John McVeigh (Groom, Liberal Party) Share this | Hansard source

As I rise to speak on the Joint Committee of Public Accounts and Audit report 463, Commonwealth financial statements: inquiry based on Auditor-General's report 33 (2016-17), I reflect that it has been a tremendous honour to be a member of the committee since being elected to this parliament just last year. This very important joint public administration committee scrutinises the governance, performance and accountability of Commonwealth agencies and has the power to inquire into all expenditure of Commonwealth money. Its work is therefore vital for the sound operation of Commonwealth agencies and for the necessary confidence that all Australians should have in our system of government.

As the report stresses, the Auditor-General's financial statement audits play a critical role in ensuring accountability to the parliament and to the Australian public for the expenditure of public funds. The audits provide independent assurance that this information is accurate and that the financial management of Commonwealth entities is effective. This Joint Committee of Public Accounts and Audit report No. 463, Commonwealth financial statements, sets out the findings of the committee's inquiry based on audit report 33, for the period ended 30 June 2016. The 2015-16 consolidated financial statements were prepared in accordance with the Public Governance, Performance and Accountability Act 2013 and the requirements of Australian accounting standards, and an unmodified auditor's report for the statements was issued on 28 November 2016. The Auditor-General issued auditors reports on the 2015-16 financial statements of 246 Commonwealth entities up until 9 December 2016, and all auditors reports were unmodified. Some 245 findings were reported to entities as a result of the audits, comprising four significant, 32 moderate and 209 minor findings.

As has been said, the National Disability Insurance Agency and the Department of Education and Training both had significant audit findings, and the Department of Defence and the Australian Taxation Office both had multiple moderate audit findings. In the interests of being diligent, and based on a desire to maintain a focus on issues associated with significant audit findings when they are handed down, the committee recommended that, if next year's financial statement audits for these entities resulted in any significant or moderate findings, they should report back to the committee on progress in responding to those findings. I am sure that this committee will remain very diligent in following up on those issues if required for further future reporting purposes.

Noting the two significant legislative breaches reported in the Northern Land Council during 2015-16, the committee also recommended that the council report back on the progress in responding to these breaches and any such breaches that might be reported next financial year. In terms of some of the key recommendations in our committee's report, during the course of the committee's inquiry the Department of Finance took a number of steps to reinstate the previous practice for all Commonwealth entities to disclose details of senior executive remuneration. This had been continued as a result of aligning the new PGPA financial reporting rule with international and Australian accounting standards. The committee therefore recommends that, consistent with previous practice, disclosure of senior executive remuneration should again become a formal requirement, with publication in entity annual reports rather than just on entity websites.

Some of the detail of this particular recommendation includes the Department of Finance reporting back to our committee on options, firstly, to further strengthen remuneration disclosure requirements, giving particular consideration to the requirement for Australian Stock Exchange listed entities and/or the practice of the Australian Stock Exchange and, among other issues and recommendations, on what formal guidance and/or legislative instruments have been, or may need to be, updated to reflect such changes that this committee is very keen to see.

The committee further recommended that Finance develop benchmarks to enable entities to assess their own financial stability against agreed parameters over time. The committee also recommended Finance note that more transparent reporting on contracts and consultancy, early delivery of annual reports and improved entity audit committees be considered as part of the independent review of the PGPA Act.

As I said earlier, the Attorney-General's financial statement audits play a critical role in ensuring accountability to the parliament and to the Australian public for the expenditure of public funds. In conclusion, as a proud member of the Joint Committee of Public Accounts and Audit in this parliament, I, together with my colleagues, commend the Auditor-General and his office for their work each year in auditing the consolidated financial statements and Commonwealth entity financial statements.

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