Acting Auditor-General’s foreword

The Australian National Audit Office (ANAO) Corporate Plan 2024–25 updates the previous corporate plan and outlines how we intend to deliver against our purpose over the next four years (2024–25 to 2027–28).

The corporate plan is the ANAO’s primary planning document — it outlines our purpose; the dynamic environment in which we operate; our commitment to building capability; and the priorities, activities and performance measures by which we will be held to account. The plan highlights our desire to engage positively and transparently in delivering audit and support services to the Parliament. In addition, the plan details our approach to risk management, which is critical to successfully meeting our responsibilities in providing professional and independent audits to the Parliament.

The corporate plan is part of our strategic planning process. This process allows us to continually improve organisational practices and capability and demonstrate value in delivering our services to the Parliament. The corporate plan should be read in conjunction with the annual audit work program, which reflects the ANAO’s audit strategy for the coming year.

Statement of preparation

As the accountable authority of the Australian National Audit Office under the Auditor-General Act 1997, I am pleased to present the ANAO Corporate Plan 2024–25, which covers the period 2024–25 to 2027–28, as required under paragraph 35(1)(b) of the Public Governance, Performance and Accountability Act 2013.

Rona Mellor
Acting Auditor-General for Australia
1 July 2024

A summary of the ANAO’s purpose, outcome, programs and shared activity is shown in Figure 1.

Figure 1: ANAO’s purpose, outcome, programs and shared activity

Note: The ANAO’s three programs and one area of shared activity are outlined in the Portfolio Budget Statements 2024–25. Performance measure numbers refer to numbers used in this corporate plan.

Our purpose

The purpose of the Australian National Audit Office is to support accountability and transparency in the Australian Government sector through independent reporting to the Parliament, and thereby contribute to improved public sector performance.

The ANAO delivers its purpose under the Auditor-General’s mandate in accordance with the Auditor-General Act 1997, the Public Governance, Performance and Accountability Act 2013 and the Public Service Act 1999.

The executive arm of government is accountable to the Parliament for its use of public resources and the administration of legislation passed by the Parliament. The Auditor-General provides independent assurance as to whether the executive is operating and accounting for its performance in accordance with the Parliament’s intent (Figure 2).

Figure 2: How the ANAO delivers its purpose

The Governor-General, on the recommendation of the Joint Committee of Public Accounts and Audit (JCPAA) and the Prime Minister, appoints the Auditor-General for a term of 10 years. As an independent officer of the Parliament, the Auditor-General has complete discretion in the performance or exercise of the functions or powers under the Auditor-General Act 1997 (the Act). In particular, the Auditor-General is not subject to direction in relation to:

• whether a particular audit is to be conducted;
• the way a particular audit is to be conducted; or
• the priority given to any particular matter.

In exercising the functions or powers under the Act, the Auditor-General must have regard to the audit priorities of the Parliament, as determined by the JCPAA and any reports made by the committee under the Public Accounts and Audit Committee Act 1951.

Under the Auditor-General Act, the Auditor-General’s functions include:

• auditing the annual financial statements of Commonwealth entities, Commonwealth companies and their subsidiaries, and the consolidated financial statements;
• conducting performance audits and assurance reviews;
• audits of the annual performance statements and performance measures of Commonwealth entities and Commonwealth companies and their subsidiaries;
• conducting a performance audit of a Commonwealth partner as described in section 18B of the Act;
• providing other audit services as required by other legislation or allowed under section 20 of the Act; and
• reporting directly to the Parliament on any matter or to a minister on any important matter that comes to the attention of the Auditor-General.

The Auditor-General’s functions are a key component of the accountability and integrity framework, and form part of the core business of Australian public sector entities. The Act sets out the requirements for entities to engage with the Auditor-General in the carrying out of Auditor-General functions.

The ANAO supports the Auditor-General in this role.

ANAO values

The ANAO upholds the Australian Public Service (APS) values as set out in the Public Service Act 1999. The ANAO places particular focus on respect, integrity and excellence — values that align with the APS values and address the unique aspects of the ANAO’s business and operating environment. The ANAO’s values guide the office in performing its role objectively, with impartiality and in a manner that supports the Parliament.

Corporate structure

The ANAO is organised into six functional areas:

• Corporate Management Group leads corporate strategy and operations for the ANAO. It provides enabling services based on specialised knowledge in the areas of finance, human resources, information technology, governance, communications, change management, legal support and the management of the ANAO’s external relations.
• Financial Statements Audit Services Group provides independent assurance on the financial statements and financial administration of all Australian Government entities. It also conducts assurance reviews.
• Performance Audit Services Group conducts performance audits and assurance reviews of Australian Government entities and their activities, and produces performance audit publications, including the annual Major Projects Report on Defence equipment acquisitions, and information reports.
• Performance Statements Audit Services Group conducts audits of Australian Government entities’ annual performance statements and measures.
• Professional Services Group provides technical accounting, audit and legal advice and support to the Auditor-General; and establishes, manages and monitors the implementation of the quality management and integrity frameworks.
• Systems Assurance and Data Analytics Group provides IT and data analytics support to the ANAO’s full range of audit work.

The ANAO website contains further information about the ANAO’s structure.

Key relationships

The ANAO’s primary relationship is with the Australian Parliament and the ANAO’s key interaction with the Parliament is through the JCPAA. Among its responsibilities, the JCPAA considers the operations and resources of the ANAO, including the ANAO draft budget estimates, about which it makes recommendations to both houses of parliament. The JCPAA is required to review all ANAO reports that are tabled in the Parliament and to report the results of its deliberations to both houses of parliament. The committee’s functions in relation to the ANAO are specified in the Public Accounts and Audit Committee Act 1951.

The Auditor-General, supported by the ANAO, assists the work of the Parliament by providing independent reporting, in the form of assurance and opinions, as to whether the executive is operating and accounting for its performance in accordance with the Parliament’s intent. The ANAO further supports the Parliament by appearing before, and providing submissions, briefings and other information to, parliamentary committees, as well as providing briefings to parliamentarians. The Parliament and its committees also scrutinise the work and administration of the ANAO.

