National auditor-general Grant Hehir has warned that his office will need to reduce the number of performance audits it conducts each year unless it receives sufficient funding, while smaller agencies could go without being audited for more than 20 years.
In his opening statement to the joint committee of public accounts and audit on Friday, Hehir said the Australian National Audit Office’s delivery of performance audit reports next year would be at its lowest in 20 years, reducing accountability and transparency.
“Historically, for the last two decades, the ANAO has provided the Parliament with an average of 47 performance audit reports per year,” he said.
“As you know, I am forecasting a reduction in performance audits to 40 in 2021–22, falling to 36 by 2024–25. I anticipate that even with reduced numbers, the depth and breadth of audits within the performance audit program will also reduce.”
Hehir noted that auditing some government agencies could be put on the back burner for years at a time.
“With a reducing number of performance audits, many smaller agencies may not be audited for extended periods of time, potentially over 20 years. This reduces the pressure to maintain performance and compliance,” he said.
The auditor-general wrote to the prime minister last year to a request a “more sustainable basis” for ANAO funding, and warned that without it, “the number of performance audits tabled in the parliament will continue to reduce”.
Between 2013-14 and 2020–21 the ANAO’s appropriation has reduced by $6.43 million — 8.5%. Meanwhile, general government sector expenditure has increased by 68.3%, Hehir told the committee.
“As a percentage of general government expenditure, the ANAO appropriation has fallen by over 50% over the last 10 years,” he said.
“In short, the ANAO’s ability in these circumstances to assist the Parliament through the mandate provided in the [Auditor-General] Act is now well below historical levels and compromises the Parliament’s ability to receive quality information with which to hold executive government to account.”
Last year analysis conducted by the the Centre for Public Integrity found that ANAO funding has been cut by $23.7 million in real terms since 2016-17.
Over the past year the ANAO’s performance audit reports have led to increased public scrutiny of pork barrelling and dodgy deals within the commonwealth, particularly in regard to the sports rorts saga and the Leppington Triangle deal.