25 September 2023

Finance audit not on the money

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The Minister for Finance has defended his Department’s estimate of the savings from a crackdown on Australian Public Service office rental space in Canberra following an audit that found the methodology it used was “not robust’.

The Minister, Senator Mathias Cormann said he welcomed the Australian National Audit Office’s (ANAO) audit which acknowledged Operation Tetris had been effective.

“The Government estimated that Operation Tetris would save taxpayers around $300 million over 10 years,” Senator Cormann said.

“This estimate was based on the space required by each entity (square meters of net lettable area), an average cost per square meter ($460), and an average lease length (10 years),” he said.

“During the audit, the ANAO analysed five sub-leasing agreements, or Memoranda of Understanding (MoU), to consider savings realised by Operation Tetris. Using information from this sample of five MoUs, the ANAO estimated that the savings realised by Operation Tetris were less than initially estimated by the Department of Finance.”

He said his Department had retested the savings from all 17 Operation Tetris moves using actual data from MoUs, leasing documents, and the Australian Government Property Register, and had confirmed its estimation of savings.

“Using the ANAO’s methodology total, estimated savings were even higher at around $322 million,” Senator Cormann said.

In his report, Management of Commonwealth Leased Office Property, Auditor-General, Grant Hehir found that while the Department had reduced surplus office space, established coordinated procurement arrangements for property services, improved the collection of property data and realised efficiencies, “the reported $300 million in savings to entities was not supported by a sound methodology.”

The PS News report of the Audit Office’s findings last week can be accessed at this PS News link.

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