The ANAO’s relationship with the accountable authorities of Australian Government entities is important, as accountable authorities have a duty to govern in a way that promotes the proper (that is, efficient, effective, economical and ethical) use of public resources, the achievement of their entity’s purpose, and the financial sustainability of their entity. The ANAO purposefully engages with Australian Government entities to drive accountability and transparency and support the improvement of public sector performance. This engagement includes attending audit committee meetings of Australian Government entities.

As Australia’s supreme audit institution, the ANAO has close links with the international and regional public sector auditing community through the International Organization of Supreme Audit Institutions and its related regional organisations, particularly the Pacific Association of Supreme Audit Institutions and the Asian Organization of Supreme Audit Institutions. The ANAO contributes to the Australasian public sector auditing community as a member of the Australasian Council of Auditors-General. The ANAO invests in its external relationships to support learning through the two-way exchange and sharing of information and practices. It also supports other nations through peer-to-peer institutional capacity development, including through our participation in the Australian Government’s development program in the Indo-Pacific region.

The ANAO values its relationships with the Australian Accounting Standards Board and the Auditing and Assurance Standards Board in their roles of setting and maintaining professional and ethical standards for the accounting and auditing professions, which underpin the delivery of quality audit services.

The ANAO website contains further information about the ANAO’s relationships.

Strategic planning framework

The ANAO’s governance and strategic direction are underpinned by a strategic planning framework (Figure 3). The corporate plan is the ANAO’s primary planning document and covers the next four-year period, 2024–25 to 2027–28. From this plan, the ANAO’s annual priorities flow into the annual audit work program, business plans, and then to individual performance agreements. The ANAO reports on its activities through its annual report.

Figure 3: ANAO’s strategic planning framework

This section sets out the nature of the ANAO’s operating context and environment over the four-year period of this corporate plan. It outlines how factors and changes in the environment may affect and influence the focus of the ANAO’s annual audit work program . Understanding, adapting and responding to changes in our operating environment is critical to delivering on the ANAO’s purpose.

Supporting the Australian Parliament

The ANAO will seek to achieve its purpose by supporting the Auditor-General to exercise the functions under the Auditor-General Act 1997. Key activities will include a program of audit and assurance engagements to provide assurance to the Australian Parliament on entities’ administration and financial statements, and the preparation of reports to inform the Parliament on aspects of Commonwealth administration and performance.

The ANAO will further support the Parliament through ongoing assistance to parliamentarians and committees, particularly the Joint Committee of Public Accounts and Audit (JCPAA), which has statutory duties relating to the ANAO under the Public Accounts and Audit Committee Act 1951. These duties include examining all Auditor-General reports that are tabled in the Parliament; endorsing the recommendation of the Prime Minister to the Governor-General on the appointment of an Auditor-General; making a recommendation on the operations and resources of the ANAO (including the ANAO draft budget estimates); and providing feedback on the draft ANAO annual audit work program to reflect the priorities of the Parliament.

The ANAO’s close working relationship with the JCPAA has developed over time to achieve our shared purpose of improving transparency and accountability across government. It is this relationship, and the processes underpinning it, that assist ANAO reports to have an impact across of the sector — the committee uses our work to conduct inquires, hold public hearings and produce reports that bring transparency, drive accountability and aim to improve public sector performance. The ANAO will continue to actively engage with and provide advice to the JCPAA.

In supporting the Parliament, the ANAO recognises the complexities of auditing in a contestable environment. Notably, government and service provider information is being held not only as commercial-in-confidence, but at increasingly higher levels of security classification. We will continue to manage these complexities in the conduct of our work. Access to information is critical to the audit process, providing the foundation for substantive, accurate, evidence-based conclusions that meet audit standards. Ensuring the Auditor-General has contemporary access powers in a changing environment is essential to providing assurance to the Parliament through audit reports. The ANAO will remain focused on driving transparency through our public reports to assist the Parliament in holding executive government to account.

In an environment where accountable authorities are charged with delivering the government’s agenda, the ANAO identifies delivery risks against the frameworks established by the Parliament, the government and by accountable authorities themselves. Tension between frameworks can be identified when the delivery does not comply with mandatory requirements that the Parliament expects. Through the work of the JCPAA and other parliamentary committees, the Parliament is seeking assurance at a system-level including transparency of the operation of public sector frameworks, such as the:

• performance reporting, corporate planning and risk management, procurement and grants rules under the Public Governance, Performance and Accountability Act 2013;
• Protective Security Policy Framework, including cybersecurity rules; and
• ethical decision-making in the public sector, including the requirements of the Public Service Act 1999 and the use of emerging technologies.

The Parliament is increasingly seeking insights from the ANAO on the relationship between compliance and organisational culture. Findings within our performance audits present strong evidence that public sector ethics, integrity and probity need to be an ongoing focus of our work. Our audits continue to find that in routine areas of public administration (e.g. record keeping, governance, procurement and risk management), performance consistently falls short. Compliance — not just with mandatory requirements, but also their intent — is a hallmark of integrity, and essential to the craft of public administration.

The ANAO will continue to focus on providing transparency and accountability on regulatory frameworks, and the relationship with organisational culture, through our audit work.

New audit products and standards

The ANAO will support the Parliament by continuing the staged implementation of performance statements audits and further assessing entities’ ethical and efficient use of public resources. Readiness to audit sustainability reporting within the sector will be a key focus of the ANAO in 2024–25.

Performance statements audits

Non-financial performance reporting is a key tool for Parliament to scrutinise the work of the public sector. To support the Parliament and contribute to further maturity in the Australian Government sector’s performance reporting, the ANAO’s Portfolio Budget Statements 2022–23 introduced a new program for the staged implementation of performance statements audits. The purpose of the program, and its related audits, is to drive improvement in the quality of entities’ performance reporting to the Parliament and the public, against the requirements of the Commonwealth Performance Framework.

The annual performance statements audits encourage entities to invest in the planning, monitoring and reporting capabilities needed for high-quality performance information. The audits conducted in 2023–24 showed improvement in entities’ processes and capability to develop high-quality performance information for presentation to Parliament.

