The Commonwealth has significant foreign exchange risk exposures including $A8.4 billion of foreign currency transactions with the Reserve Bank of Australia in 1998-99. Under the Financial Management and Accountability Act and its associated Regulations, all agencies are required to assess and, where possible, manage, foreign exchange risk. The audit reviewed four agencies that have substantial foreign currency payment exposures namely:

• the Department of Defence;
• the Australian Agency for International Development;
• the Department of Foreign Affairs and Trade; and
• the Department of Finance and Administration.

The objective of the audit was to identify and assess the efficiency and cost effectiveness of the management of foreign exchange risk across the selected agencies, also to identify opportunities to improve the management of foreign exchange risk, including any associated potential financial savings that could accrue to the Commonwealth.

The audit reviewed the management of the first round of Job Network contracts, which focused on Job Matching, Job Search Training and Intensive Assistance. The objective of the audit was to assess the efficiency and effectiveness of the Department of Employment, Workplace Relations and Small Business's management of the first round of employment services contracts. A key part of this examination was to assess the Department's level of confidence that the program was meeting government objectives based on performance and management information.

The objective of the audit was to determine whether Centrelink's planning, monitoring and costing arrangements provide a sound basis to underpin its delivery of quality, cost effective customer services.

The audit reviewed the effectiveness and probity of the policy development processes and implementation of improved access to Magnetic Resonance Imaging services. The objective of the audit was to examine and report on the effectiveness and probity of the processes involved in:

(a) the development and announcement of the proposal to improve access to Magnetic Resonance Imaging (MRI) services announced in the 1998 Budget, including negotiation with the diagnostic imaging profession; and

(b) the registration of 'eligible providers' and 'eligible equipment' to enable the payment of claims for MRI services on the Medicare Benefits Schedule

The Commonwealth has significant involvement in national emergency management arrangements through its roles in planning, coordination between agencies, operational response, financial support, education and training, public awareness and research activities. The objectives of this performance audit were to identify the Commonwealth's current emergency management arrangements; to provide assurance to Parliament concerning the adequacy of the arrangements; and to highlight areas for improvement.

Tactical fighter operations (TFOs) form the basis of Australia's current military capability to ensure air superiority. Air superiority over the Australian territory and maritime approaches is an essential element in Australia's defence strategy. The audit objectives were to:

• assess whether the resources used to provide the F/A-18 tactical fighter force operational capability are managed cost-effectively; and
• identify areas for improvement in the coordination, planning and practices employed in administration of tactical fighter operations.

The audit reviewed the coordination of export development and promotion activities across Commonwealth agencies. The objective of the audit was to assess the extent to which export development and promotion activities are managed in a coordinated manner to maximise their effectiveness and transparency, and to minimise duplication. Particular attention was given to:

• Austrade's role in coordinating and advising on the development of export programs across Commonwealth agencies; and
• the design, delivery and evaluation of programs consistent with the Mortimer review design criteria agreed by Government.

The objective of the audit was to examine Coastwatch's administration of the Australian civil coastal and offshore surveillance and response service. In particular, the audit focused on Coastwatch's:

• coordination with its clients and external service providers;
• surveillance and response operations; and
• aspects of its corporate governance arrangements bearing on performance and associated accountability.

The audit reviewed the construction of facilities for the Australian Defence Force and the Department of Defence by the Defence Estate Organisation. The objective of the audit was to assess the efficiency and administrative effectiveness of the Organisation's project delivery function, highlighting effective practice and, where appropriate, making practical recommendations to enhance facilities project management. The main projects examined were the facilities required for the Army Presence in the North and the Russell Hill Redevelopment.

The audit reviewed the Commonwealth funding provided under the Home and Community Care Act 1985, for a range of personal, health and domestic services to frail aged and other people with disabilities and their carers. The objective of the audit was to form an opinion on the Department of Health and Aged Care's administration of the Home and Community Care program in particular to assess the adequacy and effectiveness of the services.

The audit reviewed the retention of military personnel that are managed by the Australian Defence Force which comprises the three Services. The objective of the audit was to review the management of personnel retention within the ADF with a view to evaluating the measures Defence has in place to monitor and control the flow of trained personnel from the Services

In late 1996, the Government announced its commitment to establish new facilities for the National Museum of Australia and the Australian Institute of Aboriginal and Torres Strait Islander Studies on Acton Peninsula in Canberra. The objectives of the audit were to examine the project's compliance with the Commonwealth Procurement Guidelines for the procurement of public works and effectiveness of the project's management.

