25 September 2023

Audit critical of infrastructure decisions

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The audit of a $5 billion funding facility for infrastructure in Northern Australia has found its governance and integrity wanting.

In his audit report, Governance and Integrity of the Northern Australia Infrastructure Facility, Auditor-General, Grant Hehir, said the arrangements to support the integrity of decision-making within the Northern Australia Infrastructure Facility (NAIF) “were not fully effective”.

Mr Hehir said the objective of the NAIF was to provide grants of financial assistance to the States and Territories for the construction of Northern Australian economic infrastructure.

He said the NAIF Act provided for $5 billion to be appropriated for this purpose, with the NAIF Board having until 30 June 2021 to make decisions to provide financial assistance.

“While NAIF has established appropriate governance and policy frameworks, decision support processes were not sufficiently transparent or evidenced to demonstrate projects have been treated in a consistent manner,” Mr Hehir said.

He said the NAIF Board had adopted a flexible approach to strategy, but only a small number of projects were assessed as addressing an identified infrastructure need.

“Remuneration policies and practices were not consistent with public sector governance standards, and information governance requires attention to meet National Archives standards and improve transparency,” Mr Hehir said.

“Arrangements for engaging with stakeholders were generally effective (but) arrangements for ensuring the integrity of decision support processes were not effective, with insufficient evidence that all applicants were evaluated in a consistent manner.”

He said the Board placed reliance on the Chief Executive to present projects for consideration, and had not made any investment decisions to refuse financial assistance for the applications presented.

The audit made six recommendations, including that NAIF develop an information governance framework, electronic data and records management system, and appropriate records disposal authorities in line with National Archives of Australia requirements.

It also recommended it cease the use of all non-official email accounts and servers to conduct official business.

Five of the recommendations were agreed and one was agreed in principle.

The Auditor-General’s 67-page report can be accessed at this PS News link and the audit team was Christopher Swain, Chirag Pathak, Anne Kent and Paul Bryant.

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