NSW Consultation: Proposed Auditor General powers to conduct performance audit veterinary practices who receive public funding

18 Aug 2022

NSW Treasury are consulting on a proposal to empower the NSW Auditor-General (A-G) to carry out performance audits of the use of public resources (including public monies) by non-public sector entities (NPSEs) to provide goods or services to the public on behalf of the NSW Government and local government. These additional A-G powers are known as ‘Follow the Dollar’ (FTD) powers.

These performance audits may include veterinary practices who receive funding from the Department of Primary Industries or Councils for providing veterinary services in EAD outbreaks, natural disasters, or care of animals in pounds, etc.

NSW Treasury has prepared a position paper, ‘Follow the Dollar’ Reform in New South Wales, and a short Consultation Overview to support consultation on this reform. The consultation paper and consultation overview, is available at NSW Treasury’s web page.

In developing a proposal for FTD powers in NSW, NSW Treasury reviewed the approach of other Australian jurisdictions and identified five key dimensions of FTD powers to consider:

  1. How to determine when the A-G will use their FTD powers,
  2. How the scope / objective of FTD performance audits will be determined,
  3. How the NPSE will be engaged with about determining the scope / objective of a FTD performance audit
    and the findings and recommendations arising from the FTD performance audit, and
  4. What type of funding arrangements will be within scope of FTD powers,
  5. How to protect commercially sensitive information of the NPSEs.

 

The proposed NSW FTD model includes the following features:

  • FTD powers will be primarily exercised as part of, and in association with, the A-G’s powers to undertake performance audits. It is not intended to impose any specific triggers or thresholds for the A-G to employ FTD powers in association with a performance audit.
  • That performance audits using FTD powers will be restricted to determining whether the NPSE (including any ‘downstream’ NPSE engaged by the ‘lead’ NPSE to undertake the work) has applied public resources effectively, efficiently, economically and in compliance with all relevant laws, for the particular purpose for which they were made available to the ‘lead’ NPSE.
  • That existing provisions for formal engagement on the audit scope also include any NPSEs included as auditees in the audit.
  • The types of arrangements that are included in FTD performance audit powers are broad, and include at a minimum outsourcing, public private partnerships, grants, service concession, fee for service, contracting, subsidy/entitlement funding models, and lease arrangements where the lessee has obligations related to the maintenance or safe operation of public assets.
  • The A-G is empowered to inspect the records and interview the staff of the NPSE, as they currently are empowered for performance audits. FTD performance audits are not the same as a financial audit but are an examination and inspection that is likely to include financial information relevant to the FTD audit. Performance audits using FTD powers would be tabled in Parliament, as all performance audits reports are.

Interested AVA Members are encouraged to provide any feedback on the model proposed in consultation paper directly to NSW Treasury via written submissions to legislation@treasury.nsw.gov.au by Wednesday 7 September 2022.