The objective of the performance audit was to assess the administrative effectiveness of DIMA's business entry program against the background of the Business and Temporary Entry program objective, with particular regard to whether:

• the existing performance management mechanisms and compliance monitoring strategies support the achievement of program outcomes and outputs;
• the quality of decision-making;
• business processes facilitate prompt visa decision-making consistent with program objectives; and
• decision-making support mechanisms promote robust and timely decision-making.

Industry levies play a significant role in the provision of many public services and fund a range of activities undertaken by regulatory bodies such as the Australian Prudential Regulation Authority (APRA), through to financing reform of the Australian waterfront labour force. The objectives of this audit were to assess:

• the coverage, revenue and expenses of non-primary industry levies;
• the effectiveness of selected entities' financial management of non-primary industry levies; and
• areas of better administrative practice relating to the financial management of non-primary industry levies.

The Australian Taxation Office (ATO) is the Commonwealth's principal revenue collection agency. In 1998-99, the ATO accounted for total tax revenue of $135.3 billion. The objective of this audit was to review the ATO's administration of penalties, with particular emphasis on its corporate governance framework and issues relating to consistency, effectiveness and accountability of penalty administration. In particular, the audit examined the administration of two penalty types, Late Lodgement and Tax Shortfall, as case studies.

The examined the $1 billion Federation Fund program, which was established by the Government to mark the Centenary of Federation. The objectives of the examination were to assess the:

• extent to which the administration of the FCHP program complied with better practice in the assessment of applications, especially in relation to the transparency and rigour of the decision-making process;
• equity of the geographic spread of grants to States and electorates; and
• process for the announcement of the results of grant applications.

The audit objective was to form an opinion on the Department of Veterans' Affairs administration of its activities to maintain and enhance the health and independence of veterans and war widows in their homes and in the community.

This report summarises audit and other related activities of the Australian National Audit Office in the period July to December 1999.

The objective of this performance audit was to assess the effectiveness and consistency of risk management processes undertaken by the Australian Taxation Office in administering individual taxpayer refunds.

In a military context, individual readiness refers to the ability of an individual member to be deployed, within a specified notice period, on operations, potentially in a combat environment, to perform the specific skills in which he or she has been trained. Individual readiness is the foundation on which military preparedness is built. Maintenance of a specified level of individual readiness in peacetime (along with other factors such as equipment readiness and collective training) influences the speed with which personnel can deploy on operations. The objective of this audit is to ensure that members can be deployed on operations, potentially in a combat environment, to perform their specific skills within a notice period of 30 days.

The objective of this audit was to form an opinion on the adequacy of, and to identify best practice in, Commonwealth agencies' electricity procurement systems and procedures. In doing so, the ANAO also formed an opinion on the level and results of participation by Commonwealth agencies in the National Electricity Market. The audit concentrated on adherence by agencies to the principles of the Commonwealth Procurement Guidelines: Core Policies and Principles (March 1998), emphasising the importance of Commonwealth agencies achieving value-for-money (VFM) in their purchasing. VFM is one of the six principles on which the Guidelines are based.

The audit reviewed the Commonwealth management and regulation of plasma fractionation. The audit objectives were to:

• assess the administrative and financial effectiveness of the Department of Health and Aged Care's contract management of the PFA;
• assess whether the TGA's implementation of post sale regulatory arrangements adequately protects the community's interests; and
• assess the extent to which agencies have implemented the recommendations made in Audit Report No.14 1995-96 concerning funding of plasma products and regulation of plasma products manufactured under the PFA.

The objectives of this audit were to improve: the accountability of the Australian Taxation Office to Parliament and the Government by the provision of advice that follows up on the ATO's implementation of the previous ANAO Report; and on the recommendations of the then Joint Committee of Public Accounts arising from its consideration of that Report and the efficiency, effectiveness and equity of debt collection by the ATO.

The audit reviewed the operations of the Bureau of Meteorology. The Bureau's functions include the taking and recording of meteorological observations and other observations required for the purposes of meteorology; the forecasting of weather and of the state of the atmosphere; the issue of warnings of weather conditions likely to endanger life or property; the supply, publication and promotion of meteorological information; and cooperation with international meteorological agencies in relation to the functions just listed. The objectives of the audit were to:

• use national and international benchmarks to evaluate the Bureau's performance in terms of timeliness, cost and quality of weather services to meet the needs of clients; and
• assess how well the Bureau is placed in measuring its outputs/outcomes within the context of the Accrual Budgeting Framework.

