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Report Template Consideration of the recommendations of the strategic review of the Queensland Audit Office Report No. 51, 55th Parliament Finance and Administration Committee October 2017 Finance and Administration Committee Chair Mr Peter Russo MP, Member for Sunnybank Deputy Chair Mr Ray Stevens MP, Member for Mermaid Beach Members Mr David Janetzki MP, Member for Toowoomba South Mrs Jo-Ann Miller MP, Member for Bundamba Mr Steve Minnikin MP, Member for Chatsworth Mr Linus Power MP, Member for Logan Committee Secretariat Telephone +61 7 3553 6637 Fax +61 7 3553 6699 Email [email protected] Technical Scrutiny +61 7 3553 6601 Secretariat Committee Web Page www.parliament.qld.gov.au/FAC Acknowledgements The committee acknowledges the assistance provided by Ms Philippa Smith and Mr Graham Carpenter, current and former staff of the Queensland Audit Office and the Treasurer. Consideration of the recommendations of the strategic review of the Queensland Audit Office Contents Abbreviations ii Chair’s foreword iii Recommendations iv 1 Introduction 1 1.1 Role of the committee 1 2 The Queensland Audit Office 1 2.1 Financial audit 2 2.2 Performance audit 2 3 Strategic review of the Queensland Audit Office 3 3.1 Committee consideration of the strategic review report 5 4 Strategic recommendations 6 4.1 Relationship with audit clients 7 4.2 Resources – financial audit 9 Financial audit – fees 10 Impacts upon staff 11 4.3 Performance audit 13 Strategic audit planning 15 Implementation of performance audit recommendations 16 4.4 The QAO’s ability to recruit, retain and remunerate staff 18 4.5 Independence of the Auditor-General 20 5 Operational Recommendations 23 5.1 Small and low risk audits (recommendation 4.6 (i)) 23 5.2 Audit analytics (recommendations 4.8 (i) to (iv)) 24 Appendix A Strategic Review Terms of Reference, 28 Appendix B – Table of Strategic Reviewers’ operational recommendations 31 Appendix C – Correspondence from the Auditor-General 33 Appendix D – Correspondence from the Treasurer and Minister for Trade and Investment 36 Finance and Administration Committee i Consideration of the recommendations of the strategic review of the Queensland Audit Office Abbreviations ACAG Australasian Council of Auditors-General ACPAC Australasian Council of Public Accounts Committees AG Act Auditor-General Act 2009 CBRC Cabinet Budget Review Committee the committee Finance and Administration Committee former committee Public Accounts and Public Works Committee GOC Government owned corporations INTOSAI International Organisation of Supreme Audit Institutions PSC Public Service Commission QAO Queensland Audit Office SAP strategic audit plan strategic review /the Strategic Review of the Queensland Audit Office review strategic reviewers/ Ms Phillippa Smith and Mr Graham Carpenter the reviewers The report / review Philippa Smith & Graham Carpenter, Strategic Review of the Queensland report Audit Office, March 2017 ToR Terms of Reference, Strategic Review of the Queensland Audit Office ii Finance and Administration Committee Consideration of the recommendations of the strategic review of the Queensland Audit Office Chair’s foreword The Queensland Audit Office (QAO) is a highly regarded Queensland institution. The five yearly strategic review offers an opportunity to review the functions and operation of the QAO. This report considers the latest strategic review undertaken in 2016-17 by Philippa Smith and Graham Carpenter. It is clear that the QAO has moved forward and implemented the recommendations flowing from the last strategic review. The reviewers noted that the issues raised in the 2010 strategic review were not raised during this review. The strategic reviewers found that the QAO is fundamentally sound and is valued by its clients. There were five strategic recommendations and 27 operational recommendations. These are discussed in the committee’s report. A significant change since the last strategic review is the performance audit mandate of the QAO. The QAO has worked to implement and develop its performance auditing of public sector agencies. The committee commends the Auditor-General and his staff for their hard work and dedication to improving the public sector through performance auditing. The responsibility for the improvements to the public sector does not rest with the QAO alone; accordingly the committee has recommended that Ministers ensure the timely implementation of agreed performance audit recommendations. The committee also recognises the role of Parliamentary portfolio committees in monitoring the implementation of the Auditor-General’s recommendations. Workload and managing the health and wellbeing of QAO staff remains a challenge, as is evidenced in multiple staff surveys over several years. The value of the