Accountability

Accountability is central to ensuring the Australian Government performs its functions effectively, efficiently, ethically and in the best interests of the Australian community. Various obligations apply to agency heads such as annual reporting, to ensure they are accountable to Ministers, the Parliament and the public for the way in which public money and resources are used and Government policies and services are delivered.

This section covers:

• Accountability to Ministers and Parliament
• Agency head relationship with Ministers
• Relationships with the Parliament
• Annual reporting
• Auditor-General

Accountability to Ministers and Parliament

Under the Public Service Act 1999 agency heads must uphold and promote the APS Value that requires the APS to be openly accountable for its actions, within the framework of Ministerial responsibility to the Government, the Parliament and the Australian public (section 10(1)(e)).

In upholding and promoting this APS Value an agency head must take all reasonable steps to ensure that he or she:

• understands the accountability framework within which he or she operates
• meets individual and agency statutory and reporting obligations
• is able, within the accountability framework, to demonstrate clearly and appropriately to Ministers, to the Parliament and to other stakeholders that he or she has efficiently, effectively and ethically used the resources allocated to him or her.

In addition, sections 57(2) and 66(2) of the Public Service Act require departmental secretaries and heads of executive agencies to assist the responsible agency Minister to fulfil their accountability obligations to the Parliament by providing factual information about the operation and administration of the agency.

The Australian National Audit Office Better Practice Guide 2003: Managing Parliamentary Workflow provides practical assistance to Australian Government agencies in their management of Ministerial and parliamentary support arrangements.

The Australian Public Service Commission’s Good Practice Guide 2006: Supporting Ministers, Upholding the Values provides guidance to Australian Government agencies on building and promoting effective relationships with Ministers and their offices.

Agency head relationship with Ministers

Under the Australian system of responsible Government, Ministers are responsible to Parliament for the overall administration of their portfolios, both in terms of policy and management and also for carriage in the Parliament of their accountability obligations to that institution.

Australian Government agencies provide advice to Ministers and perform functions on their behalf. To make effective decisions and to hold agency heads accountable for their performance, Ministers must have appropriate access to information about the operation of their agencies.

The Public Service Act 1999 provides a framework within which agency heads are accountable to Ministers. In particular:

• one of the APS Values provides that the APS should be responsive to the Government providing frank, honest, comprehensive, accurate and timely advice and in implementing the Government’s policies and programmes (section 10(1)(f) of the Public Service Act)
• the Secretary of a department, under the agency Minister, is responsible for managing the department and must advise the Minister in matters relating to the department (section 57(1) of the Public Service Act). Section 66 contains equivalent obligations for heads of executive agencies.

Under the Financial Management and Accountability Act 1997, agency chief executives are also accountable to the Finance Minister. For example, the Finance Minister is entitled to full and free access to the accounts and records of an agency subject to any law that prohibits disclosure of particular information (subsection 48(2)).

The enabling legislation of some statutory agencies may also provide Ministers with powers to direct and/or obtain information about the performance and activities of the agencies for which they are responsible. These are too specific to explore here, and agencies should clarify what these additional responsibilities are, if any.

A Guide on Key Elements of Ministerial Responsibility

A Guide on Key Elements of Ministerial Responsibility (the Guide) sets out in summary form the main principles, conventions and rules by which Government at the Commonwealth level is conducted. The Guide is being revised to incorporate the Standards of Ministerial Ethics, the Lobbying Code of Conduct and the Code of Conduct for Ministerial Staff. The revised Guide will also outline current practice relating to the provision of facilities and services to Ministers and Parliamentary Secretaries.

Relationships with the Parliament

The Parliament is a major mechanism of accountability in the Australian system of Government, by facilitating scrutiny of the policies and actions of the Government of the day. Agency heads have a responsibility to comply with a number of practices designed to ensure accountability to the Parliament and the public for the operations and performance of their agencies. These include annual reporting obligations and the provision of evidence to parliamentary committees.

The House of Representatives and the Senate are the two Houses of Australia’s Commonwealth Parliament (also known as the federal p arliament).

Both houses are involved in debating and passing bills, watching over Government administration and expenditure and conducting inquiries.

The Senate is sometimes seen to have a special ‘federal’ role. It consists of 76 Senators, twelve from each of the six states and two from each of the mainland territories . Since the 1970 s, the Senate has assumed an expanded committee role through the scrutiny of budget estimates, proposed legislation (bills) and delegated legislation.

Parliamentary committees

The principal purpose of parliamentary committees is to perform functions which complement the role of the Houses. These functions include finding out the facts of a case or issue, examining witnesses, sifting evidence, and drawing up conclusions.

The House of Representatives and the Senate have comprehensive systems of committees, which enable members to inquire into issues of importance to their constituents and the nation as a whole. By seeking public submissions and conducting public hearings, parliamentary committees enable the public to express their views and to participate in the parliamentary process.