Special Benefit is a social security income support payment for people who are unable to support themselves or their dependents, and who are not otherwise entitled to any other income support payment. Its objective is to ensure that such people have adequate levels of income. The objective of the audit was to assess the extent to which new claims for Special Benefit had been determined in compliance with the Social Security Act, the Guide to the Act and other relevant guidelines, and whether Centrelink and FaCS had appropriate procedures to help ensure such compliance.

The audit reviewed the operations of the Civil Aviation Authority (CASA), which has prime responsibility for regulating aviation safety in Australia. The audit objectives were to assess the efficiency and effectiveness of the management systems and procedures used by CASA to ensure compliance with regulatory controls by Air Operator's Certificate holders operating passenger-carrying aircraft within High Capacity Regular Public Transport; Low Capacity Regular Public Transport and charter industry sectors; and Certificate of Approval holders. Aviation safety compliance includes entry control, surveillance and enforcement.

Government service delivery through the Internet presents both significant opportunities and challenges in the delivery of on-line services. Depending on the level of sophistication of the application, the Internet allows Commonwealth agencies to publish information, interact with clients in the exchange of information, and/or transact business electronically. The over-all objective of this audit was to determine Commonwealth agencies' preparedness to achieve the Government's goal of all appropriate services being Internet-deliverable by 2001. The audit sought to assess:

• the extent to which agencies considered that they would be able to achieve that goal;
• what type of services agencies were delivering or planning to deliver on the Internet; and
• whether agencies had identified barriers and possible solutions to that delivery.

The audit reviewed the Commonwealth-State Housing Agreement (CSHA). CSHA is a joint arrangement between the Commonwealth and the States under which both the Commonwealth and the States contribute funding in the form of grants, which are used by State Housing Authorities to provide a variety of housing assistance programs to households on low incomes and those with special needs. The overall objective of the audit was to assess and report to Parliament on how effectively the Department of Family and Community Services (FaCS - formerly the Department of Social Security) administered the CSHA and to identify any areas where improvements could be made.

The Superannuation Guarantee, which came into effect on 1 July 1992, was introduced to reduce reliance on the age pension as a means of funding retirement for individuals. The objective of the performance audit was to review the ATO's administration of the Superannuation Guarantee and to identify appropriate opportunities for improvement.

The audit reviewed Australian Development Scholarships (ADS). ADS's are the principal mechanism by which Australia provides scholarship assistance for individuals from developing countries to undertake studies at Australian education institutions. The scholarships help to meet the human resource development needs of developing countries and contribute to their development across various sectors. Scholarships also have an important role in fostering and sustaining Australia's relations with developing countries, particularly in the Asia-Pacific region. The objective of the audit was to evaluate AusAID's management of the ADS scheme.

The audit reviewed Commonwealth debt management procedures. The audit objectives were to:

• review, and consider opportunities to improve, the reporting and disclosure of the Commonwealth's public debt;
• assess the effectiveness of the raising, management and retirement of Commonwealth debt, consistent with an acceptable degree of risk exposure; and
• determine whether there are opportunities to improve the Commonwealth's approach to the raising, management and retirement of Commonwealth debt.

The Department of Defence spends some $2.4 billion a year on major equipment acquisition projects. The audit objective was to assess Defence's arrangements for higher-level management of major equipment acquisition projects. The principal aim was to formulate practical recommendations that would both enhance Defence's management of major acquisition projects and provide a degree of assurance about its ongoing apparent capacity to do so efficiently and effectively.

This audit examined the management of contracts for business support processes in eight Commonwealth organisations-six operating under the Financial Management and Accountability Act 1997, and two operating under the Commonwealth Authorities and Companies Act 1997. The objectives of this audit were to:

• provide assurance on the effectiveness of the management of contracted business support processes in selected organisations; and
• identify and disseminate better practices in related contract management.

In November 1998, the Minister for Communications wrote to the Auditor-General requesting an assessment of the actual costs of Phase 1 digital conversion for the ABC and SBS, the sources of funds applied and the efficiency with which the funds had been used before the government considered further funding. The purpose of this limited scope performance audit was to assess a range of financial issues associated with the ABC and SBS conversion to digital broadcasting.

The audit reviewed management of the Commonwealth's role in preparing for, and managing, pest and disease emergencies requiring a rapid response. The audit focused on the role of the Department of Agriculture, Fisheries and Forestry -Australia (AFFA), which is the Commonwealth Department with primary portfolio responsibility for coordinating the national and international response to an emergency. The audit did not address preventative measures such as quarantine and border controls; controlled release of exotic diseases or pests; or emergencies associated with previously known endemic diseases, food safety or chemical residue issues.

