Purpose

1.1 The Integrity Framework provides an overarching structure to the ANAO integrity control system, supporting our institution’s integrity. The framework serves to assist in ethical decision making and risk, fraud and misconduct management.

1.2 The ANAO is an integrity institution and maintaining credibility and independence is essential in exercising the Auditor-General’s powers and delivering against the mandate of the Auditor-General Act 1997. To demonstrate these qualities, the ANAO regards integrity as a core value of the organisation — critical in sustaining the confidence of Parliament, strengthening public trust in government and delivering quality audit products. It is critical to the operations and reputation of the ANAO that the organisation maintains strong institutional integrity.

ANAO values and culture

1.3 The ANAO upholds the Australian Public Service (APS) Values as set out in the Public Service Act 1999. In addition to the APS Values, the ANAO places particular focus on respect, integrity and excellence. The ANAO values guide the office in performing its role objectively, with impartiality and in a manner that supports the Parliament.

1.4 Beyond its control system, the ANAO maintains an enduring focus on promoting integrity as a value that is embedded in our work and culture. The ANAO recognises that integrity demands quality not only in our products but also in the behaviours of our people. The APS Values and ANAO values reflect our unique role and purpose, relationship to the Parliament and our operating environment. Our values underpin our approach to culture, performance outcomes and businesses processes. They define the behaviours we expect of our people in representing our organisation.

Definition of integrity

1.5 The ANAO defines integrity as the practice of demonstrating honesty and uncompromising adherence to strong ethical principles.

1.6 We expect our people to demonstrate integrity in their behaviours – as auditors, public servants, officials and professionals. The ANAO Integrity Statement outlines the five key principles of integrity - independence, honesty, openness, accountability and courage, and expected behaviours of staff at the ANAO. In the ANAO, integrity means more than simply complying with requirements, it means acting to achieve the intent and spirit of the requirements.

The ANAO Integrity Statement

Overview of the framework

1.7 The Integrity Framework identifies the legislation, policies, processes, practices and reporting mechanisms that promote proactive integrity management. The ANAO Integrity Framework has been specifically designed to assist in improving governance practices and ethical decision making; and supporting risk, fraud and misconduct management.

1.8 The application of the Framework supports the ANAO to have an organisational culture focused on integrity. Our Integrity Framework supports the ANAO’s transparency, accountability and credibility by:

• integrating processes and controls within the framework;
• connecting ANAO policies, frameworks and guidelines that influence integrity across the organisation; and
• promoting the responsibilities and behaviours expected within the ANAO’s value-driven organisational culture.

1.9 The Australian Public Service Commission (APSC) states that integrity in the APS is a multi-layered concept that is shaped by frameworks, policies, assurance mechanisms, its employees and broader organisational culture.¹

Source: Australian Public Service Commission Integrity (apsc.gov.au)

ANAO Integrity Framework

ANAO Integrity Advisor

1.10 To support the Integrity Framework the ANAO has an appointed Integrity Advisor. The Integrity Advisor is responsible for matters associated with integrity. The role of the Integrity Advisor includes responsibilities to:

• increase integrity awareness across the organisation;
• support the effective, ongoing application of the Integrity Framework; and
• report annually to the ANAO Executive Board of Management (EBOM) on actions taken under the framework.

1.11 The Integrity Advisor is a point of contact for staff who are seeking advice and support on the application of the Integrity Framework. The Integrity Advisor is not responsible for determining if a matter is an integrity breach, or for making decisions about matters raised. Staff members seeking advice from the Integrity Advisor remain responsible for applying ANAO policies in the Framework and acting on the advice provided.

1.12 Enquiries and matters raised with the Integrity Advisor during 2022–23 are set out in Chapter 3 of this report.

ANAO Public Interest Disclosure (PID) officers

1.13 PID officers maintain key responsibilities under the Public Interest Disclosure Act 2013 (PID Act) and Public Interest Disclosure (PID) Scheme, to promote integrity within the public service by supporting the effective functioning of public authorities and facilitating confidence in public institutions.

1.14 ANAO PID officers support the Integrity Framework by demonstrating best practice, adherence to the legislation and ethical leadership. They also support the responsibilities of the Integrity Advisor.

