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Benchmarking

Benchmarking. Financial scrutiny & oversight Brian Lloyd, House of Representatives. Focus of paper. Parliament’s ability to scrutinise “day-to-day” government expenditure; “Dependencies”. NDI principles #1.

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Benchmarking

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  1. Benchmarking Financial scrutiny & oversight Brian Lloyd, House of Representatives

  2. Focus of paper • Parliament’s ability to scrutinise “day-to-day” government expenditure; • “Dependencies”

  3. NDI principles #1 • NDI 7.4.1 “The legislature shall ensure that public accounts committees provide Opposition parties with a meaningful opportunity to engage in effective oversight of executive branch expenditures.” Source: National Democratic Institute 2007, Toward the Development of International Minimum Standards for the Functioning of Democratic Legislatures, http://www.ndi.org/files/2113_gov_standards_010107.pdf.

  4. NDI principles #2 • 7.4.2 “Public accounts or audit committees shall have access to records of executive branch accounts and related documentation sufficient to be able to meaningfully review the accuracy of executive branch reporting on its revenues and expenditures.” • 7.4.3 “There shall be an independent, non-partisan Supreme or National Audit Office that conducts audits and reports to the legislature in a timely way.” Source: National Democratic Institute 2007, Toward the Development of International Minimum Standards for the Functioning of Democratic Legislatures, http://www.ndi.org/files/2113_gov_standards_010107.pdf.

  5. Scrutiny of expenditure • Elements: • Financial Management and Accounting Act (FMA) / Ministry of Finance • Auditor General • Joint Committee of Public Accounts and Audit (JCPAA)

  6. Control over expenditure • FMA legislation / Ministry of Finance • Appropriation → Expenditure • All expenditure must be by approval of Minister of Finance • And conform to FMA legislation and regulations.

  7. Structures #1 • Auditor General; • Australian National Audit Office (ANAO); and • Joint Committee of Public Accounts and Audit.

  8. Structures #2 • Joint Committee of Public Accounts and Audit: • “The ability to consider and report on any circumstances connected with reports of the Auditor-General or with the financial accounts and statements of Commonwealth … gives the Committee the capacity to initiate its own references and, to a large extent, to determine its own work priorities.” Source: http://www.aph.gov.au/House/committee/jpaa/about.htm

  9. Structures #3 • “This power is unique among parliamentary committees and gives the JCPAA a significant degree of independence from the Executive arm of government.” Source: http://www.aph.gov.au/House/committee/jpaa/about.htm

  10. Structures #4 • JCPAA oversight of: (i) the operations of the Audit Office; (ii) the resources of the Audit Office, including funding, staff and information technology; and (iii) reports of the Independence Auditor on operations of the Audit Office Source: Section 8(1) of the Public Accounts and Audit Committee Act 1951 (PAAC), http://www.aph.gov.au/House/committee/jpaa/about.htm

  11. Scenario #1 • Large fund for regional projects created; • Exists for period of 4 years; • Considerable money expended ($327.9 million); • ANAO finds management of breaches FMA Act; • Finally wound-up with change of government. Source: http://www.anao.gov.au/director/publications/auditreports/2007-2008.cfm?item_id=40BC1C6C1560A6E8AAA43AAB96708E61#4095AFFF1560A6E8AA1C13ABF3E8D511

  12. Scenario #1 cont’d. ANAO found that: • “the manner in which the Programme had been administered … had fallen short of an acceptable standard of public administration” Source: http://www.anao.gov.au/director/publications/auditreports/2007-2008.cfm?item_id=40BC1C6C1560A6E8AAA43AAB96708E61#4095AFFF1560A6E8AA1C13ABF3E8D511

  13. Scenario #2 Charlie Wilson’s War: • Ability of Appropriations Committee of US Congress to fund initiatives; • Serious money to Afghan Mujahideen without broad support in Congress; • Can NDI or similar anticipate such things? Source: Crile, George: Charlie Wilson's war: the extraordinary story of the largest covert operation in history, Atlantic Monthly Press, 2002.

  14. Scenario #3 Collier argues in The Bottom Billion that: • Where governments rely on resource rents rather than tax base, not likely to be held accountable for expenditure; Consequently: • if Public Accounts Committee exists in such an environment, unlikely to be effective. Source: Collier, Paul: The bottom billion : why the poorest countries are failing and what can be done about it, Oxford University Press, 2007.

  15. Implications • Question: Do “added” or “external” elements make nonsense of benchmarking? • Too many variables?

  16. Implications Answer: • Ability of numerical indicators to furnish an aggregate score is a corrective; • Need for continuous, iterative process so that cases can be added to frameworks, encompassing other elements.

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