The ANAO will continue to refine its audit methodology to ensure it remains fit for purpose. The ANAO’s Performance Statements Expert Advisory Panel plays an important role in guiding maturity of the audit program as it reaches full implementation. The ANAO provides end-of-year reports to the Parliament on this program of work.

The ANAO will continue to work closely with the Department of Finance, as the policy owner of the Commonwealth Performance Framework, to support ongoing improvements to performance reporting and evaluation.

Auditing ethics and efficiency

The Public Governance, Performance and Accountability Act 2013 (PGPA Act) requires accountable authorities of Commonwealth entities to govern their entities in a way that promotes the proper use and management of public resources. The PGPA Act defines ‘proper’, when used in this context, to mean efficient, effective, economical and ethical. The ANAO assesses all aspects of the proper use of resources, with effectiveness being the most common of these objectives examined.

The importance of ethics in government programs has been highlighted in several audits, particularly in procurement and grants administration. A theme that we have identified across a number of audits is a lack of adequate documentation and records to support the rationale for decisions made and actions undertaken. Lack of proper documentation of decision-making processes makes it difficult for entities to be assured that the activity was undertaken with integrity and without improper influence or consideration of inappropriate factors.

Audit work has shown that a culture of integrity in an organisation flows from the standards set by its leaders. In November 2022, the ANAO finalised the design of an audit framework against which to test ethics. We have applied this new methodology in our work, and several audit reports tabled in the Parliament express a view on whether entities have acted ethically and with integrity in the delivery of government programs. The ANAO will continue to focus on the ethical aspect of proper use and management of public resources, including entity governance and ethical frameworks.

Alongside an ethical approach to spending taxpayers’ money, efficiency is an important consideration in the management of public resources. In a public sector auditing context, efficiency is primarily about entities making the most of available resources — that is, minimising inputs used to deliver the intended policy outputs in terms of quality, quantity and timing. In 2016, the ANAO developed and implemented an audit methodology for undertaking performance audits focused on efficiency. In 2023–24, we reviewed and reissued the methodology to enhance the guidance provided to auditors. We will continue to implement the revised methodology and maintain a focus on efficiency as an aspect of the proper use and management of public resources.

Sustainability reporting

In November 2023, the Australian Government announced its Net Zero in Government Operations Strategy. The strategy describes the approach for implementing the government’s commitment to achieve net zero government operations by 2030, as included in the 2022 communication of Australia’s nationally determined contribution under the 2015 Paris Agreement on climate change.

Sustainability reporting has developed globally, primarily in the private sector, as sustainability factors become a mainstream part of investment decision-making. The first stage of sustainability reporting under the Australian Government strategy is the introduction of mandatory climate-related disclosures in the annual reports of Commonwealth entities and companies. The disclosures are intended to provide Australians and investors with greater transparency and more comparable information about an entity’s exposure to climate-related financial risks and opportunities, and climate-related plans and strategies.

The ANAO has been working with the Department of Finance to develop an assurance and verification regime for sustainability reporting. This includes the phased implementation of audits of Commonwealth entities, starting with a small number of entities and gradually increasing to bring the climate-related disclosures of all entities within the scope of auditing.

Readiness to audit sustainability reporting will be a key focus of the ANAO in 2024–25. We will consider the Auditor-General’s audit mandate, internal resourcing requirements, the training needed to support staff capability and development, access to specialist expertise, and the appropriate organisational design to support the implementation of this activity.

Shifting priorities in the public sector

The ANAO must maintain a contemporary understanding of the public sector. This understanding is critical in supporting the delivery of an integrated audit work program that provides assurance on public sector performance to the Parliament. Failure to adequately respond to changes in the government sector could negatively impact:

• confidence in the ANAO;
• the ANAO’s ability to contribute to improved performance and accountability in the public sector; and
• the effective and professional operation of the ANAO.

Under the powers in the Auditor-General Act 1997, the Auditor-General is not subject to direction on whether a particular audit is to be conducted or what priority is to be given to any particular matter. In this context, the ANAO remains attuned to significant shifts in public administration that may impact the development of our work program. Under the Auditor-General Act 1997, the Auditor-General must have regard to the audit priorities of the Parliament determined by the JCPAA. To meet this requirement, the ANAO provides a draft annual audit work program to the Parliament through the JCPAA, for consultation on the audit priorities of the Parliament. The JCPAA may seek input from other parliamentary committees to develop a consolidated response on the audit priorities of the Parliament. The ANAO also invites feedback from accountable authorities of Australian Government entities included in the proposed audit coverage, members of the public, the Commonwealth Ombudsman, the Inspector-General of Taxation, the Inspector-General of Intelligence and Security, the acting Inspector-General of Aged Care, the National Anti-Corruption Commissioner, and the Australian Information Commissioner.

Australian Public Service reform

In November 2023, the Department of the Prime Minister and Cabinet released the final report of the APS Integrity Taskforce, Louder Than Words: An APS integrity action plan. The report presents 15 recommendations to address recent lessons in public administration and improve integrity standards across the service. The action plan acknowledges the importance of integrity institutions in the sector and their respective roles in driving accountability and transparency.

As a member of the Integrity Agencies Group, the ANAO has an important role to play as the public sector auditor. Our work provides unique insights into the performance and operations of entities in key areas such as governance, procurement and risk management. In this way, we are able to form views on key elements of organisational culture, including those behaviours that relate to integrity and ethical conduct.

As part of the suite of APS reforms, amendments to the Commonwealth Fraud Rule (section 10 of the Public Governance, Performance and Accountability Rule 2014) come into effect from 1 July 2024. Under the new Commonwealth Fraud and Corruption Rule, entities will be required to take measures to prevent, detect and deal with corruption, alongside existing counter-fraud requirements. The changes to the Commonwealth Fraud Rule — and the implementation of the new Commonwealth Fraud and Corruption Control Framework from 1 July 2024 — complement the establishment of the National Anti-Corruption Commission.

Similarly, in October 2023, the Minister for the Public Service released the APS Strategic Commissioning Framework. The framework, published by the Australian Public Service Commission, reflects the government’s commitment to rebuilding the capability and expertise of the APS by requiring that core government work be done by APS employees, and by restricting outsourcing to defined circumstances. The ANAO will monitor the impact of these changes on the sector.

