Executive Encroachments on the Independence of the Commonwealth Auditor-General

Until recently Commonwealth governments have been able to have very extensive executive intrusions in public sector audit accepted largely as benign and untainted by political interests, thereby maintaining an illusion of an unfettered, autonomous public sector audit function. An interpretation of independence has been embedded which has been at odds with the operational reality. A conditional form of independence has been promoted as substantive independence and has thereby created multiple and often conflicting beliefs about what is and what ought to be the nature of independence in public sector audit. Differences in the independence of the person of the auditor-general have been confused with the independence of the office.     

What Should be the Role of the Auditor-General in the Context of Managerialist Government and New Public Management?

The role of an auditor-general may be set out in somewhat dry terms as follows: providing expert, independent, public opinions on the financial affairs of government and its bodies and the efficiency, economy and effectiveness with which governments use the resources and power provided to them by taxpayers. This definition is relevant to any environment, managerialist or otherwise, for it is silent on the methods by which these opinions are reached. There will always be a requirement for some official with a duty to stand apart from executive government to review, independently assess and report to the people.
In my opinion an auditor-general should always be mindful that his or her ultimate responsibility is to the people. For this reason the function appropriate to an auditor-general will continue under some guise or other whatever the managerial form of government. To put it another way, our form of government is more likely to change than the functions of the auditor-general. In the long run, stupidity or hubris in public administration is unlikely to long outweigh the practical, commonsense needs of society — despite the evidence of the last decade. In reviewing the auditor-general's role any changes should only be made if they ensure that the independence, strength, institutional memory, adaptability and continued professionalism of the function is retained.     

DEVELOPMENTS IN PUBLIC SECTOR AUDIT: HOW EFFECTIVE ARE EFFICIENCY AUDITS?

Abstract: A crucial issue facing the public sector is the extent to which efficiency and effectiveness are elements in the concept of accountability to parliament and the people. This paper argues that the recent moves towards efficiency audit in many countries, including Australia, need to be extended to effectiveness audit, and that to the extent that this does not occur, efficiency (and compliance) audit in the public sector is ineffective and accountability lacking.
An examination of Australian public sector auditing is undertaken first, based on a discussion of the 1974–76 Royal Commission on Australian Government Administration, the 1977–82 Review of New South Wales Government Administration and the subsequent implementation of their recommendations as the means of clarifying and elucidating the definitions of compliance, efficiency and effectiveness audit, as well as a means of critically analysing Australian developments. Developments in public sector auditing in the United Kingdom and the United States of America are critically examined. Finally, the future prospects and problems facing public sector audit in Australia are reviewed, and policy options relating to the development of comprehensive audit are outlined.     

Internal audit public sector capability: a case study

Internal auditing is an essential part of governance and can be a valuable asset to public sector institutions. However, for public sector internal auditing to effectively support management, the internal audit function (IAF) should be capable. The question arises as to how the capability of public sector IAFs can be measured. The Institute of Internal Auditors Research Foundation published the Internal Audit Capability Model (IA‐CM) in 2009 to provide a capability self‐assessment tool for public sector IAFs. The main objective of the study is to determine whether the IA‐CM can be used successfully to measure internal audit capability levels, and a secondary objective is to determine whether the tool can be successfully adapted for a specific public sector organisation and/or country. To achieve these objectives, the model was applied in a South African public sector organisation by means of a case study, where the IAF of the case was ranked against the key process areas (KPAs) of the model. The ranking was conducted based on a documentary review and interviews with applicable officials within the case. The model was successfully tested in measuring the internal audit capability level of a South African public sector organisation; however, a total of eight potential feasibility hindrances or considerations have been identified that could negatively affect the implementation of seven of the KPAs of the IA‐CM. Copyright © 2015 John Wiley & Sons, Ltd.     

Commercialisation of state government legal services

Most people who have worked in the public sector for over a decade have experienced dramatic change in the way they do business. For some, the change has been rapid. Others have been able to hold onto traditional methods. One area of business steeped in tradition is the area of legal services. In the Queensland public sector, current changes in the way in which legal services are provided reflect many of the changes that have already occurred in other business units. We should learn from the experiences of others, tap into the needs of those utilising legal services and reflect upon the importance of those traditional values. This article argues that the time for a comprehensive and transparent review of legal services in the Queensland public sector is now.     