1.15 The ANAO PID officers also have mandatory referral obligations under the National Anti-Corruption Commission Act 2022 (NACC Act). A PID authorised officer must refer corruption issues they become aware of in the course of performing their functions under the PID Act, if they suspect the issue could involve corrupt conduct that is serious or systemic.

IntoSAINT methodology

2.1 The International Organisation of Supreme Audit Institutions (INTOSAI) developed a Self-Assessment of Integrity (IntoSAINT). The self-assessment tool allows supreme audit institutions (SAIs) and public sector organisations to identify and evaluate their institutional vulnerability and the resilience and maturity of their Integrity Control System against possible integrity violations. The ANAO conducted an IntoSAINT self-assessment in March 2019. The IntoSAINT methodology assesses the SAI’s:

• inherent vulnerability to integrity violations;
• vulnerability enhancing factors that enhance the inherent vulnerabilities of an organisation to integrity violations; and
• the maturity of the integrity control system.

2.2 One of the key principles of the IntoSAINT assessment is to target prevention by identifying integrity weaknesses and risks to strengthen the organisation’s resilience. Vulnerability enhancing factors may provide opportunity, motivation and/or rationalisation for breaches of integrity. These factors do not imply that breaches are taking place but indicates areas where an organisation is more vulnerable or at risk.

2.3 The 2019 IntoSAINT ANAO assessment results for vulnerability enhancing factors identified that the ANAO’s highest vulnerability enhancing factors were elevated workloads and the need for external expertise and outsourcing arrangements. The IntoSAINT assessment identified that:

• Elevated workloads may lead to a loss of thinking time and ability to be strategic or consider efficiency. Elevated workloads may also limit time to dedicate to staff/performance management. Inconsistent workloads can create resentment. The 2019 assessment included risks regarding the depth of staff performance management skills across the ANAO, particularly where technical experts are promoted into management roles. In combination with elevated workloads this exposes the ANAO to risks and may impact how well performance management issues are dealt with.
• The need for external expertise may impact integrity due to the perception regarding the rationale for the choice to use outsiders, rather than drawing on in-house expertise or investing in building in-house expertise.
• Outsourcing arrangements primarily related to the resourcing model in financial statements audit but was also linked to concerns with high staff turnover and that replacement staff often have less experience and audit expertise.

2022–23 vulnerability assessment

2.4 An IntoSAINT self-assessment involves moderation from a certified moderator from another SAI. In 2019, a certified moderator from the New Zealand Office of the Auditor-General (NZ OAG) led the ANAO self-assessment. COVID-19 interrupted the roll-out of IntoSAINT throughout the Pacific region to be led by NZ OAG. Once this roll-out is completed, the ANAO intends to work with our international peers to coordinate a second IntoSAINT assessment.

2.5 The ANAO uses available information to assess if the vulnerabilities identified in the 2019 IntoSAINT assessment continue to be present or if there are other emerging vulnerabilities and risks that need to be considered in the resilience of the Integrity Framework. This assessment is set out in Chapter 3 of this report.

Human resources (HR) matters

Formal matters

3.1 In 2022–23 there were no code of conduct investigations (2021–22: nil).

Bullying and harassment

3.2 The Corporate Management Group (CMG) People Team did not receive any formal reports of bullying and harassment in 2022–23. The People Team did provide advice to staff on personnel issues between employees and these matters were resolved without requiring escalation to a formal resolution and reporting process.

3.3 Diversity Contact Officers (DCOs) are available to provide ANAO staff with confidential support and advice on workplace issues. DCOs are ANAO officers who provide this advice and support in addition to their normal jobs. The ANAO Diversity Contact Officer network had four contact points that related to integrity. Two instances involved the behaviour and treatment of a staff member that was perceived as biased and not in line with expected ANAO behaviours. The third instance concerned a one-off occurrence regarding behaviour. The fourth instance was also consistent with a matter raised with the Integrity Advisor, refer to paragraph 3.26. In all cases the DCOs provided advice on options available to resolve the matters and support that could be accessed.

3.4 The DCO Committee meets at least every two months and comprises up to eight DCOs and one human resources representative. The DCO Committee is a sub-committee of the People and Change Committee (P&CC) that informs that ANAO’s people related priorities and initiatives. The DCO committee reports quarterly to the P&CC including a deidentified incident report, and where relevant includes emerging issues and risks. The DCO also host events for all staff including a session for “Stress Down Day” where a panel of ANAO staff discussed managing stress and how staff can support themselves and colleagues.