The objective of this audit was to assess the systems put in place by Centrelink to protect data privacy. The audit reviewed the adequacy of the policies, procedures and the administrative framework associated with data privacy, and the computer systems that are used to store and disseminate data. The ANAO also examined compliance with legislative requirements.

This audit was a follow-on to Audit Report No.21 1997-98 Protective Security, which reviewed, among other things, information security other than computer and communications security, against the policy and procedures outlined in the 1991 PSM. That audit found inconsistencies in the identification and marking of classified information and weaknesses in the handling and storage of classified information, as well as other breakdowns impacting on information security.

This report summarises audit and other related activities of the Australian National Audit Office in the period January to June 1999.

The audit reviewed the productivity and client service of IP Australia, a division of the Department of Industry, Science and Resources, which provides intellectual property rights in respect of patents, trade marks and designs. The objective of the audit was to examine the effectiveness of IP Australia's management of productivity and client service.

The audit reviewed fraud control arrangements in the Department of Employment, Education, Training and Youth Affairs. The objective of this audit was to establish whether the Department had developed a sound fraud control framework by examining the arrangements for: · policy and planning; · performance assessment; · quality assurance; and · training and awareness raising.

All persons, other than Australian nationals, are required to hold a visa to enter and stay in Australia. This audit's focus is on the entry component of the visa process and specifically the Electronic Travel Authority (ETA). The ETA is an electronically-stored authority for travel, which facilitates the entry of tourists and short-term business travellers from countries where the risk of non-compliance with visa conditions is low, that is, in countries classified as ‘low risk'. The objective of the performance audit was to assess the administrative effectiveness of the ETA.

The effective use of financial information is a critical component of an organisation's performance management framework. The appropriate combination of financial and non-financial data reflects overall organisational performance, and performance at program and work unit levels. The objective of this audit was to assess what financial information is currently used, who uses it and how well it is used. The audit also assessed whether the current processes for defining, accumulating and producing financial information were appropriate for the new accrual based performance management framework, which is to be in place for 1999/2000.

The audit reviewed the implementation of the purchaser/provider arrangements between the Department of Health and Aged Care and Centrelink. The objective of the audit was to determine the administrative effectiveness of the implementation of the service delivery arrangements between Centrelink and the Department by examining project planning for, and management of, the implementation, and the establishment of on-going purchaser/provider arrangements.

The objective was to assess the extent to which staff reductions have been managed in a sound strategic and cost-effective manner consistent with the Government's guidelines and the ANAO's 1996 better practice guide Managing APS Staff Reductions. The audit focussed on 3 agencies - the Australian Taxation Office, the former Department of Primary Industry and Energy, and the former Department of Transport and Regional Development. The ANAO found that the majority of staff reductions were achieved through retrenchment rather than natural attrition; and that decisions on the number of retrenchments were not always supported by an assessment of the impact of the reductions on the agencies' abilities to conduct their business.

The sale of leases for the 14 Phase 2 Federal airports was completed by 30 June 1998, in accordance with the Government's timetable. This represented a significant achievement given that it constituted the largest completed airport trade sales program in the world to that date and achieved the Government's sales objectives.

The objectives of the audit were to form an opinion on the management of Commonwealth agencies' compliance with the Commonwealth's energy efficiency requirements and to identify areas for better practice in energy management. The audit focussed on:

• the implementation of the Energy Policy by Commonwealth Agencies; promulgation and coordination of energy use targets;
• energy and associated reporting by Commonwealth agencies;
• identification, examination and analysis of systemic and procedural impediments to achieving the Energy Policy; and
• development and discussion of ways to address these impediments.

Members of the Australian Defence Force (ADF) have informal and formal complaint mechanisms available to them to address grievances. Initially, members are advised to seek resolution of their complaint at the lowest possible level, through the normal command channels and administrative arrangements. A member who is not satisfied that a complaint has been resolved in this manner may use the Redress of Grievance (ROG) system to submit a formal complaint to the commanding officer of the member's unit. The objective of this audit was to ascertain whether the ROG system could be refined to improve the efficiency and timeliness of processing of complaints while preserving the equity and transparency the current system provides.The Redress of Grievance system is clearly time-consuming and resource intensive. Some grievances have taken as long as four years to resolve. Some could be resolved by administrative means rather than through recourse to grievance processes. The system contains various inefficiencies that detract from its cost-effectiveness from the viewpoint of the ADF and individual members. In addition many members are unaware of the system or do not have a high level of confidence in its effectiveness.

The audit is a follow-up to Audit Report 12, 1995-96 Risk Management by Commonwealth Consumer Product Safety Regulators. The objectives of this follow-up audit were to determine the extent to which ANZFA had implemented the agreed recommendations contained in the 1995 Audit Report, and to determine the effectiveness of the implemented recommendations in improving food safety regulation.

