1. 1 Governance, accountability and performance reporting in the public sector Des Pearson Executive in Residence August 2013

2. 2 The business of the public sector Victorian public sector One of Australia’s largest businesses! Revenue - $60+b Assets - $250b Almost 300 000 employees In comparison........

3. 3 Audit clients Around 550 client agencies Departments Local government Companies, trusts and joint ventures Water corporations Police. Emergency services and courts administration Public hospitals and ambulance Universities and colleges Financial institutions Superannuation schemes

4. 4 Audit and accountability What is accountability? ‘Reporting back to those who charged you with a responsibility’ Important in both private and public sectors Why make the public sector accountable? Probity/integrity Performance management Democracy – Inform Parliament/citizens so they can exercise powers

5. 5 Role of Auditor-General Our Purpose: Providing assurance to Parliament on the accountability and performance of the Victorian public sector –Auditing in the public interest since 1851 –Constitutional safeguard to serve interests of Parliament –A key link in the accountability process –No executive authority to enforce recommendations Independent officer of Parliament –Not subject to direction –Accountable to Parliament via the Public Accounts and Estimates Committee

6. 6 Financial audit – ‘how much’ Review the financial and non-financial performance statements of ~560 agencies each year Around 70% of audits are undertaken by audit service providers Report on State’s estimated financial statements and annual financial report. Performance audit – ‘how well’ Determine whether an authority is achieving its objectives and operating economically, efficiently and effectively in compliance with relevant Acts Not to question the merits of policy objectives Wide powers of access and examination. Audit Mandate

7. 7 Aligning with government priorities Growing Victoria Together Thriving economy Quality health and education Healthy environment Caring communities Vibrant democracy Goals for a stronger, fairer, safer Victoria A growing economy Services that work Secure water and a healthy environment Strong families and vibrant communities Government you can trust

8. 8 Key Audit Themes Project Short Presentation for VAGO events Long presentation for VAGO events Detailed Handout for Ministers and Secretaries

9. 9 Common findings Lack of robust and thorough assessment of needs and demand Flawed or inadequate forecasting Failure to plan effectively for future demand Inequitable provision across regions and communities 1. Planning and delivery of services and infrastructure

10. 10 2. Quality information for decision- making Common findings Gaps in information underpinning decisions Poor business case development Inaccurate or out-of-date information Lack of consolidation of relevant data Unclear analysis of information Lack of assurance over the quality of data

11. 11 3. Real governance and effective oversight Common findings Lack of sufficient guidance from agencies in leadership roles Insufficient oversight and monitoring by central agencies and accountable departments Unclear roles and responsibilities Governance for whole-of-government approaches not sufficiently coordinated

12. 12 4. Measuring and communicating performance Common findings Delays in establishing a performance measurement approach Lack of critical elements of measurement frameworks Lack of alignment of framework elements Performance measures not relevant or appropriate Outputs and activities measured instead of outcomes Post-project evaluations not conducted

13. 13 5. Procurement and contract management Common findings Inadequate consideration of available procurement options Failure to encourage sufficient competition Lack of assurance that procurement has followed a fair and impartial process Contracts lacking important elements, incentives and penalties Contract provisions not fully utilised to improve performance Lack of review of effectiveness of contracts

14. 14 6. Managing information transparently and securely Common findings Poor documentation of the rationale for decision- making Persistent weaknesses in controls over information system security Physical security of information at risk Poor reporting of information for transparency Public access to information impeded

15. 15 Conclusion Encouraged by broad interest in these themes Public sector is lucky to have access to this information across the whole-of-government, beyond just your own organisation or jurisdiction Encourage practitioners to leverage this free access and grasp the opportunity to learn from others