3.5 The ANAO is committed to fostering a safe and healthy workplace. The ANAO Employee Assistance Program (EAP) helps us to support the health and wellbeing of our employees. The EAP is a free and confidential short-term coaching and support service available to ANAO staff and is accessible 24 hours and day, seven days a week. During 2022–23 the ANAO’s EAP provider ran a series of in-person on-site consultation sessions that were available to all staff to book or ‘walk-up’. A total of 14 sessions were delivered at multiple times during the year. The ANAO EAP provider also ran several training sessions during 2022–23 on topics such as 'thriving under pressure'.

Discrimination

3.6 The Corporate Management Group (CMG) People Team did not receive any formal reports of discrimination.

3.7 The APS Census results related to bullying, harassment and discrimination are assessed at paragraph 3.38.

Disclosures under the Public Interest Disclosure Scheme

3.8 There were no disclosures made under the Public Interest Disclosure (PID) Scheme to the ANAO authorised officers in 2022–23. The ANAO reviewed its PID procedures in 2022–23 in light of the Office of the Commonwealth Ombudsman refresh of instructional material. These changes mostly reflect amendments to PID arrangements arising from the standing up of the National Anti-Corruption Commission (NACC).

Fraud

3.9 There were no incidents of fraud identified in the ANAO in 2022–23 (2021–22: nil).

Misuse of credit cards

3.10 There were 10 instances of misuse of ANAO corporate credit cards in 2022–23. This represents less than 0.1 per cent of total credit card transactions (2021–22: 11 instances at 0.1 per cent of total credit card transactions). There was a decrease in instances compared to previous years.

3.11 Although the proportion of misuse is small, each instance is investigated, with all incidents found to be inadvertent. All instances of credit card misuse were reported to the Executive Board of Management. The Chief Finance Officer contacted those staff who misused their credit card, reminded them of their obligations when using the card, and ensured that the amounts associated with the misuse of the credit cards were repaid into the ANAO’s bank account.

Completion of mandatory learning and development

3.12 ANAO staff are required to complete mandatory e-learning courses on commencement at the ANAO and on an annual basis including:

• Values and Code of Conduct;
• Work Health and Safety;
• Protective Security;
• Respect and Diversity;
• Risk Management and Fraud Control; and
• Performance Management.

3.13 New starters are additionally required to complete:

• ANAO Induction;
• Records Management;
• E-Hive Introduction; and
• APS Induction – Integrity in the Australian Public Service.

3.14 A summary of the completion of mandatory e-learning courses as at 30 June 2023 is below.

Staff completion of mandatory e-learning courses

3.15 There has been a slight decline in staff completion rates across most groups within the ANAO in 2022–23 compared to the previous year.

3.16 The ANAO ensures that staff are aware of their responsibility to complete mandatory training by:

• providing new starters with information regarding the e-learning courses in onboarding emails and in automated notifications in the ANAO Learning Management System (LMS); and
• sending several automated reminders to all staff in the month prior to deadline for annual refresher training.

3.17 Group heads can monitor mandatory training completion data on the Human Resources Dashboard. Practice management units also have access to Learning Management System (LMS) reporting.

Personal interest disclosures

3.18 The Auditor-General, all SES officers and employees who, in the Auditor-General’s opinion, may have similar decision-making responsibilities are required to submit at least annually, a written declaration of their and their immediate family’s financial and other interests that could involve a real or apparent conflict of interest. SES and other key personnel completed declarations in September 2022 and no potential conflicts were declared that required management. All declarations are reviewed by the Deputy Auditor-General and escalated to the Auditor-General if required. The requirement for SES and other relevant employees to complete and submit a declaration of interest is governed by section 13 of the Public Service Act 1999.

3.19 In addition to the declaration of personal interests, the ANAO has independence policies requiring that all audit staff complete independence declarations. Under the ANAO Audit Manual the Auditor-General, Deputy Auditor-General, ANAO audit staff and in-house audit contractors are required to complete a declaration of independence prior to participating in an audit, review, other assurance engagement or information report. Any actual, perceived or potential threats to independence are declared to the responsible engagement executive for evaluation. Safeguards are put in place to reduce any threats to an acceptable level. These safeguards can include removing members from an audit team or excluding them from specific aspects of audit work where the threat arises, and additional levels of review to ensure that judgements made are appropriate.

