A special report into the effectiveness of financial arrangements and management practices of four NSW Integrity Agencies by the Auditor-General has found that the current arrangements present threats to the Agencies’ independent status.
The report examines the Independent Commission Against Corruption, the NSW Electoral Commission, the NSW Ombudsman and the Law Enforcement Conduct Commission and also includes NSW Treasury and the Department of Premier and Cabinet (DPC).
In her report, The effectiveness of the financial arrangements and management practices in four integrity agencies, Auditor-General Margaret Crawford said the current approach to determining annual funding for the Integrity Agencies did not sufficiently recognise their roles and functions.
“The approach used by NSW Treasury and DPC is consistent with the legislative and Constitutional framework for financial management in New South Wales, but it does not sufficiently recognise that the roles and functions of the Integrity Agencies that are the focus of this audit, are different to other Departments and Agencies,” Ms Crawford said.
“This system is primarily designed to determine the funding for Departments and Agencies that are responsible to Ministers,” she said.
“It is less appropriate for Integrity Agencies because it does not provide additional protection against the risk that funding decisions could be influenced by previous or planned investigations.”
Ms Crawford said specific mechanisms which presented threats to the independence of the Integrity Agencies included the absence of transparency in decisions about funding; the means of applying efficiency dividends and budget savings and reform measures; the process of providing additional funding from DPC to the Integrity Agencies; and requests for the Integrity Agencies to report to DPC on their activities and outcomes.
“Our audit also assessed the Integrity Agencies’ systems for planning, budgeting and monitoring the efficiency of their work,” she said.
“We did not find major deficiencies in the management practices.”
The Auditor-General made three recommendations aimed at implementing financial management practices which do not diminish the independence of the Integrity Agencies and were still consistent with the requirements of appropriation Acts and other relevant legislation.
Ms Crawford said the audited Agencies should consult closely with the NSW Parliament when considering her recommendations to ensure the views of Parliament were reflected appropriately in any changes.
The Auditor-General’s 100-page report can be accessed at this PS News link.
