1. Keeping the Audit Alive:
PAC examination of performance audits
PUBLIC ACCOUNTS Paul McLeay MP
COMMITTEE Chair, PAC
2. PUBLIC ACCOUNTS
COMMITTEE The Committee
The NSW Public Accounts Committee
3. PUBLIC ACCOUNTS
COMMITTEE
• PAC background and functions
• Examination of performance audits
4. PUBLIC ACCOUNTS
COMMITTEE OVERVIEW
• Created by Part 4 of Public Finance and Audit Act
1983
• Comprises six members of the Legislative Assembly
• Ministers and Parliamentary Secretaries excluded
from membership of the Committee
• Chaired by a Government member
• Four members required for quorum
5. PUBLIC ACCOUNTS
COMMITTEE HISTORY
• Established in 1902
• Examines financial and accountability issues on
behalf of the NSW Parliament
• Previously, limited range of issues
unable to initiate own inquiries
Parliament and Auditor-General reluctant to
refer matters
• Reforms in the 1980s
expanded powers
can now initiate its own inquiries
6. PUBLIC ACCOUNTS
COMMITTEE Current functions
Public Finance and Audit Act 1983, Section 57
• PAC’s primary functions are to examine:
Total State Sector Accounts
Financial reports of State authorities
Opinions and reports of the Auditor-General
Restrictions on the Committee
x Government policy, unless inquiry referred by
Assembly or Minister
x Estimates of proposed expenditure
17. Auditor-General
Assists Parliament to improve
State accountability &
performance through auditing
Reports Refers
Parliament
Delegates to the PAC
detailed examination of
expenditure & audit reports
Refers PAC Reports
Assists Parliament to improve
State accountability &
performance through
examination of audits
18. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Former Approach — the PAC would:
• choose a performance audit once or twice a year for detailed
examination
• conduct a standard, detailed committee inquiry, publicly
calling for submissions and hearing from a broad range of
witnesses
• Produce a detailed report with recommendations reflecting
the Committee’s views on the subject matter of the audit
19. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
New Approach — the PAC:
• Examines every performance audit
• Seeks submission from agency 12 months after audit
• Refers agency’s submission to A-G for comment on consistency with
audit recommendations
• Holds hearings with agency and A-G
• Report with recommendations regarding response to the audit
• Report debated in Parliament
• Government response within 6 months
20. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Timeline:
• Submission request 12 months after audit
• One month for agency to produce submission
• Two weeks for Auditor-General’s response
• Hearings held periodically on a number of audits
21. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Agency submissions:
• Outline response to each recommendation, including:
Assessment of recommendation
Plans made in response
Timetable for completion
Current status and action taken to date
22. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Hearing Process:
• Questioning on issues arising from consideration of
submissions
• Auditor-General appears as a witness at the same time as
agencies
• A number of reports will be considered on a single day
23. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Parliamentary Debate:
• New sessional orders provide for debate of all committee
reports
• Opportunity for Members to raise enduring concerns or
points of interest in Parliament
• Alerts the whole House to issues raised in the Committee
24. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC
25.
26. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC
• Ensure recommendations of value are not forgotten
Agency revised responses for hearing
27. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC
• Ensure recommendations of value are not forgotten
• Allow both recommendations and responses to be tested in the
political arena
Explain any rejection of recommendations
Demonstrate how any problems have been addressed
28. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC
• Ensure recommendations of value are not forgotten
• Allow both recommendations and responses to be tested in the
political arena
• Ensure CEOs account to the Parliament for how they respond to
recommendations
Outline changes to address issues
Explain any lack of progress
29. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC
• Ensure recommendations of value are not forgotten
• Allow both recommendations and responses to be tested in the
political arena
• Ensure CEOs account to the Parliament for how they respond to
recommendations
• Provide reality check to Audit Office
External assessment of recommendation in light of experience
30. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC
• Ensure recommendations of value are not forgotten
• Allow both recommendations and responses to be tested in the
political arena
• Ensure CEOs account to the Parliament for how they respond to
recommendations
• Provide reality check to Audit Office
31. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Outcome:
• Improved accountability & performance of State agencies