While Western Australian Liberal Dean Smith is currently best known for being the architect of the marriage equality bill that passed through parliament just last night, he has quietly and assiduously worked on another issue all year: Canberra bureaucrats who make the same errors over and over when it comes to the process of delivering billions of dollars in government handouts.

Smith made it a mission for the parliamentary committee he chairs, the innocuously named Joint Committee of Public Accounts and Audit, to go after departments that are found to have committed the same errors across multiple audits by the Australian National Audit Office, which reports to his committee. Between Smith and the Australian National Audit Office (ANAO), under Auditor-General Grant Hehir, there is a diminishing tolerance for bureaucrats offering pro forma responses accepting ANAO recommendations but never following through. The committee has encouraged the ANAO to conduct follow-up audits, and in a series of inquiries has itself followed up departments to check compliance. 

The results are underwhelming, to say the least.

A particular target for Smith as well as the ANAO has been Mike Pezzullo’s Department of Immigration and Border Protection, which — disturbingly for a department intended to become the basis of a vast new paramilitary and security agency — has been the subject of repeated scathing audits. In September, the committee finalised an inquiry into two Immigration areas that had incurred the wrath of the auditors — its management of onshore detention health services (contracted out to IMHS) and its handling of offshore detention contracts, the subject of two high-profile audits in 2016 and early this year, finding in both cases that Immigration had no excuses for its failings and that it was going to force the bureaucrats to keep reporting back to the committee until they’d properly implemented the auditors’ conclusion. Immigration also took a whack from Smith and his colleagues in October over its ongoing — indeed, now long-term — failure to adequately implement the government’s own cybersecurity measures — which dates back to an ANAO audit in 2014. 

Other departments haven’t been spared. An August report by Smith’s committee dug into recurring blunders by major departments in implementing grants schemes, including paying money to ineligible recipients, failing to keep proper records of grants, and not bothering to evaluate whether grants achieved what they were expected to achieve. The departments targeted were the Environment Department, which implemented the $70 million “20 million trees” program; the Attorney-General’s Department, which ran the $5 million Living Safe Together program, and Prime Minister and Cabinet, which ran the Indigenous Advancement Strategy (IAS) — a consolidation of dozens of Indigenous funding programs into a $5 billion single program by the Abbott government. The implementation of all three programs was criticised by the ANAO but IAS was the subject a damning audit office report early this year.

[Warning to public servants: auditors are coming, and you’re not going to like it]

Of particular concern was a bureaucratic practice of finding ways to hand money to applicants who plainly did not meet grant program criteria. “It is of ongoing concern to the Committee,” it reported, “that the Auditor-General found that departments: did not clearly set-out the eligibility requirements in the programme guidelines; treated applicants inconsistently in relation to the stated eligibility requirements; and did not conduct eligibility assessments in a transparent or timely manner.”

The Environment Department was particularly bad, handing tens of thousands of dollars to ineligible grant recipients for the Greg Hunt-era boondoggle 20 Million Trees, while AGD insisted its process for considering grants was robust despite dozens of applications being considered when they should have been binned. PM&C was harder to assess because of the timeless bureaucratic problem of poor record-keeping (also criticised by the committee in relation to the Immigration audits; the issue is so widespread the ANAO has flagged it wants to conduct a performance audit into record-keeping across the public sector).

While each of the departments assured the committee that they were putting in place better processes for assessing grants (the Commonwealth also now has two Grant Hubs, for community and for business organisations, that can enable departments to more easily achieve consistent processes), Smith and co were also unhappy about the fact that departments weren’t properly informing ministers of what they were signing off on when it came to awarding grants, and were poor at giving ministers a sense of what was administratively realistic. PM&C were again found to have failed basic record-keeping. PM&C were also particularly poor at what is, apart from record-keeping, the most frequent bugbear of ANAO reports: the failure to properly evaluate programs. 

[How auditors get the goods on bureaucrats]

The context of the IAS is important here: one of the problems that has regularly been identified in relation to Indigenous programs across different portfolio areas is the lack of evaluation, so that policymakers don’t know what’s working and what’s not working. It’s an approach that Ken Wyatt, the Indigenous Health Minister, has sworn to change in health. It’s thus disturbing that, despite the fact that the government had provided PM&C with $40 million to evaluate the IAS, the committee found:

“… throughout the Inquiry, PM&C was not able to point the Committee to an approved, overall evaluation framework, nearly three years into the $4.8 billion strategy… At the public hearing, the department was asked to provide details on what formal processes were in-place to apply lessons learned from the IAS — that is, informing staff of these lessons and supporting staff to apply those learnings to other programmes across PM&C. The department advised that it is ‘developing a full implementation plan around the findings of the audit’.”

That PM&C is still “developing an implementation plan three years into the IAS” augurs poorly for addressing the most common criticism of Indigenous programs.

Plainly frustrated by the ongoing recurrence of the same problems, Smith and the committee demanded that there be more than just the usual agreement with ANAO recommendations:

“… the Committee wishes to highlight that the evidence received and reviewed in this area of grants administration shows that the issues are not just system or process related, but are also cultural. The Committee finds this particularly concerning, as departments oversee the allocation of hundreds of millions of dollars in public grants funding. Accordingly, the Committee considers there is a need for departments to instil cultural change, so that newly strengthened practices, in particular with respect to record keeping, are strongly embedded and applied by staff within a short time-frame …”

Expect Smith’s committee to keep the pressure on bureaucrats. The preferred strategy of the latter will be to wait Smith out and hope he moves on without them needing to undertake the kind of cultural change he is urging.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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