Public sector audit and influence the investment institutional background during a pandemic

The study purpose was to assess the impact of public sector audit on investment climate formation under the COVID-19 pandemic and to develop recommendations to improve its effectiveness. For this purpose, a multistage research project was developed with the participation of auditors from Russia, Kazakhstan, and Ukraine. The project was based on the primary information obtained in the course of expert interviews. Testing the methodological approach with experts from these countries allowed proving the main study hypotheses, according to which the public sector audit has an indirect positive impact on investment climate formation. Such an audit influences the main impact factors through improving public administration efficiency, the fight against corruption, and the provision of the regulatory framework. During the testing, the main directions for improving public audit for a more favorable investment climate were formulated. The developed methodological approach makes it possible to obtain an expert assessment of the impact of the public audit on investment climate formation. At the same time, partial use of statistical methods makes it possible to replicate the study in the form of an expert interview, which increases its attractiveness for researchers in conditions of shortage of qualified interviewers.     

PUBLIC SECTOR CULTURE MANAGERIALISM OR MULTICULTURALISM?

Abstract: Despite dramatic change in the Australian public sector, little attention has been paid to organisational culture. With the importation of private sector strategies and structures the traditional values of public administration have been eroded. Public organisations and their members have experienced consequences of "culture shock", even "cultural revolution". Managerialism is an introduced culture which has been criticised by some academics and public servants. It is seen as inappropriate to the distinctive values and operating context of the public domain, as purporting to value-free technique while in effect operating as the mystifying ideology of a dominant elite. Managerialism has been constructed, it is argued, on simplistic and now superseded concepts of rational "management man", goal setting and planning. While managerialism is not the culture which will endow public organisations with new meaning and propel them to excellence, it can expect to increase its hold in the absence of the development of new models of the culture of public organisation. While new public sector cultures will need to be organisation-specific, to accommodate the differentiation between and within public organisations, an overarching framework of public sector values and principles will be required. One of the distinctive features of most public sector organisations is die number and diversity of their stakeholders. A multi-cultural model of public sector culture is proposed, which construes this diversity of subcultures as an instrument of strategic flexibility.     

Probity Auditing: Keeping the Bureaucrats Honest?

The use of probity audits has flourished in the public sector in recent years. This growth has been accompanied by the development of probity guidelines by a number of central agencies and infrastructure providers across Australia. However, these guidelines tend to focus on competitive procurement processes and ignore broader factors applying to other processes in which probity audits are also used. Further, as there are no professional standards governing a probity audit (unlike most other types of audit), it is important that agencies have a clear understanding of their benefits and limitations and of the skills and experience required of a probity auditor before they commission one.     

A Framework for Reforming the Independence and Accountability of Statutory Officers of Parliament: A Case Study of Victoria

Considerable attention has been given to the independence of auditors-general in the literature. However, there are other officers of parliament who also have roles that may require protection from the excessive use of power by the executive arm of government. In response to the recent Public Accounts and Estimates Committee Inquiry into a Legislative Framework for Victorian Statutory Officers of Parliament, the study compares the enabling legislation of four Victorian officers of parliament in terms of their powers, independence, funding and mandate as well as the accountability mechanisms available to parliament in terms of their appointment, tenure and oversight. The four officers are: the auditor-general; the ombudsman; the regulator-general; and the director of public prosecutions. A number of notable differences in the enabling legislation are identified and reform options for strengthening such legislation are presented.     