3.20 In 2022–23 the Auditor-General declared a potential threat to his independence in one performance audit. To safeguard against this threat, he removed himself from the audit review process and the Deputy Auditor-General approved and tabled the report.

Gifts and benefits

3.21 The ANAO must meet public expectations of integrity, accountability, independence, transparency and professionalism. This can only happen if staff are not influenced, or perceived to be influenced, by gifts, benefits, or bribes. The Auditor-General’s Instructions and Financial Management Procedures set a clear guiding principle for ANAO officials to avoid the acceptance of gifts, benefits or hospitality and decline at the time of offer. In some instances, staff may accept gifts such as when the ANAO receives cultural gifts from international delegations. ANAO staff must report any offered gift or benefit, whether accepted or refused, within 10 business days of the offer being made via the gifts and benefits register. Permission to retain any gift or benefit requires permission of the Deputy Auditor-General or the Group Executive Director of CMG.

3.22 The gifts and benefits register is published on the ANAO website on a monthly basis for transparency and accountability. In 2022–23 a total of 86 retained gifts was reported, including:

• 70 gifts and souvenirs from peer audit office staff during international conferences, peer reviews and capacity building activities that the ANAO undertakes with the Audit Board of the Republic of Indonesia (BPK) and the Papua New Guinea Audit Office. These gifts were accepted as cultural gifts or were gifts provided to all attendees at conferences;
• items that provided benefits to the ANAO such as airline lounge memberships and professional development and networking opportunities; and
• low value unsolicited gifts.

3.23 The register reports a total of 12 declined gifts, which included invitations to events and forums, professional development offered and other gifts.

Outside employment or activities

3.24 The ANAO provides its employees with flexibility to participate in activities outside the Australian Public Service if the activities do not conflict with or adversely affect the performance of their official duties. A range of activities may be deemed to be in the public interest and of professional benefit to the individual and to the ANAO. Outside employment (paid or unpaid) or volunteer activities are undertaken by an employee in addition to their official duties or while on paid or unpaid leave from the ANAO.

3.25 Prior approval is required for all outside activities and employment, unless specifically excluded from the policy. The Deputy Auditor-General is the delegate for approving outside employment or activities. At 30 June 2023, the ANAO had 19 approvals recorded for staff undertaking outside employment activities.

Queries to the Integrity Advisor

3.26 During 2022–23 the Integrity Advisor was approached by two staff members with queries and requests for advice.

• One staff member discussed instances when leave requests were being denied due to business needs and requested advice on what steps to take to resolve the matter. The Integrity Advisor provided advice to discuss with their engagement executive.
• One staff member raised concerns with advice provided to them by their immediate supervisor, engagement executive and the CMG People Team. The Integrity Advisor consulted with the CMG People Team to understand the rationale behind the advice. The Integrity Advisor then advised the staff member that it was appropriate to follow the original advice provided as it was in line with ANAO policies and supported by reasonable rationale and judgements.
• A further question was raised by the staff member regarding compliance with ANAO audit manual policies related to independence. The Integrity Advisor provided advice by clarifying the independence policy requirements to the staff member. The Professional Services and Relationships Group (PSRG) is responsible for the maintenance of the policies. PSRG provides regular reminders to all audit staff regarding independence policies in technical update training sessions. Compliance with independence declarations is monitored in the ANAO quality assurance review program and an annual internal audit on compliance with ANAO audit policies.

Protective security and confidentiality

3.27 Under the Protective Security Policy Framework, for 2022–23, the ANAO achieved a self-assessed Maturity Level Three, defined as fully implemented and effective and is integrated, as applicable, into business practices.

3.28 In addition to advice provided to staff members, the Integrity Advisor also provided advice to the Chief Operating Officer (COO) on one matter that arose during the year. In October 2022 a media article was published regarding ANAO workloads which referred to ‘tip-offs’. The COO, as the ANAO Chief Security Officer, was concerned that the reference to ‘tip-offs’ indicated that ANAO staff were operating outside of the ANAO social media policy. The Integrity Advisor reviewed the contents of the article and concluded that the article only contained information that was published on the ANAO website, including the ANAO Quality Report and the 2021 APS Census results. There was no indication that any other source was used by the journalist or that ANAO staff provided information to contribute to the article.