Emerging public sector risks

As part of our environmental scanning, the ANAO also considers emerging risks from new and ongoing investments within the public service operating environment — particularly where prior-year audit and other review findings suggest risks associated with program sustainability. This is especially important with service delivery programs that represent a significant financial commitment by government, and thereby bring significant risk. The National Disability Insurance Scheme, established under the National Disability Insurance Scheme Act 2013, is an example of such a service delivery program. The National Disability Insurance Agency manages a significant volume of taxpayer funding through payments to individuals and providers.

Similarly, in June 2022, the Australian Government lodged an updated nationally determined contribution (NDC) under the 2015 Paris Agreement on climate change. The updated NDC communicates Australia’s commitment to reduce greenhouse gas emissions and build resilience to adapt to climate change. The Climate Change Act 2022 makes consequential amendments to 14 Acts to support the effective implementation of the updated NDC. It embeds Australia’s greenhouse gas emissions reduction targets into the objectives and functions of a range of Commonwealth entities and schemes. Public sector responsibility for managing and coordinating implementation risks is broad and complex. Increased areas of risk in program or policy implementation often mean adjusting audit risk profiles. The ANAO will continue to monitor these areas of critical government administration to ensure that such substantial investments of resources not only meet the requirements set out within public sector frameworks, but also deliver the intended outcomes for the Australian public.

Shifts in public sector priorities are also heavily influenced by the ever-changing nature of technology. While often enabling operational improvements, advances in technology and changes within the IT landscape also create challenges within the sector, especially in preserving resilient national security. The increasing use of emerging technologies — such as machine learning and artificial intelligence — is under consideration in the APS and the Parliament.

At a global level, data breaches are illustrating the importance of maintaining personal privacy when managing large datasets. With growing cybersecurity threats, organisations need to understand their information and data risks and protect their critical information assets — including private, sensitive and security-classified data — from malicious actors. Appropriate security can only be maintained through a considered and appropriately resourced approach to cyber resilience, supported by effective cyber controls. Appropriate cybersecurity, and the assurance of it will remain a focus of our audit work.

Public sector information management

Deficiencies in record keeping within the public sector remains a risk for entities in evidencing decision making and creates issues for transparency and review, including for auditing. Management of information by entities, including the appropriate classification and storage of information, remains a key issue for the sector.

For the auditor, poor record-keeping practices have resulted in different approaches to information gathering. To gather sufficient evidence, the ANAO regularly accesses large amounts of data and information in entity systems in the absence of well-structured data sets. As a result, the ANAO has increased the use of its formal information-gathering powers at the request of entities to ensure that data gathered in this way, which may contain information protected by legislation, is lawfully disclosed to the ANAO.

The efficient collection of sufficient and appropriate information — to form substantive, accurate, evidence-based conclusions — is critical to our work. Preserving and refreshing the Auditor-General’s information-gathering powers in the shifting environment of the public service remains a key issue for the ANAO.

Impact of new legislation

The ANAO must remain cognisant of changes to existing laws and to legislation, especially developments that may impact, or may be perceived to impact, the independence of the Auditor-General.

In September 2020, the JCPAA resolved to undertake a review of the Auditor-General Act 1997 (the Act). The ANAO’s submission to the review was based on strengthening the independence of the Auditor-General and the ANAO — including the creation of the ANAO as a parliamentary department.

In March 2022, the JCPAA concluded the 2020 review of the Act and presented Report 491: Review of the Auditor-General Act 1997 to the Parliament. In the report, the JCPAA noted that it is vital that the Act remains fit for purpose — specifically, that the Act must continue to assure the Auditor-General’s independence and remit, establish clear processes, and interact consistently with other legislation. The report made 27 recommendations, including amendments to the Act and other related legislation. The ANAO considers that the report by the JCPAA provides a strong foundation to strengthen the independence of the Auditor-General and, as a result, the position of the ANAO within the public sector. Amendments to the legislation could provide greater clarity for future ANAO information gathering to allow more clearly for remote access, and to enable the Auditor-General to specify the form of requested information.

The ANAO continues to stay abreast of changes to policy and legislation within the public sector, including whole-of-government measures. While whole-of-government measures can create operational efficiencies within the public service, requirements for the ANAO to participate in such measures can reduce our ability to provide independent reporting on the accountability and transparency of such arrangements. The ANAO will continue to monitor emerging whole-of-government measures and possible impacts on the ANAO, specifically where they present conflicts for our independence and ability to deliver on our purpose.

The ANAO is aware of recent legislative changes, which took effect on 1 July 2024, including:

• amendments to the Commonwealth Fraud Rule (section 10 of the Public Governance, Performance and Accountability Rule 2014) to include corruption; and
• changes to the Commonwealth Procurement Rules.

The ANAO is also aware of several proposed legislative changes, including:

• amendments to the Corporations Act 2001 related to sustainability disclosures and reporting; and
• changes to the Environment Protection and Biodiversity Conservation Act 1999 to establish Environment Protection Australia and Environment Information Australia.

The ANAO will monitor the impact of these changes on the sector.

Audit profession

Auditing is an important profession. The demand for skilled auditors is high globally as public and private sectors respond to increasing community expectations of transparency and assurance in their activities. The importance of high-quality audit work has meant significant growth and demand for auditing skills across both sectors — as such, we remain alert to changes in the audit profession and their impact on the ANAO workforce.

The ANAO is a professional organisation well-regarded for its strong technical and specialist skills. It is through our high-quality, high-performing people that the ANAO produces quality audits and delivers on its purpose to the Parliament. We must continue to invest in our people to support audit now and into the future.

Continual building of staff skills will remain a focus over the next four years, through the office’s ability to attract, retain and develop quality people. Auditors will always need deep knowledge and experience in traditional areas such as auditing standards, financial accounting and reporting, internal controls, information technology, managerial accounting, and taxation. ANAO auditors also need to have:

• good communication skills;
• deep industry expertise;
• strong digital skills;
• the ability to think critically and creatively; and
• the ability to use technology to collect and analyse audit data.