The political economy of an African public enterprise: A longitudinal case study of the administrative and economic operations of the Sierra Leone Port Organization

In most of the post-colonial states of sub-Saharan Africa, both the size of the state bureaucracy has grown and its functions proliferated. Whatever the economic rationale of public sector organizations, they do not exist and operate in a social and political vacuum. This paper argues that they are typically an integral part of a patron clientelist political and economic system on which the foundations of government sometimes depend. The consequences for the economic performance of public sector organizations arising out of this socio-political context is now widely recognized in the growing literature on African public enterprise. Contributions to this discussion, however, have tended to be dominated by economists and public administration specialists who have generally adopted a technocratic problem solution approach. In isolating their analyses of the performance of African parastatals from an appraisal of the role of the state, this approach fails to situate adequately the problem of performance in its proper context. This paper provides a case study which examines the administrative and economic operations of the Sierra Leone Port Organization in the colonial and post-colonial states. In arguing that problems of performance of African public sector organizations also require political solutions this discussion extends the discussion beyond a technocratic focus.     

Dynamics of Sector Switching: Hazard Models Predicting Changes from Private Sector Jobs to Public and Nonprofit Sector Jobs

Policy makers and public managers emphasize the importance of bringing private sector experience and skills into the public and nonprofit sectors. One result is an increased focus on privatization and contracting out, developments to which researchers have been attentive. However, the long-standing practice of hiring people with industrial experience into the public and nonprofit sectors has received remarkably little attention. This study, based on questionnaire responses from mid- and upper-level personnel in public and nonprofit sector organizations, attempts to understand the dynamics of sector switching from the private into either the public or nonprofit sector. Using event history analysis, the article looks at switching patterns. The probability of switching into the public sector is much higher for those who held a managerial occupation in their previous private sector job than for those who held professional and technical positions. Having more subordinates in a previous private sector job is associated with a lower likelihood of switching into a public sector job. By contrast, switching into the nonprofit sector is more often associated with a promotion.     

Computer-Based Performance Information for Executives in Local Government

Performance information is crucial to effective management. Computer-based information systems (CBIS) now play a significant role in the effective delivery of information to senior managers. Executive information systems (EIS) are emerging as popular tools to assist organisations in their strategic decision-making processes. This trend has spread from the private to the public sector, and is now evident in Australian government organizations
This article draws on the findings of a survey into the uses and benefits of CBIS and EIS, from a sample of Australian local government organisations. The study shows that lessons from the private sector are being heeded by system developers in public organisations, leading to successful EIS projects, or at least improved CBIS. The study indicates that EIS, which were originally developed for profit-oriented private companies, are now seen as appropriate for many public sector organisations, providing effective delivery of information to senior managers. Survey results indicate that improved information systems give executives a more accurate picture of their organisation's performance and so provide support for improved strategic decision-making. In addition, EIS are seen by respondents as offering significant benefits not only to managers but also to the rest of the organization.     

PERFORMING AUDITORS?: ASSESSING AND REPORTING THE PERFORMANCE OF NATIONAL AUDIT OFFICES—A THREE-COUNTRY COMPARISON

Abstract: This article reviews self-assessment and reporting strategies of national audit offices in the United Kingdom, Sweden and Australia and develops a framework for the reporting of their performance. There is a common emphasis in the audit office objectives on serving their primary client and on improving the performance of the public sector, but there are differences in emphasis regarding the clients being served. The differing approaches to assessing and reporting their own performance can in part be attributed to differences between their mandates, objectives and identification of the clients being served. The audit offices have developed complementary internal quality assurance processes which generate additional performance information and have been subject to external peer reviews which assess and report on their performance. A framework is developed which clarifies the relationship between audit office objectives and the measures used. It involves a hierarchy of performance parameters, including effectiveness, efficiency and workload and gives priority to meeting the needs of the primary client. The study has revealed that significant progress is being made in particular areas of assessing and reporting audit office performance and this should encourage audit offices to share their experiences internationally to enhance their own accountability to their primary clients and the communities they serve.     

PUBLIC MANAGEMENT OR PUBLIC ADMINISTRATION?

Abstract: The debate over managerialism has been the most controversial issue in Australian public administration journals in recent years. Although most articles have been critical, there have been responses in favour of the changes by senior public servants. One unfortunate consequence of this debate has been the appearance of a gap between academic public administration and public service practice.
This paper argues that, from several angles, the work now carried out by public services is management rather than administration. It argues that managerialism is a long-overdue reform to a model which has outlived its usefulness. The traditional model of public administration was an irrelevance for many years; it was never efficient or effective and deserved to be replaced. However, public management does not necessarily mean the widespread and uncritical adoption of practices from the private sector. What it should mean is that a distinctive public management needs to be developed. This should take account of the differences between the sectors, but still recognise that the work being done by public servants is now managerial rather than administrative.     