Procurement

3.29 In 2022–23 the ANAO did not receive any complaints regarding ANAO procurement processes (nil complaints since the implementation of the procurement complaints mailbox in February 2022). The procurement complaints mailbox is a mechanism for suppliers and/or potential suppliers to lodge a formal complaint if they believe the ANAO has breached or will breach Commonwealth Procurement Rules and this has affected or will affect their interests.

3.30 There were eight instances where procurements made by the ANAO were registered on AusTender after 42 days. The ANAO has internal controls to mitigate the likelihood of procurements not being reported on AusTender within the mandated timeframe. All instances of reporting outside the mandated timeframe are reported to the Executive Board of Management (EBOM).

Awards and recognition

3.31 The ANAO awards system recognises and rewards people that are making a significant contribution to its objectives. This system includes formal ANAO awards such as the Auditor-General’s Australia Day Awards and the Auditor-General’s Outstanding Achievement Awards. In 2022–23 award recipients included ANAO staff who demonstrated a commitment to ANAO integrity principles and professionalism with a focus on coaching and mentoring, maintaining a positive inclusive culture, demonstrating a willingness to support colleagues and recognising the contributions of others.

2022–23 integrity vulnerability assessment

3.32 This report captures available information to assess if the vulnerabilities identified in the 2019 IntoSAINT assessment continue to be present or if there are other emerging vulnerabilities and risks that need to be considered in the resilience of the Integrity Framework. This includes an assessment of the environment and the 2023 ANAO APS Census results.

Environment

3.33 In 2022–23 matters of integrity and ethics have come to the fore in discussions of public sector performance, notably with the release of the report of the Royal Commission into the Robodebt Scheme and the establishment of the National Anti-Corruption Commission (NACC). The Integrity Advisor was requested to review the report of the Royal Commission into the Robodebt Scheme to assess if the recommendations made in the report could highlight any opportunities where the ANAO can further strengthen our Integrity Framework.

3.34 The following points were considered:

• The absence of documentation of decisions and lack of clear record-keeping meant the Royal Commission had to piece information together to understand how decisions were made. This is relevant to all APS entities and is an area where the ANAO regularly raises findings in our audits. Record-keeping and documentation of significant judgements is also an area that we have identified as an opportunity for improvement in our internal quality assurance review over audits. A recommendation was made for the Australian Public Service Commission to develop standards for documenting important decisions and discussions and the delivery of training on those standards. The ANAO undertakes audits in accordance with the ANAO Auditing Standards. The Auditing Standards set out documentation requirements for all audits. The ANAO Audit Manual also includes policies related to audit documentation. The ANAO also undertakes regular technical update training sessions including reminders on documentation standard requirements.
• A recommendation related to regular training on the core duties and responsibilities, including an emphasis on the duty to avoid any compromise to integrity and professional independence, is relevant to the ANAO. Auditor independence is critical to making objective conclusions in our audits. Integrity and independence are covered in annual mandatory e-learning courses and in regular technical update training to auditors. In 2022–23 the ANAO introduced an Integrity Awareness Week which included presentations on integrity to ANAO staff on the integrity framework and principles.

Australian Public Service (APS) Employee Census 2023

3.35 The APS Employee Census is an annual survey which is used to collect confidential attitude and opinion information from APS employees on issues in the workplace. It is an opportunity for APS employees to share their experiences of working in the APS. The APS Census results provide insight into employees’ views about the APS, their agency and their workplace. The Integrity Advisor identified questions from the 2023 ANAO APS Census results² that related to integrity and vulnerability enhancing factors identified in the IntoSAINT methodology.

Note 1 – The APS Census included responses from 329 ANAO staff (89% response rate). The number of staff included in brackets in the tables is an estimated number and was calculated from the percentage results from the overall ANAO responses. Rounding may impact the accuracy of these numbers.