Parliamentary committees comprise elected members of Parliament from all parties as well as independent members of Parliament. They are established by one or both Houses of Federal Parliament to inquire into issues and report on those issues to the Parliament. The House of Representatives and the Senate each operate their own system of parliamentary committees. In addition, there are joint committees on which Members of the House and Senators serve together. Statutory committees are those established by an Act of Parliament. All existing statutory committees are joint committees and include:

• Joint Committee of Public Accounts and Audit
• Joint Standing Committee on Public Works
• Joint Committee on the Broadcasting of Parliamentary Proceedings
• Parliamentary Joint Committee on Intelligence and Security
• Parliamentary Joint Committee on Corporations and Financial Services
• Parliamentary Joint Committee on the Australian Crime Commission (formerly the Joint Committee on the National Crime Authority)

Parliamentary committees serve four main functions. They enable:

• the conduct of inquiries into issues by members of Parliament who report on their findings
• public input to Parliament, by providing people with opportunities to present their views to their elected representatives on topics under investigation by the particular committee
• scrutiny of Government administration, by watching over the expenditure of public money and asking the Government or public servants to explain their actions and decisions
• consideration of legislation before it is voted on in the Parliament.

Committees have considerable powers which are set out in the standing orders of each House and the statute or motion agreed by the chamber establishing the committee. To enable them to carry out their functions effectively, investigatory committees are normally given powers to summon persons to give evidence and to produce documents. Public servants, including agency heads, are often requested to give evidence to and appear before committees.

Rights and responsibilities of witnesses before parliamentary committees

The Government Guidelines for Official Witnesses before Parliamentary Committees and Related Matters require public servants to assist Ministers to fulfil their accountability obligations by providing full and accurate information to the Parliament about the factual and technical background to policies and their administration. The guidelines aim to encourage the freest possible flow of information between the public service, the Parliament and the public. The guidelines apply primarily to the preparation of submissions and the giving of evidence to parliamentary committees by officials.

Joint Committee of Public Accounts and Audit

The The Joint Committee of Public Accounts and Audit (JCPAA) is one of the committees under which agency heads may face scrutiny. The JCPAA is established under the Public Accounts and Audit Committee Act 1951 with a charter to scrutinise, usually by means of public inquiry, the performance of all Australian Government agencies in spending the funds appropriated to them by the Parliament. In this way the JCPAA assists the Parliament by helping ensure that agencies are held to account for their use of public money and Australian Government resources. Agency heads are responsible for ensuring their agencies are appropriately represented at hearings and that accurate and timely responses are provided to the JCPAA. . The specific duties referred to the JCPAA by the Public Accounts and Audit Committee Act include powers to examine and report on any matters connected with the financial accounts or statements of agencies or raised in reports of the Auditor-General. The JCPAA has the capacity to determine its own work program and priorities and may consider matters referred by the Parliament.

The Chairman of the JCPAA refers all reports of the Committee (both general reports and quarterly reviews of Auditor-General reports) to the Minister for Finance and Deregulation once they have been tabled in the Parliament.

The Department of Finance and Deregulation writes to those agencies identified in the recommendations, advising what response is required.

Consideration of estimates by Senate legislation committees

Estimates of proposed annual expenditure of Government agencies are referred by the Senate to its legislation committees for examination and report. Public hearings of the committees are held after the Budget (budget estimates hearings), towards the end of the year (supplementary estimates hearings), and early in the next year following the introduction of additional estimates (additional estimates hearings). During Senate estimates hearings, officers of departments or agencies are called by the committees to give evidence in relation to proposed expenditure. Although Government agencies meet their obligation to account to Parliament in a number of ways, it is through the consideration of estimates three times a year that accountability is most directly manifested.

Parliamentary privilege

The term parliamentary privilege refers to the powers and privileges (or immunities) of the h ouses of the Commonwealth Parliament. Commonwealth law in relation to parliamentary privilege includes section 49 of the Constitution, which transferred the powers, privileges and immunities of the United Kingdom Parliament at the time of federation (1901) to the Parliament of the Commonwealth of Australia.

The rules, conventions and practices of parliamentary privilege affect the relationships between the arms of Government—particularly the Parliament and the Judiciary. Parliamentary privilege developed to reflect the Parliament’s special responsibility to govern effectively.

Commonwealth law relating to parliamentary privilege has been further elaborated in the Parliamentary Privileges Act 1987.

That Act clarifies some aspects of the law. Section 16, in particular, confirms that members, witnesses and others taking part in Parliamentary proceedings, including parliamentary committees, are generally immune from civil and criminal action and examination in the courts in relation to those proceedings. Parliamentary proceedings themselves are also immune from examination in courts and tribunals.

Annual reporting

Disclosure of information to the Parliament and the public about the performance of APS activities and functions is essential to sound governance in the APS. An agency’s respective annual report is the principal vehicle by which it publicly reports on its performance. Other relevant reports are also tabled on an annual basis, for example the Access and Equity Annual Report.