Community interest in the integrity of the audit profession is a key focus for the ANAO. In response to the community’s high expectations of the audit profession to perform its functions independently and professionally, integrity, ethics and quality in auditing will remain cornerstones of the ANAO’s work.

Maintaining adequate resources is a critical area of focus for the ANAO in building our workforce capability. Attrition in the profession, whether in public or private sector auditing, is typically high. Over the past several years, the ANAO has observed challenges in the university sector — particularly the decline in enrolments in degrees that typically lead to careers in the financial auditing profession.

The ANAO also recognises the challenges associated with building capability within the performance audit profession. Performance auditing is not a specific university discipline, and it requires considerable on-the-job learning. These factors, coupled with the increasing demand for audit-related expertise, have resulted in a competitive recruitment environment and tight labour market. The ANAO will continue to monitor the trends emerging across the sector, particularly those that may have long-term impacts on the supply of appropriate candidates who are essential to our audit programs.

The ANAO will continue to look for opportunities to build our workforce capability, while maintaining a culture of professionalism and excellence and retaining a strong cohort of leaders who can effectively respond to current and emerging challenges.

Technology and data

In delivering our work to the Parliament, it is critical that the ANAO remains responsive to technology and data changes, specifically in analysing how government is using technological advances to support program implementation, service delivery and risk management. The ANAO recognises that entities are continuously seeking opportunities to advance their technology by implementing automated and standardised approaches to find efficiencies, manage risk and support sound decision-making. The ANAO is maintaining a watch over the emerging use of artificial intelligence (AI) in the public sector, both in terms of the auditability of the technology and its use, and the use of AI in auditing itself.

For public sector entities, data analytics can inform evidence-based policy, drive risk-based compliance and regulatory activities, and enable performance monitoring and measurement. The collection, storage and use of data to inform business within the public sector continues to grow. The ANAO has invested in building data analytics capability within our audit work. Data analytics has enabled the ANAO to better identify financial reporting, fraud and operational business risks, and tailor our approaches to deliver more targeted risk-based audits. Data analytics has enabled the analysis of larger samples and population-based data to give confidence in the evidence bases we use to support opinions. Our continued investment in data analytics, coupled with a digitally confident workforce, will enable the ANAO to better use data to strengthen audit outcomes and present data in a more accessible way to the Parliament.

The effective use of technology to support cooperation and communication with entities remains a key focus for the ANAO. We are working closely with public sector entities to increase opportunities for remote access to entity systems. The ANAO will continue to leverage technology to support the delivery of our work, maintain connection with entities, and increase the flexibility of our audit approach.

The ongoing development of the ANAO’s capability ensures that we can continue to achieve our purpose. Investments in capability also support the ANAO to uphold public sector principles and values, while building sufficient flexibility and expertise to meet future needs.

Over the next four years, the ANAO intends to make capability investments in several key areas — workforce; productivity; technology, data and information management; and quality.

Workforce

The ANAO is a professional organisation of people with strong specialist and technical skills. Our work is challenging but rewarding — being an auditor at the ANAO means seeing things across the entire Australian Government sector and having a real impact on public sector performance. We are committed to investing in our people and supporting their development as leading audit and public service professionals.

Auditing is an important profession, and we recognise that our people are our most valuable asset. While the fast-paced, information-driven environment of the public service means that we will need to leverage analytic technology to enhance our work, auditing will always require the sound judgement, insight and expertise of skilled individuals.

The ANAO Workforce Plan 2022–25 outlines how we will attract, develop and retain a highly capable workforce to ensure we remain suitably skilled to deliver on our purpose to the Parliament. In 2024–25, we will continue to implement initiatives set out in the plan, before developing a revised plan.

The ANAO’s approach to workforce planning has always considered the ‘auditor of the future’. We know through strategic planning and assessment of our environment that future auditors will need to be curious, digitally proficient professionals with strong communication skills. The nature of our work means we need a diverse range of people — from different backgrounds, experiences and professions — to foster the leadership, problem-solving and decision-making required to deliver quality audits to the Parliament.

While competition in the recruitment environment requires us to cast our net wider for talent, our attention has turned further towards our capacity to ‘grow our own’ and support the professional development of our people. We are committed to investing in talented people — not just as auditors, but as leaders and exemplary public service professionals.

As such, we have established the ANAO Academy — an integrated, internal development program designed to uplift and refine both the technical and non-technical skills required of our people. The ANAO Academy enables our commitment to fostering a contemporary and continuous learning culture, beyond traditional forms of training and development.

Through our workforce plan, to support the capability of our workforce and people, the ANAO will:

• attract excellent candidates with broad skills and teach them how to become great auditors, strong leaders and exemplary public servants;
• develop the capability of our workforce to navigate the complexities of public sector administration and meet the demand of rapidly evolving technologies;
• focus on identifying opportunities and mechanisms to support retention across the organisation;
• deliver an integrated approach to learning and development — focused on training our people to remain at the forefront of technical capability, and embedding continuous learning within our work practices; and
• continue to uphold an organisational culture that is driven by our values — integrity, respect and excellence — and focused on providing a positive working experience for our people.

Public sector engagement

Supporting the public sector to understand who we are, what we do and what we find through our work is important and recognised in our purpose. As an organisation, we continue to consider how we can more purposefully engage with Australian Government entities — and public administration bodies — to drive accountability and transparency, while supporting the improvement of public sector performance.

Translating audit findings into whole-of-government insights and lessons learned assists to identify areas of improvement for consideration by entities. To support this engagement, the ANAO has developed a sector engagement strategy through which we seek to share our work in practical ways. The ANAO has established Insights – a suite of products which aim to contribute to improved public sector performance. The ANAO produces three types of Insights products:

• Audit Lessons – aims to communicate lessons from ANAO audits to make it easier for people working within the Australian public sector to apply those lessons.
• Audit Practice – explains the ANAO’s methodology to help entities understand the standards the Auditor-General applies to audit topics, and to assist entities to prepare for ANAO audits.
• Audit Opinion – provides the Auditor-General’s views on key issues facing the public sector.

During 2024-25 we will seek to work within the sector to share these products and our insights in a more active way. The ANAO is committed to building our capability to translate the technical nature of audit findings into helpful products for the public sector across the forward years.