3.36 In the 2019 IntoSAINT report the need for external expertise and outsourcing primarily related to the engagement of experts in audits, the contracting out of selected audits to industry specialists and the purchase of financial statements audit methodology. The potential impact on integrity is the perception of choosing outsiders rather than investing in building in-house expertise. The need for external expertise and outsourcing was also linked to staff turnover, with replacement staff often having less audit experience and expertise. The ANAO Workforce Plan 2022–25 includes an introduction from the Auditor-General setting out that the ANAO is “committed to investing in our people, supporting their development as leading audit and public service professionals”. While the ANAO faces challenges in needing to grow the size of the audit function in a tight labour market, the ANAO has a comprehensive implementation plan to ensure that we attract, develop and retain a high-performing workforce.

3.37 The ANAO’s 2019 IntoSAINT assessment report linked elevated workloads to a risk to effective performance management. In the 2023 APS Census the responses to questions related to ‘leadership - immediate supervisor’ were largely positive with all questions responded to with at least 81% positive rating. The response to ‘my supervisor provides me with helpful feedback to improve my performance’ increased one point from prior year to 82% and is five points above the APS overall percentage. This response suggests that despite consistent reporting of elevated workloads, performance management has not been compromised.

3.38 The following APS Census results relate directly to integrity matters.

3.39 The 2022–23 APS Census responses to the questions related to bullying, harassment and discrimination show that instances of unacceptable behaviour have slightly decreased. There has been an increase in the percentage of discrimination reported in the survey occurring in the ANAO (current agency) as opposed to a previous agency, but a decrease in actual instances. The basis of discrimination changed from the prior year with race now being the highest response.

3.40 In 2023 more staff reported bullying, harassment and discrimination compared to previous years. The ANAO CMG People Team did not receive any formal HR reports of bullying, harassment or discrimination, suggesting that these matters were resolved through reporting to supervisors or the Diversity Contact Officers and through informal advice from the People Team without requiring escalation to formal reporting. There were instances of reports to the ANAO Diversity Contact Officers, who advised that the matters were dealt with by escalating to senior leaders. The instances of bullying, harassment and discrimination which are not reported dropped significantly but remains higher than preferred.

3.41 The following questions relate to employee engagement.

3.42 The overall ANAO employee engagement index score increased by one point from the prior year. The results demonstrate that ANAO staff have strong values and commitment to the purpose, objective and goals of the ANAO.

Governance and committees

3.43 The ANAO’s governance framework supports the organisation to uphold public sector principles and values, including legislative requirements for accountability, leadership, transparency, integrity, efficiency and risk management. The framework ensures that our operations remain compliant with relevant laws, standards and directions. This supports effective management of the organisation to achieve its purpose and meet public and community expectations of probity, accountability and transparency.

3.44 The EBOM is the ANAO’s peak committee. EBOM is supported by six subcommittees and three operational committees. In 2022–23 there were no issues raised regarding integrity through the sub-committees to EBOM. An area of risk that was raised with EBOM was concerns about the willingness of staff to learn lessons from quality assurance reviews. In 2022–23 the ANAO identified quality deficiencies through internal quality assurance reviews. These reviews provide opportunities to identify areas for improvement and foster continuous improvement in our audit policies, methodology and practices. Instances where audit teams push back on quality assurance findings give rise to concerns about openness to scrutiny and acceptance of accountability. The ANAO acknowledges that this is an area of challenge to ensure that we support and maintain a culture of quality and integrity.

Maturity assessment of the ANAO Integrity Framework

3.45 In 2022–23 the ANAO continued to focus on maturing the processes and controls that make up the ANAO Integrity Framework. As an Integrity Agency within the Australian Public Service, the ANAO has a strong pro-integrity culture. Pro-integrity involves the embedding of integrity into an agency’s culture, where it is a core consideration of all it does—from the conduct of its individual employees, to its systems and practices. In a pro-integrity culture the primary motivating factor in the day-to-day conduct of APS employees is driven by a genuine commitment to upholding and championing integrity as a core component of a professional public service.³

3.46 In the ANAO the Auditor-General sets the tone from the top regarding integrity. In 2022–23 the Auditor-General has maintained a strong focus on integrity in communications with all staff through ANAO Town Hall meetings as well as in published ANAO documents including the ANAO Annual Report and Corporate Plan. The ANAO has increased its focus on integrity through the development of an audit methodology for assessing ethics and making findings in audit reports where entities have not met ethical requirements.

