An audit has found a series of shortcomings relating to the oversight of travel allowances paid to public servants employed in the Department of Defence.
The report by the Australian National Audit Office (ANAO) found that Defence does not have a “fully effective” administration of travel allowances, and has failed to properly respond to past recommendations to fix the system.
“Defence’s arrangements for providing assurance over the payment of travel allowances to APS employees are not fully effective,” the report says.
“Defence has identified shortcomings in the design of detective controls for credit cards and ANAO testing of a sample of travel allowance transactions indicates that preventative controls are not fully effective.
“This performance audit identified a number of instances where Defence reports to senior committees overstated the progress of activities intended to improve assurance across the administration of travel and credit cards. These instances included … advice that recommendations from reviews and audits had been addressed, when they had not.”
The ANAO said the report came came after Defence had identified fraudulent use of government credit cards as a risk, and recent audits of financial statements by the audit office identified non-compliance with regard to travel allowance payment approvals.
Defence said it was working to improve administration and oversight of travel allowances and had made “significant progress” in the last six months.
It said it had also this year established a Travel Board, bringing together the Defence groups responsible for overseeing travel expenditure.
$18m travel allowance bill
The report shows public servants employed in the Department of Defence racked up a bill of more than $17,800,000 for travel allowances in 2017-18.
ANAO also identified 36 individual cash transactions of over $1,000 withdrawn by APS employees from ATMs between 2016-2018.
It tested 296 random travel allowances between 2016-18 and concluded that Defence was unable to show evidence the necessary approvals had been obtained for 63 of them, or 21 per cent.
“The testing indicates that Defence travel allowances are not being managed in accordance with the approval requirements of Defence’s Accountability Authority Instructions or Financial Delegations Manual,” the report says.
It found between 2016-87, 13 out of 98 sampled transactions were in breach of the Public Governance, Performance and Accountability Act, as well as Defence policy. In 2018-19 a third of transactions didn’t have sufficient documentation to support the payment.
A 2015-16 audit into Defence’s management of credit and other transaction cards found the department did not have a complete and effective set of controls to manage credit and other transaction cards. Defence had not fully implemented the recommendations of that review, the current audit said.
Meanwhile, a 2015 review of red tape in Defence concluded that travel processes were overly complicated and labour-intensive, and recommended moving to an automated system.
In December 2016, Defence approved $11.9 million to implement the Travel and Expense Management project, which was ‘paused’ in March 2019, and subsequently ‘ceased’, after expenditure of over $10 million and delays in implementation, the current ANAO report said.
It also found recommendations for a “single brief policy guide in plain English” arising from the review had not been addressed, even though Defence said it had.
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