament House Canberra ACT

Yours sincerely

J. C. Taylor Auditor-General


The Auditor-General is head of the Australian National Audit Office. He and the AN AO are independent of the Government. The ANAO assists the Auditor-General to carry out his duties under the Audit Act to undertake audits of performance and financial statements of

Commonwealth public sector bodies and to provide independent reports and advice for the Parliament, the Government and the community. The aim is to improve Commonwealth public sector administration and accountability.

Auditor-General’s reports are available from Commonwealth Government Bookshops. Recent titles are shown at the back of this report. For further information please contact:

Pile Reports and Publications Officer Australian National Audit Office GPO Box 707 Canberra ACT 2601

phone (06) 203 7537 fax (06) 203 7777

1. National Media Liaison Service (NMLS) - A Loophole in Accountability?

1.1 In April 1994 AN AO designated an efficiency audit of Government information and advertising. The scope of the audit was to assess the economy, efficiency and administrative effectiveness of Government information and advertising activities. The audit was

to focus on the planning for, implementation, co-ordination and evaluation of information and advertising. The information and advertising activities planned for audit were encompassed by:

• Departments and agencies of the Commonwealth. The audit selected the Departments of Employment Education and Training, Social Security, Defence and Human Services and Health, as well as the Australian Taxation Office

• the co-ordination activities of the Office of Government Information and Advertising in the Department of

Administrative Services, and

• the information activities of the National Media Liaison Service (NMLS).

1.2 In October 1994, ANAO sought an interview with NMLS for the purpose of continuing with the audit. NMLS declined several times to enter into any discussion with ANAO and referred ANAO to the Minister for Administrative Services.

1.3 On 16 November 1994, after discussion with the

Auditor-General, the Acting Auditor-General wrote to the Minister seeking his assistance in resolving the impasse. The Minister replied on 5 December 1994 that the ‘review you propose is ultra vires the

Audit Act’. Attached to the letter was an opinion dated November 1993 (that is, before the audit had commenced) from the Attorney General’s Department supporting this position.

1.4 ANAO sought a clarification of the legal opinion from the Attorney-General’s Department. A reply has been received confirming the previous advice that NMLS can not be subjected to efficiency audit under the Audit Act.

1.5 NMLS is therefore not subject to the normal accountability mechanisms in place over Government programs. As a consequence, although NMLS is fully funded by the taxpayer and its stated roles and functions are predominantly administrative in nature, its

operations are not subject to the scrutiny normally associated with the expenditure of public monies.


1.6 The Parliament, through both the Joint Parliamentary Committee of Public Accounts and the Standing Committee on Finance and Administration, has expressed the view that all Commonwealth undertakings, of whatever legal form, should be audited by the Commonwealth Auditor-General.

1.7 All those who play a role in administrative decision making exercise public power and that action, especially where public money is involved, should be open to public scrutiny. The Auditor-General Bill before Parliament does not provide explicitly that the performance audit mandate of the Auditor-General extends to activities such as those of NMLS. I understand, however, that it is intended that this will be addressed by regulation only and therefore not be a central tenet in the provisions of the legislation. The accountability arrangements for all activities that involve the use of

taxpayers’ funds should be enshrined as a central tenet of the provisions of any new Auditor-General Act.

1.8 The AN AO will continue its audit of Government

information and advertising activities pursuant to the current Audit Act 1901.

12 January 1995 Canberra ACT Auditor-General

J.C. Taylor


Series titles Titles published in the financial year 1994-95

Audit Report No. 1 Project Audit Commonwealth Scientific and Industrial Research Organisation - Follow-up of an Efficiency Audit

of External Funds Generation

Audit Report No.2 Department of Defence Follow-up Audit Management of Army Training Areas

Preliminary Study Acquisition of Additional F - l ll Aircraft

Audit Report No.3 Project Audit Wool Tax Australian Taxation Office

Audit Report No.4 Project Audit Special Investigation into Casselden Place Building, Melbourne Department of Administrative Services

Audit Report No.5 Follow-up Audits Department of Employment, Education and Training - New Enterprise Incentive Scheme (NEIS) - Protective Security


Audit Report No.6 Efficiency Audit Australian Taxation Office Information Technology Security

Audit Report No.7 Efficiency Audit Department of Industry, Science and Technology National Interest Export Finance and Insurance

Audit Report No.8 Aggregate Financial Statement prepared by the Minister for Finance year ended 30 June 1994

Audit Report No.9 Project Audit Is Australia ready to respond to a major oil spill? Australian Maritime Safety Authority

Audit Report N o.10 Efficiency Audit Cash Management in Commonwealth Government Departments

A Project Audit ANL - Valuation Issues

Audit Report No. 12 Audit Reports on 1993-94 Financial Statements of Commonwealth Entities

Audit Report No. 13 Efficiency Audit Australian Defence Force Housing Assistance Department of Defence

Audit Report No. 14 Project Audit Department of Housing and Regional Development - Office of Local Government - Local Capital Works Program

Preliminary Study The Textiles, Clothing and Footwear Development Authority

Audit Report No. 15 Project Audit Department of Veterans’ Affairs - Follow-up of an Efficiency Audit on Compensation Pensions to Veterans

and War Widows

Audit Report No. 16 Follow-up Audit Accrual Reporting - Are Agencies Ready?

Audit Report No. 17 National Media Liaison Service A Loophole in Accountability?

O ther Titles

Annual Report of the Australian National Audit Office 1993-94



ISSN 0727-418