Amid champagne gifts and shameless rorting, one institution is fighting back

Champagne is not a word you’d expect to find in an audit of an Australian government department and a global weapons manufacturer. But a recent report from the nation’s audit office into how the Department of Defence ended up with a $1.2 billion contract with Thales, “champagne” appeared five times.

In the same report, the word unethical was used on eight occasions and, more worryingly, the issue of value for money – and whether the department managed to achieve it on behalf of taxpayers – was raised 49 times.

The gift of a bottle of champagne was just one issue raised by the national audit office.Credit: Istock

That report is one of many released over the past two months by the Australian National Audit Office, all of which point to huge problems within parts of the public service, its attitude to money, and a culture that has clearly deteriorated.

The audit office is a vital element of the nation’s democracy. So significant is the role of auditor-general, its creation was the fourth piece of legislation ever passed by our first prime minister in 1901.

The job is to scrutinise Commonwealth spending, and the structures put in place by departments and agencies to roll out programs and policies. This is forensic examination, not the political show trials seen in Senate estimates, where one party often tries to embarrass the other.

The aim is to improve how taxpayer money is spent, to ensure policies are working (rather than being covered up with a blizzard of political spin), and to bring attention to shortcomings.

It was the audit office, for instance, that revealed the Morrison government’s misuse of the Community Sports Infrastructure Grant with a colour-coded spreadsheet that identified how project approvals corresponded with Coalition electorates.

It was also the audit office that revealed the same government had politicised a $600 million commuter car park program, which included discovering a document sent between Alan Tudge’s and Scott Morrison’s offices ahead of the 2019 election, titled “top marginal electorates”.

The recent champagne audit found a Defence official not only sought a bottle of pop from Thales during discussions over the supply of explosives and munitions, but then supplied internal departmental advice to Thales, which ultimately won the contract despite its tender response being found not to offer taxpayers value for money. Later, that same official left the department and took up a senior position with, you guessed it, Thales.

The auditor-general noted “evidence of unethical conduct” by the department, and the National Anti-Corruption Commission has been asked to investigate.

Since the beginning of the year, the audit office has been busy uncovering even more issues. These are so egregious they make the sports rort look like a family picnic.

An audit uncovered huge problems in the upgrade to the Australian War Memorial.Credit: Alamy

This is not just a situation of the auditor mopping up messes left by previous governments, either. Though a national soil strategy was committed to in the Morrison government’s 2021-22 federal budget, the Albanese government fully adopted the funding commitment last year.

Last month, however, the audit office noted huge problems with the strategy, not least that the design and early implementation of the plan “was not effective”.

In April, the handling of a $500 million upgrade to the Australian War Memorial – overseen by the previous government – was also ripped into, with the audit office finding Morrison announced the project before a business case had been put together, that there were conflicts of interest over key contracts, and that taxpayers were on the hook for substantial cost blowouts.

On May 8, the audit office released a report into how the Department of Home Affairs managed roughly 5000 migration agents who are often used by people seeking to move to Australia. It found the department was simply not effective at doing its job, determining it didn’t know if agents were “fit and proper to give immigration assistance and are persons of integrity”.

See a pattern here? In all reports, problems within the bureaucracy, poor decisions, a waste of public money, and substandard outcomes shine through.

The adverse findings also highlight another growing problem: the ongoing breakdown in our political system that has become all announcement and no follow-through.

Last week, the Joint Committee of Public Accounts and Audit, which examines audit office reports, released a report into an audit of the $2 billion Community Health and Hospitals Program.

In something ripped from an episode of Yes, Prime Minister, the audit office found officials within the Department of Health had, in the process of fast-tracking government grants, breached the law and ignored advice that the grants were unconstitutional. Pretty serious stuff for government employees, you’d think. And yet, the department rewarded said officials with “congestion-busting” awards.

The parliamentary committee found the scheme (also set up by the previous government) had been “ineffective” and fell short of “ethical requirements”. It also noted: “In retrospect, the provision of any award for administering a scheme where ultimately public money was paid without any legal authority, in defiance of legal advice, seems to be not just wrong, but a form of trolling that perverts the proper purpose of internal agency awards.”

It’s yet to be seen whether Department of Health and Ageing Secretary Blair Comley follows through on the committee’s recommendation that the congestion-busting award be revoked. That would be one small step towards recognising the stupidity of it all.

But if nothing changes soon, expect to see more highly critical reports from an over-worked audit office.

Shane Wright is a senior economics correspondent.

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