Patrick Barrett

New development: Financial reform and good governance

It has taken almost 15 years for an Australian government to again proceed with major financial reform. Earlier this year, the then minister for finance when introducing new legislation implementing the reforms under one Act (the Public Governance, Performance and Accountability Act 2013) noted that the system was ‘not broken’ but that it ‘creaks at times’. That Act represents about one half of the proposed reforms but is central to their success. One of the more interesting aspects of the reforms is that they were developed in an open process with the involvement of both public and private sector advisers over a three-year period and oversight by the Department of Finance, similar to the approach taken with the ground-breaking public service reforms in Australia in the 1990s. The focus is largely on financial reform as part of good governance, stressing performance and accountability, but also giving prominence to risk management and the associated notion of ‘earned autonomy’ and less ‘red tape’. In addition, attention is given to the need to establish a governance framework that recognizes the increasing co-operation and collaboration across agencies and entities, across governments at all levels and across sectors of the economy. We continue to learn from research in both the UK and Canada in particular, recognizing both the similarities and differences between the public and private sectors.

Commentary: Where You Sit Is What You See: The Seven Deadly Sins of Performance Auditing. Implications for Monitoring Public Audit Institutions

It has to be observed at the outset that performance auditing has been a contentious issue for much of the three decades it has been pursued in Australia. That said, there is clear evidence of its growth and acceptance in that period. Nevertheless, there are still apparent differences in views and perceptions across the main stakeholders, not least related to the performance and results achieved by the Audit Offices involved. In these respects, Stuart Kells highlights deficiencies that need to be addressed to instill greater confidence in such auditing. In my view, many of these deficiencies (Sins) have been addressed, particularly in the last decade or so, and we may be better employed in focusing more on the achievement of identifiable outcomes as a result of such auditing. Do performance audits actually make a ‘difference’? Such a focus does not ignore questions about how performance audits are selected, conducted and reported, nor their quality and relevance. Rather, a major challenge is to put in place a robust review framework that would markedly add to accountability for implementation of agreed audit outcomes.

Performance auditing—what value?

The audit expectations gap has received considerable publicity world-wide, particularly in the recent global financial crisis. Public sector auditing is not exempt in this respect, and is no more so than in the area of performance auditing. How much do audit reports really tell us about the value delivered by government programmes? Is there sufficiently shared understanding and perceptions of performance auditing and the value it provides?

Performance auditing—addressing real or perceived expectation gaps in the public sector

The growth of performance auditing in Australia (and in many other countries) has led to a range of seemingly conflicting observations about their contribution to better public administration, which basically reflect differing political and public expectations of such audits. Confusion also revolves around the question of just what value is being assessed, reflecting differing perceptions of assurance and performance and of the coverage of administrative and policy effectiveness. A better understanding of what needs to be achieved by those responsible and acceptance of accountability for the required results would improve confidence in public administration and in the value that it delivers.

New development: Procurement and policy outcomes—a bridge too far?

This article furthers the discussion in the March 2015 (Vol. 35, No. 2) issue of Public Money & Management on ‘Public procurement policy and practice— international lessons and debates’. In particular, it illustrates some of the major difficulties in achieving the required policy outcomes through the procurement processes. The numerous ‘failures’, particularly in the defence acquisitions area, are of ongoing concern both in terms of ‘blow-outs’ in costs and, more unfortunately, in achieving strategic defence capability and overall policy outcomes in required timeframes. Can current public sector reforms and observed better practice provide any encouragement for, discipline on, participants to achieve the required results or is it all just too difficult?

Debate: Focusing on programme implementation for improved accountability and results

Raising the bar Programme implementation has attracted academic and other attention periodically over many decades. Nevertheless, there would seem to be inadequate accountability for ensuring that implementation is economic, efficient and effective in order to provide confidence that the programme will achieve the results required. Although there have been initiatives taken over the years to address the problem, their effectiveness is questionable, at least in relation to major programmes having a significant impact on the community. My observations on this issue relate mainly to the Australian situation, but do raise questions about similar occurrences in other countries, such as Canada, New Zealand, the UK and the USA. The debating point is whether parliamentary examination during policy implementation would enhance accountability; facilitate early remedial action of a policy and/ or administrative nature; and result in better programme outcomes. Given the experiences in recent years in Australia, involving billions of dollars in major programmes, something significant and credible needs to be done to enhance public confidence in government and in the public sector generally. Most governments have adopted the requirement for the provision of programme performance information (measurement). Labels such as ‘results management’, ‘making the managers manage’, ‘performance management’ and ‘citizen involvement/ participation’ stressed the requirement for greater accountability for both programme processes and outcomes. Review processes, such as the UK government’s Prime Minister’s Delivery Unit (PMDU) and Office of Government Commerce (OGC) ‘Gateway’ product, emulated in various ways in some state and federal governments in Australia, have focused on programme delivery, or at least important aspects of it. The independent peer reviews conducted by the OGC show they provided significant performance improvement and savings. It has been claimed that the development of a Cabinet Implementation Unit in the Australian government was due, at least in part, to the disinterest of the finance department in programme management, implementation and programme evaluation at the time. There had undoubtedly been cessation of programme effectiveness and programme evaluation reviews and requirements for departmental/ agency evaluation plans. However, there was also a suggestion that the then prime minister (Mr Howard) was exasperated with the time being taken to implement programmes and the large amount of money being spent for little or no apparent results. Such units do not appear to have been as successful in Australia as they have been in the UK, where they were much better resourced. At best, the apparent results have been mixed in Australia. There is very little transparency of any results. Similar reservations have been expressed about performance information which tends to be high level and broadly based, and may simply provide a distorted picture of the reality of what is actually being achieved at various points in time. Only limited information is made available on ‘intermediate outcomes’, i.e. short-term performance measures, which would at least indicate what progress is being made on programme implementation. There is clearly some way to go before published performance information is generally considered useful for accountability purposes.

Where you sit is what you see: Commentary on the Seven Deadly Sins of Performance Auditing: Implications for Monitoring Public Audit Institutions

It has to be observed at the outset that performance auditing has been a contentious issue for much of the three decades it has been pursued in Australia. That said, there is clear evidence of its growth and acceptance in that period. Nevertheless, there are still apparent differences in views and perceptions across the main stakeholders, not least related to the performance and results achieved by the Audit Offices involved. In these respects, Stuart Kells highlights deficiencies that need to be addressed to instill greater confidence in such auditing. In my view, many of these deficiencies (Sins) have been addressed, particularly in the last decade or so, and we may be better employed in focusing more on the achievement of identifiable outcomes as a result of such auditing. Do performance audits actually make a ‘difference’? Such a focus does not ignore questions about how performance audits are selected, conducted and reported, nor their quality and relevance. Rather, a major challenge is to put in place a robust review framework that would markedly add to accountability for implementation of agreed audit outcomes.