Charity,Philanthropy, Public Service,or Enterprise: What Are the Big Questions of Nonprofit Management Today?

"Nonprofit sector" issues, both in public discourse and pedagogy, are too narrowly cast as problems confronting public-serving nonprofits and grant-making foundations. Consisting also of membership organizations, educational institutions, and political pressure groups, the sector constitutes a major force in society which, in its interactive entirety, might better be termed a "social economy." This social economy both influences and is shaped by public administration, and it is now very much under public scrutiny. The author raises seminal questions that challenge the mission, management, and resources of this critical sector of society.     

Service Delivery: The Audit Dimension

Reporting of performance information on public sector services has increased substantially in recent years. The audit of such information, however, is still relatively uncommon. In 1989 the Audit Office in New Zealand was confronted with a legislative requirement to audit Statements of Service Performance (SSPs). This paper backgrounds New Zealand's shift in emphasis from program effectiveness audits to the audit of non-financial performance information, describes the development of audit methodology in this area and identifies lessons learned.     

Excellence at What Cost? Austerity and the Reform of the School System in England (2010–2016)

The reform of the school system, which has been conducted by the Coalition and Conservative governments since 2010, has largely been austerity‐driven. In spite of the governments’ pledge to protect their budgets, schools have been severely hit by spending cuts. The reform programme has itself been integral to the fiscal consolidation plans by promoting a more cost‐effective system of state schooling. This article discusses the relationship between austerity and reform, and looks at the consequences for the concept of public service. Some specific aspects of the new institutional framework are examined, especially the creation of an independent state sector made up of academies and free schools, which has entrenched the involvement of private sector firms in education. The overhaul of the school system, which started nearly thirty years ago, has now reached a new decisive stage. However, considering the complex relationship between multiple actors and the opposing forces at work, one cannot say with any certainty that it will cause the demise of public service state education.     

Contracting Out and Accountability

Governments are increasingly moving to contract out the provision of public services which have previously been delivered by public service departments. Contracting out typically implies provision by private sector contractors. However, it may also include in-house provision by public service departments or other public agencies where the right to provide is won through competitive tendering and is governed by contract. At the Commonwealth level, the trend has been given added impetus by the Coalition government elected in 1996 (Reith J 996; National Commission of Audit 1996).
The main rationale for contracting out is to improve efficiency in service provision by harnessing the virtues of competition, in particular the superior productivity engendered among competitive providers (Industry Commission (IC) 1996, B3.4; Appendix E). At the same time, there is a legitimate expectation that providers of public services paid for by public funds will be publicly accountable (IC 1996, BI). However, contracting out has the potential to reduce the extent of public accountability by transferring the provision of public services to members of the private sector who are generally not subject to the same accountability requirements as public officials. Indeed, reduction in such accountability requirements may be one of the reasons for the greater efficiency of the private sector.     

Mandate, Independence and Funding: Resolution of a Protracted Struggle Between Parliament and the Executive Over the Powers of the Australian Auditor-General

This paper examines a political struggle in the Australian federal sphere over parliament's right, exercised through the Office of the Auditor-General, to oversee the accounts and management practices of the executive and entities created by legislation to deliver public services. The period from the early 1970s witnessed a dramatic shift in the method of delivering government services to the community and an increasing attention to economy, efficiency and effectiveness in their administration and delivery. The Australian government has increasingly used private sector organisational models and modern management and accounting practices to deliver a wide range of services. The rise of these 'new public management' practices resulted in an erosion of traditional parliamentary oversight of government management and reporting activities. This historical analysis is based upon Porter's (1981) processual analytical framework. The analysis focuses on the action of groups such as the executive, parliamentary committees and the Office of the Auditor-General as evidenced in documents produced in response to critical events. Models developed by Funnell and Cooper (1998) are used to characterise the transition of public sector audit from a traditional administrative model to a corporatist model.