10 th ASOSAI Research Project

1. 10th ASOSAI Research Project Australian National Audit Office (ANAO) 9-13 December 2012 Dr Thomas Clarke Executive Director Performance Audit Services Group Australian National Audit Office

2. Where do I come from?

3. Australia

4. The role of the Auditor-General in the Australian system of government • Australia’s Auditor-General and the Australian National Audit Office (ANAO) audits the activities of the Australian (national) government • The Australian approach to auditing falls broadly within the Westminster tradition of responsible government (parliamentary democracy) • The Auditor-General is independent and derives his authority from an Act of Parliament.

5. The Westminster model and the separation of powers

6. What does the Auditor-General do? • The law says that the Auditor-General is to conduct • annual financial statement audits of Australian government agency accounts (focus on assurance) and • performance audits ( focus on improving public administration (management)) • ANAO is small – around 300 staff (about 110 performance auditors, 150 financial statements auditors, and 40 corporate support staff) • Performance audit reports are made public and may make recommendations for improvements in administration. • Around 50-55 performance audits conducted annually

7. What does the ANAO do to audit the risk of fraud/corruption/money laundering? • Very little! That is why I am here – to learn. • We do not observe much in the way of fraud/money laundering within the agencies we audit • the risk of non-financial corruption is higher, and we have observed it. • BUT • Australia has a large overseas aid program that delivers aid in countries with different perceptions (and probably higher levels) of fraud/corruption/money laundering risk. • This is a key audit risk for our performance audit program

8. Closing reflections • Key questions: • What is the real level of fraud/corruption/money laundering risk in the agencies we audit? • Are we not finding much fraud/money laundering because it is not very common, or because we are not looking for it? • Would our staff recognisefraud/money laundering if they saw it? • What techniques could they apply to assess whether agencies are managing these risks effectively? • Thank you for the opportunity to listen and learn from my ASOSAI colleagues!

9. Further information • Web: www.anao.gov.au • Address: GPO Box 707, Canberra ACT 2601 Australia • Email: tom.clarke@anao.gov.au • Tel: 61 (0)2 6203 7436