APS Strategic Commissioning Framework

The ANAO has reviewed the requirements of the APS Strategic Commissioning Framework.

When considering decisions about resourcing, the ANAO takes into account the Auditor-General Act 1997 (the Act), which establishes specific powers that establish the independence of the Auditor-General. This includes provisions that enable the Auditor-General to maintain complete discretion in the performance or exercise of his or her functions (section 8); and to engage any person under contract to assist in the performance of any Auditor-General function (section 27).

The ANAO also takes a deliberate and considered approach to resourcing its functions. We recognise the benefits of purchasing the right skills, at the right time, to support the delivery of our work profile — specifically in an environment where the majority of Commonwealth entities’ financial and performance reporting is based on the year ending 30 June, with reports to be tabled in the Parliament by 31 October each year.

Audit work is the core work of the ANAO and resourcing to achieve quality is critical. To deliver its mandate, the ANAO uses a combination of in-house audit teams and private sector audit firms to undertake audit processes, with oversight and all signing responsibilities remaining with the Auditor-General. The ANAO carefully considers multiple factors when engaging contractors and resourcing through private sector firms including: the timely, cost-effective delivery of audit products; specialist or sectoral knowledge; and/or creating efficiencies where physical location makes it inefficient to perform the audit from Canberra.

The ANAO conducts audits requiring public sector specialist skills, including Departments of State, national security agencies, regulatory authorities, and bodies key to the functioning of the APS, in-house with ANAO staff. These audit teams are supplemented with contracted-in or specialist skills as required.

Resourcing of audit work is a matter for the Auditor-General under the Act. Signing of all audit work remains the responsibility of the ANAO. The resourcing model, using a combination of in-house and private sector skills, continues to serve the ANAO and the Parliament well in terms of quality, cost and timeliness. Increasing the ANAO’s in-house skills and capability remains a priority.

Productivity

The ANAO maintains an ongoing focus on enabling productivity improvements within our operations. We recognise that improved productivity is critical to demonstrating the efficient use of taxpayer funds in the delivery of our work to the Parliament and the public. Improving organisational processes and design will ensure the ANAO keeps pace in a contestable environment with reliable, adaptive and professional business practices.

We will seek to achieve productivity improvements by using resources strategically, streamlining our business practices and modernising our ways of working. The ANAO is continuing to improve audit outcomes by using a data-enabled approach that automates procedures and provides assurance and insights. The ANAO continues to refine automated processes, through data analytics and technology, to gain efficiencies while maintaining audit quality.

Auditing is a mobile profession and the ANAO is focused on enabling and maintaining a flexible, collaborative and modern ‘workplace’, physically and online — one that supports our people to feel connected to their work, each other, and our purpose. Our investments in technology, coupled with an increased focus on uplifting technical confidence, have empowered our workforce to work securely and remotely — anywhere, anytime.

The ANAO has developed a digital strategy aimed at aligning the objectives of our digital functions and providing a roadmap for future investment.

Over the next four years, to support improvements in productivity, the ANAO will:

• improve our connective technology to support increasingly flexible working patterns, stronger collaboration between staff, enhanced engagement with entities, and integration across systems and tools;
• grow our capacity through the use of fit-for-purpose technology and platforms, enabling our people to have the right tools to deliver quality outcomes; and
• continue investments in our data capability and use of technology, including:
  • utilising data analytics to support higher degrees of assurance, support better audit planning, and provide greater insights for the Parliament;
  • integrating effective and systematic use of standardised solutions to improve audit efficiency, drive innovation, enhance audit quality and ensure consistency in the use of data for audit outcomes;
  • increasing our understanding of the evolving automation and artificial intelligence landscape, across both the IT industry and the public sector (and its impact on our work and the work of entities);
  • supporting an organisational culture that embraces innovative solutions; and
  • building the technical proficiency of our people through learning and development.

Technology, data and information management

Advances in technology present opportunities and challenges to both public administration and our role as auditors. The ANAO is focused on keeping pace with advances in technology so we can respond to environmental changes, mitigate risks and deliver on our purpose. Our technology infrastructure enables the way we work, the outcomes we produce, how we connect to each other and how we engage the public sector.

As the interface between citizens, businesses and government continues to change with advancing technology, so too does the nature of raw data and data exchange. The ANAO recognises that as the breadth and complexity of public sector systems evolve, our approach to examining these environments must be supported by effective, fit-for-purpose solutions and tools.

Where government entities continue to pursue contemporary IT solutions to support the delivery of their work, the ANAO must continue to evolve the way in which we analyse, collect, manage and securely store data.

Over the next four years, we will make technology investments that:

• enable our people, primarily Canberra based, to operate effectively and flexibly, recognising our work can be performed and delivered in varied working environments and settings;
• support the delivery of our work, allow us to communicate effectively with entities, and increase the flexibility of our audit approach;
• leverage modern environments to enable a robust, flexible and cost-effective technology platform that can readily scale to support evolving needs;
• continue to leverage the full capability and potential of existing technology and systems within the ANAO to support business needs;
• support digital transformation and innovation across the organisation, enabling an environment that uses new tools to automate repetitive tasks, make information assets discoverable, and deliver high-quality, data-driven insights in a timely manner;
• ensure that the ANAO’s internal business processes reflect contemporary best practice, and support the efficient and effective management of the ANAO’s resources; and
• retain and build the skills capability required to effectively maintain and support our IT infrastructure.

The ANAO is also investing in its capability to securely hold the information it collects in carrying out its auditing functions. As a custodian of sensitive information, we will continue to enhance the ANAO’s security environment, with a focus on maintaining strong organisational cyber resilience and streamlining secure data governance, collection and classification methods.

Quality

The quality of ANAO audit work is reliant on the strength of its independence and quality management framework. A sound quality management framework supports high-quality audit work and enables the Auditor-General to have confidence in the opinions and conclusions in the reports prepared for the Parliament. This facilitates the Parliament’s confidence that the ANAO operates with independence, and that the audit approach meets the auditing standards set by the Auditor-General.

