how the nsw public accounts committee works

1. Keeping the Audit Alive:
PAC examination of performance audits
PUBLIC ACCOUNTS Paul McLeay MP
COMMITTEE Chair, PAC

2. PUBLIC ACCOUNTS
COMMITTEE The Committee
The NSW Public Accounts Committee

3. PUBLIC ACCOUNTS
COMMITTEE
• PAC background and functions
• Examination of performance audits

4. PUBLIC ACCOUNTS
COMMITTEE OVERVIEW
• Created by Part 4 of Public Finance and Audit Act
1983
• Comprises six members of the Legislative Assembly
• Ministers and Parliamentary Secretaries excluded
from membership of the Committee
• Chaired by a Government member
• Four members required for quorum

5. PUBLIC ACCOUNTS
COMMITTEE HISTORY
• Established in 1902
• Examines financial and accountability issues on
behalf of the NSW Parliament
• Previously, limited range of issues
 unable to initiate own inquiries
 Parliament and Auditor-General reluctant to
refer matters
• Reforms in the 1980s
 expanded powers
 can now initiate its own inquiries

6. PUBLIC ACCOUNTS
COMMITTEE Current functions
Public Finance and Audit Act 1983, Section 57
• PAC’s primary functions are to examine:
 Total State Sector Accounts
 Financial reports of State authorities
 Opinions and reports of the Auditor-General
Restrictions on the Committee
x Government policy, unless inquiry referred by
Assembly or Minister
x Estimates of proposed expenditure

7. PUBLIC ACCOUNTS
COMMITTEE Source of Inquiries
Referral by:

9. • Referral by:
 Legislative Assembly

11. • Referral by:
 Legislative Assembly
 Minister

13. • Referral by:
 Legislative Assembly
 Minister
 Auditor-General

14. The NSW Public Accounts Committee

15. Referral by:
 Legislative Assembly
 Minister
 Auditor-General
 the Committee

16. Inquiries
Functions include reporting on circumstances
connected with Auditor-General’s reports

17. Auditor-General
Assists Parliament to improve
State accountability &
performance through auditing
Reports Refers
Parliament
Delegates to the PAC
detailed examination of
expenditure & audit reports
Refers PAC Reports
Assists Parliament to improve
State accountability &
performance through
examination of audits

18. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Former Approach — the PAC would:
• choose a performance audit once or twice a year for detailed
examination
• conduct a standard, detailed committee inquiry, publicly
calling for submissions and hearing from a broad range of
witnesses
• Produce a detailed report with recommendations reflecting
the Committee’s views on the subject matter of the audit

19. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
New Approach — the PAC:
• Examines every performance audit
• Seeks submission from agency 12 months after audit
• Refers agency’s submission to A-G for comment on consistency with
audit recommendations
• Holds hearings with agency and A-G
• Report with recommendations regarding response to the audit
• Report debated in Parliament
• Government response within 6 months

20. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Timeline:
• Submission request 12 months after audit
• One month for agency to produce submission
• Two weeks for Auditor-General’s response
• Hearings held periodically on a number of audits

21. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Agency submissions:
• Outline response to each recommendation, including:
Assessment of recommendation
Plans made in response
Timetable for completion
Current status and action taken to date

22. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Hearing Process:
• Questioning on issues arising from consideration of
submissions
• Auditor-General appears as a witness at the same time as
agencies
• A number of reports will be considered on a single day

23. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Parliamentary Debate:
• New sessional orders provide for debate of all committee
reports
• Opportunity for Members to raise enduring concerns or
points of interest in Parliament
• Alerts the whole House to issues raised in the Committee

24. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC

26. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC
• Ensure recommendations of value are not forgotten
Agency revised responses for hearing

27. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC
• Ensure recommendations of value are not forgotten
• Allow both recommendations and responses to be tested in the
political arena
Explain any rejection of recommendations
Demonstrate how any problems have been addressed

28. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC
• Ensure recommendations of value are not forgotten
• Allow both recommendations and responses to be tested in the
political arena
• Ensure CEOs account to the Parliament for how they respond to
recommendations
Outline changes to address issues
Explain any lack of progress

29. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC
• Ensure recommendations of value are not forgotten
• Allow both recommendations and responses to be tested in the
political arena
• Ensure CEOs account to the Parliament for how they respond to
recommendations
• Provide reality check to Audit Office
External assessment of recommendation in light of experience

30. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Purpose:
• Bring together the professional expertise of the Audit Office and
political authority and accountability of the PAC
• Ensure recommendations of value are not forgotten
• Allow both recommendations and responses to be tested in the
political arena
• Ensure CEOs account to the Parliament for how they respond to
recommendations
• Provide reality check to Audit Office

31. PUBLIC ACCOUNTS
COMMITTEE Review of Performance Audits
Outcome:
• Improved accountability & performance of State agencies

32. www.parliament.nsw.gov.au/publicaccounts