3.47 Upholding the ethical values of the public sector requires compliance with all relevant laws and acting in a way that is right and proper as well as technically and legally correct. The Auditor-General sends this message not only to the sector and entities that we audit, but also internally. As an integrity agency, the Auditor-General sets a clear expectation that ANAO staff must hold themselves to a high standard of integrity and uphold ethical values.

3.48 The APSC sets out that a culture of integrity requires a strong values-driven mindset at every level, exemplified by leaders, as well as systems and frameworks that enable and encourage individuals to do the right thing. The ‘building blocks’ for this pro-integrity culture are awareness, capability and accountability:

• awareness of the obligations for working professionally and the role and responsibilities of agencies to support APS employees to understand and navigate challenges to ethical decision-making;
• capability of APS employees to identify and work through ethical challenges, ensuring they have or can develop the skills to address these integrity concerns; and
• accountability for decisions and actions at every level, and systems for addressing concerns about employees’ integrity or conduct appropriately and consistently.

2022–23 Integrity awareness, capability and accountability activities

3.49 In June 2023 the ANAO launched Integrity Awareness Week, an annual event to focus on how we make integrity integral to our daily work. During the week three all-staff sessions were delivered: one presentation on the Integrity Framework, one covering the support provided to staff by the ANAO Integrity Advisor; and a presentation on the establishment of the National Anti-Corruption Commission delivered by staff from the Attorney-General’s Department and the Australian Commission for Law Enforcement Integrity (ACLEI) (subsumed into the NACC from 1 July 2023). Each day in Integrity Awareness Week a video was released featuring ANAO senior executives sharing what integrity means to them. This week supported awareness and capability of ANAO employees about the role they play in the ANAO Integrity Framework.

3.50 In addition to the integrity sessions presented in Integrity Awareness Week, the ANAO Integrity Advisor delivers integrity training sessions to graduates and new starters as part of the induction processes. These sessions promote awareness of the Integrity Framework and principles that the ANAO upholds. In these sessions participants explore scenarios where integrity challenges may arise in our daily work, building capability on how to address integrity concerns.

3.51 In November 2022, the ANAO’s LearnFest was held. LearnFest aims to improve organisational culture, develop staff and leadership capability, and support wellbeing and diversity. LearnFest 2022 featured events over five days with key themes focussed on wellbeing, leadership and ethics. LearnFest featured a presentation by the Integrity Commissioner (ACLEI) as well as an Integrity Workshop and a panel discussion on the ANAO ethics audit methodology.

3.52 Accountability for decisions and actions taken is built into the ANAO’s governance and reporting structures as well as the performance management processes. Integrity has been incorporated into the ANAO capability framework and upholding the APS and ANAO values is built into our performance agreements and evaluations. The ANAO performance cycle process includes and end of cycle evaluation and performance rating. All ratings are reviewed and moderated by the Moderation and Remuneration Committee where demonstration of integrity is a key consideration for the ratings assigned to all staff.

Status of actions under the Annual Integrity Strategy for 2022–23

3.53 The 2021–22 Integrity Report set out the Integrity Strategy for 2022–23. This strategy included actions to fulfil the Integrity Advisor role to support the effective and ongoing application of the Integrity Framework and increase integrity awareness across the ANAO. The status of these actions as at 30 June 2023 was:

Additional actions and changes to the Integrity Framework in 2022–23

3.54 In 2022–23 the ANAO was involved in Integrity Maturity Model workshops led by ACLEI in the development of the Commonwealth Integrity Maturity Framework, now published on the NACC website as a resource for Commonwealth entities to design, implement and review the effectiveness of their integrity frameworks. The ANAO shared insights from the IntoSAINT methodology, in particular the workshop format of the self-assessment that gathers views from a cross-section of staff with varied experience and tenure at the organisation.

3.55 In 2022–23 the New Zealand Office of the Auditor-General presented a webinar series on building strong national integrity systems in the Pacific region. The Integrity Advisor attended the webinars to keep abreast of how our peer audit offices in the region are strengthening integrity systems and the issues that they face in their organisations.