The ANAO framework is set out in the Quality Management Framework and Plan 2024–25 and is designed in accordance with the requirements of the Australian quality management standards issued by the Auditing and Assurance Standards Board, including ASQM 1 – Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements.

The quality management framework sets out the ANAO’s quality objectives and the key policies and procedures that respond to identified quality risks arising in the nature and circumstances of the ANAO’s work. The framework also outlines the activities and deliverables that we will undertake over the next 12 months to provide assurance that the quality management framework is operating effectively. An audit quality report against each year’s quality management plan is published annually in October.

The ANAO is subject to external review, through peer review arrangements with international colleagues, a voluntary arrangement with the Australian Securities and Investments Commission, and external audits by the Independent Auditor, appointed under section 41 of the Auditor-General Act 1997.

Over the next four years, the ANAO will continue its focus on implementing the quality management plan and further enhancing the quality management framework, with particular emphasis on:

• refining our processes for the evaluation of the quality management framework, including implementing lessons learned from our inaugural evaluation;
• strengthening our root-cause analysis program by identifying the key quality risks arising from thematic quality deficiencies to ensure remediation activities effectively address those risks;
• developing an ANAO sustainability assurance methodology for audits of Commonwealth entity climate disclosures; and
• expanding the conduct of internal special monitoring programs, including inspections of specific aspects of auditing across multiple audits to assess compliance with auditing standards and methodology.

Learning from peers

In pursuing its purpose, the ANAO maintains key relationships with various national and international counterparts within the audit profession. The ANAO invests in these relationships to support our ability to be a learning organisation, specifically through the two-way exchange and sharing of information and practices through peer-to-peer institutional capacity development.

For example, the Auditor-General is a member of the Australasian Council of Auditors-General (ACAG), which comprises the auditors-general of Australia, New Zealand, Papua New Guinea and Fiji, along with the auditors-general of each Australian state and territory. ACAG’s objective is to promote and strengthen public sector audit in Australasia through leadership, collaboration, engagement, advocacy and peer support.

Further, the ANAO engages with international auditing organisations and associations to maintain its capability in contemporary audit practices, and actively seeks opportunities to collaborate and share information with the international auditing community — including engagement with supreme audit institutions (SAIs). Engagement with other SAIs allows the ANAO to participate in international dialogue on best practice public administration and developments in public sector auditing.

The ANAO is a member of the International Organization of Supreme Audit Institutions (INTOSAI). INTOSAI operates as an umbrella organisation for the external public sector audit community and promotes development, the transfer of knowledge, improvement in government auditing worldwide, capacities enhancement, and the professional standing and influence of member SAIs in their respective countries. The ANAO routinely contributes to the activities of two INTOSAI regional organisations: the Pacific Association of Supreme Audit Institutions (PASAI), and the Asian Organization of Supreme Audit Institutions (ASOSAI).

The ANAO, through a partnership agreement with the Department of Foreign Affairs and Trade, is participating in Australia’s international development program to assist and support the audit offices of Indonesia and Papua New Guinea to build institutional capacity, and facilitate knowledge sharing across all three audit organisations. The partnerships support the Australian Government’s sectoral development initiative to build effective governance institutions and strengthen institutional relationships.

Over the next four years, the ANAO will continue to focus on strengthening and learning from these peer relationships by:

• contributing to ACAG’s work by attending business meetings and subcommittee meetings, preparing discussion papers, participating in information exchanges, contributing to submissions to standard-setting bodies, undertaking annual benchmarking and client surveys, and conducting peer reviews;
• participating in peer-to-peer forums that facilitate international public auditing dialogue and align with the strategic objectives and key focus areas set out in the ANAO’s strategic planning framework;
• considering the conduct of a peer review of the ANAO’s performance using the Supreme Audit Institution (SAI) Performance Management Framework that has been developed by INTOSAI;
• responding to requests from SAIs directly, including hosting and presenting to visiting delegations, providing information and participating in surveys; and
• continuing to participate in and support bilateral capacity-building partnerships with Indonesia and Papua New Guinea under Australia’s international development program.

The effective management of risk is integral to achieving our objectives and supporting our purpose over the life of this plan. The ANAO’s management of risk is embedded into business-as-usual practices — we use consistent language, approaches and documentation, and adopt both qualitative and quantitative risk analysis tools across all operations and groups.

Strategic risks are monitored monthly by the Executive Board of Management. Operational risk management occurs in line with the defined roles and responsibilities in the ANAO’s risk management framework. The framework is consistent with the Commonwealth Risk Management Policy and the international standards set out in ISO 31000 – Risk Management. The Auditor-General, taking into account the advice of the Executive Board of Management and the Audit Committee, establishes the ANAO’s appetite and tolerance for risk and oversees the framework.

The risk management framework identifies specific responsibilities for key personnel across the ANAO, and the enterprise risk register assigns owners and tolerances for identified enterprise-level risk. In addition, all ANAO staff have a general responsibility to practise active risk management — a responsibility that staff are prepared for through ongoing mandatory training.

Risk management within the ANAO is one of our core strengths, supported by multilevel and independent review across all major audits, procurements and projects. Risk is integrated into our governance structure through all of our committees, and the chair of each committee ensures that risks are sufficiently managed, analysed, captured and reported, and efficiently escalated as required to the Auditor-General.

The Executive Board of Management continually monitors the environment in which the ANAO operates, adjusting the ANAO’s risk profile as necessary. The ANAO’s ongoing approach to monitoring risk enables the board to implement mitigation plans and introduce additional controls to bring enterprise risks rated above our tolerance levels back to an acceptable level.

The Audit Committee, supported by our internal audit function, receives all internal audit reports and directs senior leaders to provide information as necessary, to enable the committee to assess whether risk is being managed proactively. The committee provides advice, assurance and reports directly to the Auditor-General.

The ANAO defines strategic risks as those that can arise due to factors outside the ANAO’s control. We have identified three strategic risks, which are managed in line with the risk management framework. The strategic risks are:

• the ANAO’s capacity for independent reporting is reduced;
• the Parliament questioning the ANAO’s ability to execute its mandate; and
• the ANAO is unable to deliver expected targets (in accordance with the Parliament’s expectations and the ANAO’s established performance measures).

