Accountability reform, parliamentary oversight and the role of performance audit in Australia

In its Budget Paper No. 4, 2015–16: Agency Resourcing, the Australian Government sets out a ‘smaller government’ reform agenda aimed at transforming and modernising the public service while eliminating waste and duplication (Commonwealth of Australia 2015: 1). The government is methodically examining all aspects of the public sector, from the functions of agencies to how they operate and are structured. Further, specific reforms in the 2015–16 budget are making a material contribution to budget repair while improving the responsiveness and effectiveness of government. Key elements of the smaller government reforms include: 1) reducing the size of the Commonwealth public service; 2) public sector wage restraint; 3) functional and efficiency reviews; and 4) streamlining government bodies.

These changes create a greater demand for reform of organisational strategic priorities and involve related issues such as organisational structure, accounting and accountability systems, strategic planning, performance management and reporting and value for money in public sector organisations (Lapsley and Pettigrew 1994; Hood 1995; Hoque and Moll 2001; Hoque 2015). This chapter focuses on the relationships between performance management, parliamentary oversight and performance (or value-for-money) auditing in the context of the Australian Government’s reform agendas for the past two decades. It describes how the audit role has expanded from compliance to performance and the changing nature of the relationship between the audit office, the executive and the legislature. 

The remainder of the chapter is organised in the following manner. Section two discusses the nature of accountability and the structure of government, section three presents a discussion on the state of audit roles in Australia and section four presents the research evidence on the challenges involved in performance auditing. This is followed by a discussion on the performance of the auditor-general. The final section concludes by outlining some lessons that can be learned from Australia’s experience by other nations across the globe.