3.56 The ANAO is an organisation focused on continuous improvement. In our performance audits we raise recommendations for auditees to improve processes. For each performance audit recommendation we perform a review of our processes and practices to ensure that we have the processes and practices in place in line with our recommendations. In 2022–23 the ANAO made the following incremental improvements to the policies, procedures and processes that make up the ANAO Integrity Framework:

• In October 2022 EBOM considered a report on the management of ANAO procurement and contract activities. The ANAO approach is to use competition – a cornerstone of the Commonwealth Procurement Rules – to assist in demonstrating value for money. Any exception to an open approach, for example a limited tender, needs to be approved by the relevant Group Executive Director.
• In high cost, high risk and/or complex procurements, the ANAO engaged independent legal and probity expertise. Early engagement with these experts in the procurement process ensured that we were adhering to rules and frameworks and supported the staff involved by increasing their capability and understanding of processes.

3.57 In the 2019 IntoSAINT self-assessment, the overall ANAO Integrity Control system was rated as medium, with controls rated as high in:

• the ANAO legal framework, legislation and regulations;
• security;
• recruitment and selection;
• professional standards; and
• the Auditor-General and EBOM’s attitude.

3.58 All remaining controls were rated as medium.

3.59 In the 2019 IntoSAINT report made nine recommendations including developing an overarching integrity framework, appointing an integrity advisor, and increasing integrity awareness through training and communication. At the start of 2022–23 there was one outstanding recommendation related to enabling staff to spend the time needed to address integrity, capability and development issues. As at 30 June 2022, this recommendation was partially addressed as the newly established Performance Statements Audit Services Group (PSASG) did not have an established process to allocate time for performance management, training and non-audit activities. The PSASG 2022–23 resourcing model identified time for mentoring and support as well as non-audit activities. All IntoSAINT assessment recommendations have now been addressed.

3.60 The ANAO is satisfied that the maturity of the Integrity Framework is appropriate for the vulnerabilities identified in this report. The ANAO will continue to mature our Integrity Framework and make incremental improvements to our controls in a risk-based approach. Chapter 4 sets out the strategies and plan for 2023–24.

4.1 As set out in the ANAO Corporate Plan 2023–24 integrity and ethics continues to be a key focus area for our audits, in particular looking at the ethical aspects of proper use and management of public resources, including entity governance and ethical frameworks.

4.2 Increased public interest in the ethics and integrity of government decision-making has seen a shift in the profession towards developing audit frameworks to highlight the fundamental requirements of good governance and public sector performance. 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.

4.3 The ANAO will continue to build a positive working relationship with the National Anti-Corruption Commission (NACC), which commenced operations on 1 July 2023 under the National Anti-Corruption Commission Act 2022. The ANAO recognises the importance of strengthening the Commonwealth’s integrity agenda and assuring the operation and function of independent bodies.

4.4 The Commonwealth Fraud Control Framework is being expanded to corruption as well as fraud, requiring Commonwealth entities to take steps to prevent, detect and respond to corrupt conduct. These amendments complement the function of the NACC and are part of the suite of reforms to improve the standards of integrity across the public sector. The updated framework takes effect on 1 July 2024. Once finalised, the ANAO will implement the new fraud and corruption framework by updating internal fraud control policies, processes and procedures.

4.5 The ANAO will continue to focus on the maturity of the Integrity Framework. This will include creating an integrity risk register that will assess the integrity vulnerabilities and risks and identify the controls that address those risks. This will ensure that our Integrity Framework is appropriately risk focused.

4.6 In addition to the ongoing support and advisory role of the Integrity Advisor, the following table sets out the Integrity strategy and plan for 2023–24.

4.7 The Integrity Advisor will report on the status of these actions to EBOM on a six-monthly basis in line with ANAO business plan reporting.

5.1 The ANAO is satisfied that the matters noted in this report do not represent systemic or structural issues in the organisation.

5.2 While the ANAO faces challenges, risks and integrity vulnerabilities, it is positive that the risk to integrity has not been realised. The ANAO is a professional organisation of curious and critical thinkers with strong analytical capabilities who act with the highest integrity. ANAO staff believe strongly in the purpose and objectives of the ANAO and are committed to ANAO goals. The ANAO attracts people who want to make a difference and demonstrate the ANAO values. The matters raised in this report do not indicate that there are gaps in the resilience of the policies, procedures and controls that make up the ANAO Integrity Framework.

5.3 In 2023–24 the ANAO will continue to focus on maturing the ANAO Integrity Framework with an emphasis on using a risk-based approach to identify areas for improvement as well as assessing additional data that we are able to capture to measure, monitor and report on integrity in the ANAO.

Footnotes