QAO is in its staff so it is imperative that the Auditor-General work to relieve these impacts to ensure a healthy workforce. Again, the responsibility for managing the impacts of workload on QAO staff does not rest with the Auditor-General alone. It is incumbent on agencies to prepare and submit their financial statements in a timely manner. This will reduce the last minute workload increases on the financial auditors within the QAO. Again, the committee calls on Ministers to ensure agencies prepare and submit their financial statements and asset valuations in a timely manner. The committee will continue to monitor this issue closely. The committee is particularly impressed with the QAO’s development of its audit analytics system which should deliver efficiencies in collecting and reviewing government data for the purposes of its audits. The committee notes that the QAO will work with the government to develop similar capabilities for government data. The committee looks forward to receiving positive updates in this regard. I thank the strategic reviewers for their work in undertaking this review and the staff of the QAO past and present for their cooperation. It is clear that QAO staff embrace and encourage improvement in their work and we look forward to continuing our oversight of this valuable Queensland institution. Finally, I thank my fellow committee members and secretariat staff for their work on this matter. As a committee we strive to ensure the QAO is held accountable to the people of Queensland, I believe that the committee’s bipartisan approach to this inquiry means we can achieve this aim. I commend the committee’s report to the House. Peter Russo MP Chair Finance and Administration Committee iii Consideration of the recommendations of the strategic review of the Queensland Audit Office Recommendations Recommendation 1 9 That the Auditor-General ensure that the Queensland Audit Office Better Practice Asset Valuation Guide is available in a timely manner. Recommendation 2 13 That the Premier and Treasurer advise all Ministers and departments of the need to and expectation that they will ensure timely preparation and submission of financial statements to the QAO. Recommendation 3 18 The committee recommends the QAO prepare a detailed analysis of any additional funding it requires and ensure the committee is included and aware of any approaches to the Treasurer/ CBRC for future funding increases. Recommendation 4 18 The committee recommends Ministers outline to their agencies the importance of the implementation of the QAO’s performance audit recommendations, in accordance with any prescribed timelines. Recommendation 5 27 That the Premier, in consultation with the Minister for Innovation, Science and the Digital Economy and Minister for Small Business, consider amendment of section 53 of the Auditor-General Act 2009 or any other alternatives to allow the Department of Science, Information Technology and Innovation to access and utilise the QAO held audit analytics data of government departments. Recommendation 6 27 That the Minister for Innovation, Science and the Digital Economy and Minister for Small Business update the House with respect to the development of the whole-of-government data solution capability. iv Finance and Administration Committee Consideration of the recommendations of the strategic review of the Queensland Audit Office 1 Introduction 1.1 Role of the committee The Finance and Administration Committee (the committee) is a portfolio committee of the Legislative Assembly which commenced on 27 March 2015 under the Parliament of Queensland Act 2001 and the Standing Rules and Orders of the Legislative Assembly.1 The committee’s primary areas of responsibility include: Premier, Cabinet and the Arts Treasury and Trade and Investment, and Employment, Industrial Relations, Racing and Multicultural Affairs. The Standing Orders also detail the committee’s oversight responsibility. Schedule six of the Standing Orders provides the committee has oversight responsibility for the Auditor-General, the Integrity Commissioner and the Queensland Family and Child Commission.2 The Auditor-General Act 2009 (AG Act) sets out the committee’s role with respect to the oversight of the Queensland Audit Office (QAO), which includes that the committee is to be consulted on: the proposed appointment, removal or suspension of a person as Auditor-General the development of the proposed budget of the QAO for each financial year the development of strategic audit plans for performance audits to be undertaken by the QAO the terms of reference for and proposed appointment of person/s as strategic reviewer/s to conduct the five yearly strategic review of the QAO, and the development of the annual QAO strategic plan.
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