The ANAO further recognises that the risk environment for Commonwealth entities is dynamic. As a result, the ANAO must continually monitor the risk to entities’ ability to provide accurate evidence for audits. Where appropriate, the ANAO may adjust audit plans to ensure that quality is maintained and auditing standards are not compromised. The ANAO maintains ongoing contact with contracted audit service providers to ensure consistent application of the auditing standards and the ANAO’s audit manual.

The ANAO has one purpose: to support accountability and transparency in the Australian Government sector through independent reporting to the Parliament, and thereby contribute to improved public sector performance.

Performance measurement informs the Parliament about how well the ANAO is delivering its purpose, and provides accountability to the Parliament. Our performance framework also helps the ANAO’s leadership and staff to understand the impact of their activities in delivering the ANAO’s purpose.

The ANAO’s performance measures provide information about what we expect to achieve in the next four years. We will report annually on our performance against the measures, and will review the measures each year to ensure they remain relevant and appropriate.

The performance measurement framework is based on measuring:

• what we did (output);
• how well we did it (quality and/or efficiency); and
• what the benefits were (effectiveness and impact).

Taken together, the performance measures tell a story of how well the ANAO is achieving its purpose. As the ANAO operates in a contestable environment, we are committed to demonstrating transparency in our operations.

The output measures relay progress in the delivery of the ANAO’s audit work. This audit work generates findings and recommendations for improvement that are directed at entities and tabled in the Parliament. The quality and efficiency measures are intended to demonstrate efficient use of taxpayer resources and a commitment to quality in our work. We use information from public audit offices in other jurisdictions to benchmark much of our performance. The effectiveness and impact measures provide information on entities’ responses to audit findings and implementation of recommendations, and the extent to which the Parliament’s engagement with our work leads to improvements in public sector administration.

The ANAO’s annual report contains our annual performance statements, which assess our performance against the performance measures and provide narrative and analysis.

The three programs (comprising three activities) and one area of shared activity that contribute to achieving our purpose are:

• financial statements audit services ;
• performance audit services ;
• performance statements audit services ; and
• relationships and corporate and professional services .

Measuring impact

The ANAO recognises that good performance information should provide insight into not only what we do, and the efficiency and quality of our work, but also its impact. We measure impact through a number of key measures.

For example, the ANAO provides entities with audit findings and recommendations based on observations during the conduct of audits. These findings and recommendations are aimed at assisting entities to improve their performance reporting, internal controls and business processes. The ANAO measures the percentage of findings and recommendations to which entities agree without qualification, as entities are more likely to fully address findings and implement recommendations that are agreed without qualification.

To measure the impact that the ANAO’s audit work has on public administration, the ANAO also measures the percentage of moderate or significant findings that are addressed by entities. By capturing the findings that are addressed by audited entities, we are able to understand the improvements that are being made within the public sector control environment as a result of our work.

The ANAO’s annual performance statements will also include a narrative on the impact of our audits on public administration by:

• including analysis of key improvements made by entities during an ANAO audit process, based on information included in tabled audit reports;
• reporting on the results of surveys of audited entities; and
• reporting on the JCPAA’s level of satisfaction that the ANAO is providing support to the committee through briefings, submissions, appearances and other mechanisms as requested.

The ANAO’s annual performance statements are audited by an independent auditor, at the request of the Auditor-General.

Program 1.1 – Financial statements audit services

The ANAO audits the annual financial statements of all Commonwealth entities and the consolidated financial statements of the Australian Government. The consolidated financial statements present the consolidated whole-of-government financial result inclusive of all Australian Government–controlled entities, including entities outside the general government sector. These audits are designed to give assurance to the Parliament that each entity’s and the whole-of-government financial statements fairly represent their financial operations and positions at year end. Insights and findings from the financial statements audit services program are tabled in the Parliament twice a year, generally in May and December.

The ANAO also undertakes a range of assurance reviews by arrangement with entities, and in accordance with section 20 of the Auditor-General Act 1997.

The performance measures and targets for financial statements audit services from 2024–25 to 2027–28 are shown below.

Program 1.2 – Performance audit services

Performance audit services improve public sector performance by providing performance and other audit reports for the information of the Parliament, the executive government and the public. The ANAO’s performance audit activities involve the audit of all or part of an entity’s operations to assess its economy, efficiency, effectiveness, ethics, and legislative and policy compliance. The ANAO identifies areas for improvement in aspects of public administration, and makes specific recommendations to assist public sector entities to improve their program management. Entities indicate their agreement to implement ANAO recommendations in the audit report, which is tabled in the Parliament. In this way, entities inform the Parliament of improvements they intend to make as a result of ANAO audits.

Performance audits are the major factor driving the number of ANAO briefings and submissions to, and appearances before, parliamentary committees.

The performance measures and targets for performance audit services from 2024–25 to 2027–28 are shown below.

Program 1.3 – Performance statements audit services

Performance statements audits are designed to give assurance to the Parliament that an entity’s annual performance statements have been prepared, in all material respects, in accordance with the requirements of Division 3 of Part 2-3 of the Public Governance, Performance and Accountability Act 2013.

While the ANAO continues to roll out the staged implementation of performance statements audits across the public sector, the Commonwealth Performance Framework does not currently require audited entities to include the performance statements audit conclusion in its annual report (as is the case for financial statements audit opinions). The ANAO continues to provide the Auditor-General’s independent assurance reports on entities’ annual performance statements to the Minster for Finance for tabling in the Parliament.

The ANAO also tables an end-of-year report reflecting on the outcome of the performance statements audit program for the financial year. The purpose of this report is to provide the Parliament with an independent view on the progress in improving non-financial reporting across the Australian Government.

The performance measures and targets for performance statements audit services from 2024–25 to 2027–28 are shown below.

Shared activity – Relationships and corporate and professional services

We publish lessons from performance audit activities four times a year. The aim of the Insights: Audit Lessons series is to communicate lessons from our audit work and to make it easier for people working in the Australian public sector to apply those lessons.

The performance measures and targets for relationships and corporate and professional services from 2024–25 to 2027–28 are shown below.