A report by the South Australian Auditor General recommends boosting the independence of the office, saying the way it’s currently funded puts it at risk of government interference.
It also calls for fixed term appointments and an overhaul of legislation laying out the auditor’s responsibilities, which hasn’t been updated in more than 35 years.
The report by Auditor General Andrew Richardson, titled Modernising SA public sector audit and strengthening audit independence recommends a review of the Public Finance and Audit Act (PFAA) to modernise it and strengthen the Auditor-General’s independence.
“The PFAA no longer reflects contemporary arrangements for public sector audit when considered against other Australian examples or international benchmarks,” Mr Richardson says.
The report says a 2020 survey of ten jurisdictions by the Australasian Council of Auditors‐General (ACAG) put SA second last in terms of audit independence, ahead only of the NT.
Vulnerable to government influence
The survey also found South Australia was the most vulnerable to influence by the government of the day, because “the legislation is silent regarding the budget for the audit office, leaving it under the direct control of the executive government.”
“The existing budget arrangements inherently undermine the independence of the Auditor-General,” Mr Richardson says.
He also says South Australia commits fewer resources than the Commonwealth and other states to investigating the management of resources by the public service because of budgetary constraints.
The report says, unlike other jurisdictions, the SA Auditor doesn’t have the power to exempt entities from audit, conduct joint audits with other public sector offices, delegate powers or access cabinet documents.
And while auditors general in other jurisdictions are appointed for fixed terms to “avoid complacency”, in SA an auditor can remain in the job until they are 65. This means a South Australian auditor general appointed at 45 could hold the position for 20 years.
There’s also a need for a senior ICT technical officer within the office to manage cyber risks, and for a greater investment in data analytics, Mr Richardson says.
Adelaide Oval an ‘unnecessary’ obligation
Meanwhile, he has a bone to pick over ongoing obligations relating to Adelaide Oval.
During the $535 million development of the Adelaide Oval, which was finished in 2014, the Auditor General was required to report on the development every six months.
Mr Richardson says although this reporting requirement is now complete, his office still has to monitor and report on any future development activity at the oval involving public money.
“In my view this is an unnecessary ongoing obligation, as any future redevelopment would be considered in my annual audit of the Adelaide Oval,” he says.
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