The audit reviewed the efficiency and effectiveness of Defence's management of Naval Aviation Force (NAF) in achieving its required capability within budgeted resources. The objectives of the audit were to assess whether planning, management and resource allocation mechanisms and practices for NAF were conducive to achieving the latter's objectives in a cost-effective manner.

Networking the Nation was established with effect from 1 July 1997 to support activities and projects designed to meet a range of telecommunications needs in regional, rural and remote Australia. Funding is provided by the Regional Telecommunications Infrastructure Fund. The program provides total support of $250 million, of which $50 million was to be allocated annually for the five year period from 1997-98. Funding decisions for grants are the responsibility of an independent Board appointed by the Minister for Communications, Information Technology and the Arts. The objectives of the audit were to examine the administration of the program with a view to ascertaining the scope for improving administration and to provide assurance on the equity, efficiency and effectiveness of the management and administrative processes applied in the administration of grants under the program.

The objective of the audit was to examine the effectiveness and efficiency of the administrative arrangements for the establishment and operation of the Green Corps program. Green Corps is a voluntary program for young Australians between 17 and 20 years old to receive accredited training in a range of skills such as bush regeneration and habitat protection. The program is delivered through a contractual arrangement. It was introduced in 1996 with a program allocation of $41.7 million over three years. The focus of the audit was on the Department of Education, Training and Youth Affair's administration of the program, including the management of the contract.

The objective of the audit was to assess the effectiveness of, and to identify possible areas for improvement in, Defence management of the general service fleet.

The Pharmaceutical Industry Investment Program (PIIP) is a scheme that was introduced to compensate the pharmaceutical industry, in part, for the impact of the Government exercising its monopsony power under the Pharmaceutical Benefits Scheme. The ANAO undertook an audit of the probity of the methodology and procedures applied by the Department in assessment of applicants for PIIP funding. The objectives of the audit were to assist the Department, at its request, in the timely identification of deficiencies in assessing responses from applicants and options for addressing any such deficiencies.

The audit reviewed the National Aboriginal Health Strategy (NAHS) component of the Aboriginal and Torres Strait Islander Commission's (ATSIC) Community Housing Infrastructure Program (CHIP). A major NAHS objective is to improve environmental health in indigenous communities through the construction and housing and the provision of water, sewerage and related systems. The objective of the performance audit was to form an opinion on ATSIC's management of the National Aboriginal Health Strategy program in providing housing and related infrastructure to Aboriginal and Torres Strait Islander communities, and to identify areas where program administration could be improved.

The objective of the preliminary study was to form a view regarding the quality of, and controls over, the Budget estimates and to inform the decision whether to proceed to a full performance audit at this time. On the basis of the quantitative and qualitative analysis of the budget process undertaken during the study, the ANAO concluded that there are no apparent systemic problems in the cash-based estimating processes in the agencies reviewed that would, in themselves, lead to material statistical inaccuracies in the Budget's projected outcomes. The ANAO decided not to proceed with a full performance audit at this time.

The purpose of the report was to report to the Parliament on how effectively and efficiently the Australian Taxation Office administers the Tax File Number System, and to identify opportunities for improvement of that system. The ANAO developed a methodological framework for the evaluation of the efficiency and effectiveness of the ATO's administration of the TFN system. The framework examined the TFN system; individuals and their TFNs; TFN withholding tax arrangements; and TFN information matching.

The objective of the audit was to assess key aspects of the Australian Taxation Office's administration of the PAYE system in relation to employers' remittances and to identify opportunities for improvement. The audit focussed on four areas:

• remittance monitoring, especially managing late remittances;
• follow-up action for end of year reconciliation, including discrepancies;
• handling compliance intelligence gained from the public; and
• ATO compliance projects.

The audit objective was to determine the DVA's performance in the economy, efficiency and administrative effectiveness of the delivery of income support payments to veterans and war widows. It was found that overall, DVA is paying the correct pension to the correct people in a timely fashion within the required accuracy levels.

The objective of the audit was to ascertain and report to Parliament on the Australian Taxation Office's administration of the Fringe Benefits Tax and to identify opportunities for improvement. The ANAO identified five key issues relevant to the effective administration of FBT:

• knowledge of the taxpayer base;
• education of taxpayers;
• client service - advice handling;
• other enforcement activities - audits and reviews; and
• the systems required to support the administration of FBT, including staff skills and training information systems.

This report summarises audit and other related activities of the Australian National Audit Office in the period July to December 1998.