The role of the Auditor-General

Functions and powers

The main functions and powers of the Auditor-General are set out in the Auditor-General Act 1996. The Act provides the Auditor-General with a broad mandate to do anything that is incidental or conducive to carrying out the functions of the Auditor-General, including:

  • to promote public accountability in the public administration of the Territory;
  • to audit annual financial statements of the Territory, departments and Territory authorities under the Financial Management Act 1996; and
  • to conduct performance audits.

This role is fulfilled by reporting the results of financial and performance audits to the ACT Legislative Assembly to keep Assembly members informed on the accountability and performance of the ACT public sector.

The Auditor-General also has responsibilities under the Public Interest Disclosure Act 2012, the Government Procurement Act 2001 and the Territory-Owned Corporations Act 1990.

The Office also provides advice and recommendations for improving the management of ACT public sector resources.

The Office has an annual operating budget of approximately $4.6 million and employs around 30 staff. It receives funding through appropriation (mainly for performance audits) and through fees for financial audits paid by departments, authorities, and other auditees.

The Auditor-General is not subject to direction by the Executive or any Minister in the exercise of the functions of the Auditor-General.

Serving the community

The ACT Legislative Assembly and the ACT community rely on the Office to provide independent assurance on whether public money is being efficiently and effectively spent and whether financial and performance reports for the Territory and its agencies present a credible, true and fair view of their performance.

In order to fulfil its responsibilities to the ACT community, the Office conducts two types of audits: financial audits and performance audits.

Financial Audits

The Office provides independent audit reports on the agencies' financial reports, and hence assurance to the ACT Legislative Assembly and the ACT community on the reliability of the financial and performance information reported by government agencies. Audit reports are provided on the financial reports and statements of performance of the Territory and all ACT Government controlled agencies.

The objective of a financial audit is to enable the Auditor-General to express an opinion on whether the financial reports of the Territory and its agencies are presented fairly and in accordance with the relevant legislation, Australian Accounting Standards and other mandatory financial reporting requirements.

Financial audits are conducted in accordance with the Australian Auditing Standards to provide reasonable assurance that the financial reports are free of material misstatement.

Audit procedures include examining, on a test basis, evidence supporting the amounts and other disclosures in the financial statements; and evaluating accounting policies and significant accounting estimates used in the preparation of the financial reports.

The effectiveness of internal controls is considered when determining the nature and extent of the audit procedures undertaken.

The Office also assists agencies to improve the quality of their financial reports by alerting agencies to errors in their financial reports, providing advice on compliance with accounting standards, and recommending improvements to the disclosures in these reports prior to their publication.

As part of the financial audit process, the Office brings concerns identified during the audit to the attention of senior management, such as internal control weaknesses and poor financial management procedures and practices. The concerns and the associated recommendations that are reported to agency management are not publicly reported unless the matter is assessed to be serious or systemic as to warrant public reporting.

Agencies have accepted the majority of the audit recommendations to date. This provides a good indication of the ability of the Office to improve public sector financial management and reporting processes by providing sound advice and practical recommendations to the agency.

Performance Audits

Performance auditing is a review and evaluation methodology that looks at the organisational and program elements of government performance and considers whether public sector managers are:

  • making the best use of public funds; and
  • adequately accounting for the prudent and effective management of the resources entrusted to them.

Performance audits provide independent assurance to the Assembly and the public that Territory monies are being spent efficiently and effectively, and in accordance with the law.

Performance audits also assist the accountability process by holding Territory entities responsible for their performance.

The objective of a performance audit is to enable the Auditor-General to express an opinion on whether, in all material respects, all or part of a Territory entity's activities have been carried out efficiently and effectively, and in compliance with relevant legislation, regulations or directions.

Performance audits can examine any aspect of government operations, including the resource use of government agencies, information systems, performance outputs and outcomes, monitoring systems, legal and administrative compliance, and whether government receives value for money.

Where appropriate, performance audits make recommendations for improvements relating to these activities.

For more information on performance audits, refer to the links below.

Strategic outcomes

The Office's Strategic Plan 2008-11 was finalised in May 2008, following consultation with key stakeholders, including members of the Public Accounts Committee, Chief Executives of key agencies and staff of the Office. The Strategic Plan is reviewed annually.

The Strategic Plan identifies the two main strategic outcomes for the Office:

  • an accountable, effective and efficient ACT public sector; and
  • a highly valued ACT Audit Office.

The Strategic Plan also identifies a number of strategic objectives that are required to be met in order for the Office to achieve its desired outcomes, including:

  • to inform the ACT Legislative Assembly and the community of the performance of the ACT public sector; and
  • to contribute to improving the performance of ACT public sector agencies.

For more information on the Office's strategic outcomes, refer to the links below.