Agency annual reports

Sections 63 and 70 of the Public Service Act 1999 require secretaries of Departments and the heads of executive agencies (respectively) to provide their Minister with an annual report that details their activities during the year for presentation to the Parliament. The report must be prepared in accordance with the Requirements for Departmental Annual Reports (the Requirements) as approved by the Joint Committee of Public Accounts and Audit. Statutory agencies have annual report requirements specified in their legislation. As a matter of policy, the Requirements also apply to prescribed agencies under the Financial Management and Accountability Act 1997 (FMA Act)

Annual financial reporting under the Financial Management and Accountability Act

Chief executives of agencies subject to the Financial Management and Accountability Act 1997 (FMA Act) (in most cases, the agency head) are required to:

• prepare annual financial statements, in accordance with the Finance Minister's Orders, which give a true and fair view of the matters required by those Orders ( subsection 49(2)); and
• provide annual financial statements to the Auditor-General (section 49(1)).

These audited financial statements are included in agency annual reports.

Access and Equity Annual Report

The Access and Equity Annual Report is prepared by the Department of Immigration and Citizenship (DIAC).

Information for the report is provided by agencies covered by the Public Service Act 1999 against the performance management framework of the Charter of Public Service in a Culturally Diverse Society (the Charter). The annual report report is based on input provided by agencies on their performance in providing accessible services to people from culturally and linguistically diverse backgrounds and is tabled in Parliament by the Minister for Citizenship and Multicultural Affairs.

Energy Efficiency and Environment reporting

Under section 516A of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), Australian Government agencies must ensure that their annual reports include information on:

• how the activities of their agency accord with the principles of ecologically sustainable development
• how the activities of their agency affect the environment
• measures undertaken to minimise the impact of their activities on the environment.

Reporting guidance can be found at the Department of the Environment and Water Resources website.

The policy Energy Efficiency in Government Operations includes requirements for agencies to consider energy efficiency and greenhouse gas emissions in purchasing or leasing goods and services including buildings, houses, equipment, appliances and vehicles. Agencies are required to report annually on their energy consumption and greenhouse gas emissions to the Australian Greenhouse Office for inclusion in an annual whole-of-Government report of the total energy use and estimated greenhouse gas emissions of Australian Government agencies.

Agency heads also are required to report to and be accountable to their Ministers for progress against all measures taken in relation to energy efficiency. See ANAO Performance Audit No. 24, 2002-2003 Energy Efficiency in Commonwealth Operations-Follow up Audit.

State of the Service Report

Section 44(2) of the Public Service Act 1999 provides, among other things, that the Public Service Commissioner must provide a report to the Parliament on the state of the Australian Public Service during the year. One of the main sources of information for the report is a questionnaire sent to agencies employing 20 or more staff under the Public Service Act. Another important source is a sample survey of APS employees working in agencies with 100 or more APS employees.

Agency heads must give the Public Service Commissioner whatever information the Commissioner requires for the “State of the Service Report’ under section 44(3) of the Public Service Act.

Past State of the Service Reports can be found on the Australian Public Service Commission website.

Financial management compliance

All entities in the General Government Sector must report annually on the financial management and financial sustainability of the entity to their portfolio Minister. Agencies under the Financial Managementand Accountability Act 1997 (FMA Act) are required to provide a Certificate of Compliance (Certificate), and bodies under the Commonwealth Authorities and Companies Act 1997 (CAC Act) are required to provide a Compliance Report (Report).

The Certificate requires agency Chief Executives to certify their agencies’ compliance during the previous financial year with the:

• FMA Act, the Financial Management and Accountability Regulations 1997, and the Financial Management and Accountability Orders 2008
• Financial Management and Accountability (Finance Minister to Chief Executives) Delegation 2007 (No. 2) (as amended from time to time)
• Australian Government’s foreign exchange risk requirements
• legal and financial requirements for the management of Special Accounts, and
• financial management policies of the Commonwealth.

The Certificate also requires Chief Executives to state whether their agency is operating within the agreed resources for the current financial year, and has adopted appropriate management strategies for all currently known risks that may affect the financial sustainability of the agency.

The Report consists of two Parts:

• Part 1 requires the directors of CAC Act bodies to report whether the body and its directors have complied with the CAC Act legislation, and
• Part 2 requires the directors to report whether the body’s costs are forecast to be within estimates of external receipts for the current financial year.

Auditor-General

The Auditor-General, as independent auditor of Commonwealth public sector entities, plays an important role in ensuring public sector entities are accountable for their use of public resources.

The Auditor-General and his or her staff, the Australian National Audit Office provide an independent review of the performance and accountability of public sector entities through the conduct of financial statement audits and performance audits, the results of which are tabled in parliament.

Financial statements audits provide independent assurance on the financial performance and position and financial administration of Commonwealth public sector entities to the Parliament, the Executive, boards, chief executives and the public. Depending on the body being audited, these audits are conducted under the Financial Management and Accountability Act 1997 or the Commonwealth Authorities and Companies Act 1997.

Performance audits provide independent assurance on the administration of Government programmes by public entities with the aim of improving public sector administration and accountability.

Independence and quality of assurance is therefore critical to the Auditor-General's role.

Under the Auditor-General Act 1997, the Auditor-General has complete discretion in performance of his/her function or powers and has wide powers of access to information and publications. The Auditor-General may report on any matter at any time to the Parliament.

All audits are conducted against the ANAO Auditing standards, which incorporate professional auditing standards.

The ANAO is itself subject to audit by its independent auditor, under the Auditor-General Act.