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Covering Your Assets

Covering Your Assets

In the wake of recent revelations that more than 600 computers have been lost or stolen from federal Government agencies in the last five years comes a timely warning from Auditor-General Pat Barrett on asset management.

At the same time, the Auditor General has rejected criticism that he has, in his evaluations of Government departmental and agency performance — and particularly in his performance audit on IT outsourcing — occasionally “crossed a line” by questioning government policy.

During Senate Estimates hearings in recent weeks it has been revealed that at least 500 laptops and 134 desktop PCs have disappeared from government agencies since June 1998, although the final tally is likely to be even higher, since a number of agencies are yet to report their losses to the parliamentary committee investigating IT security.

And there have also been embarrassing stories over recent weeks of police and government officials crawling over a rubbish heap looking for sensitive national security information: laptops stolen from staff cars and homes and couriers somehow managing to lose hardware in transit.

So it is timely that Auditor-General has just released an Occasional Paper called An Auditor’s View of Commonwealth Asset, Including Property, Management. Barrett notes the principles of asset management apply equally to all assets including intellectual property and says the critical issue for management is translating these principles into management action. The paper aims to raise publicly the profile of a number of important issues associated with asset, including property, management in the federal government environment.

While mainly focussed on property management, Barrett uses the paper to stress the importance of asset control, noting the view, held by some in the public sector, that: “There are no prizes for managing assets well in the Commonwealth”.

Barrett says asset management is not always given the importance it deserves in an agency’s management responsibilities, and he has used the paper to again highlight the challenge of raising awareness of the importance of asset management within the public sector. He noted the observations of a former Defence colleague that, when the Naval store at Zetland, Sydney closed down, inventory items were discovered that related to ships that had long been retired from service — although not quite back to the first fleet.

And he also cites a damming report from the NSW Auditor-General which revealed that millions of dollars in government real estate had gone missing over the previous 13 years as shoddy government record keeping failed to properly register the property interest of NSW taxpayers.

Meanwhile, Barrett has used the same paper to take exception once again to perceptions that some audits improperly comment on policy, particularly where the implementation performance reflects a problem with the policy itself rather than with its delivery.

“One particular challenge in the current environment is the increasing tension regarding the role of Auditors-General and the boundaries between government policy and its implementation. The issue was given some prominence following the publication of two performance audits my Office undertook in the past two years — property sales and IT Outsourcing.”

Responding to that criticism, Barrett cites comments by Professor Richard Mulgan, writing in the September 2001 Canberra Bulletin of Public Administration.

“The principles of performance auditing allow the Auditor-General to assess whether government policy has been efficiently and effectively implemented but they require him to take government policy as given. Had the Auditor General crossed the line [in these two audits] which bars him from questioning government policy? Certainly the Opposition treated the report as providing ammunition not only against [the Department of] Finance but also against the Minister and government policy. On the other hand, the Auditor General was clearly aware of the potential difficulty and his report takes care to confine the audit to claim that his audit was confined to implementation and administration. Criticism is aimed exclusively at Finance and the substance of its advice to government.”

Professor Mulgan noted that on the whole, public opinion seemed to be on the side of the Auditor-General as he exercised his “time-honoured role as investigator of government inefficiency and guardian of the public purse.” “Pointing out that public funds would be wasted by a particular method chosen for selling governments properties, could hardly be beyond the purview of the public’s financial watchdog,” he said.

In response, Barrett says that it is clearly Ministers (politicians) not public servants who take responsibility for policy. That is why performance audits are restricted to the efficiency, effectiveness and propriety with which policy is implemented, and are not extended to cover the merits of the policy itself.

“That said, the performance audit mandate has become an essential element in the accountability process of any public jurisdiction, especially the new public management environment. It is not a static process and there will be a continuing emphasis on improving the service to Parliament. Conflict and controversy may be inevitable. However, as one senior Australian bureaucrat remarked:

“’The bulk of performance audits are good at working out what is happening in a field, giving a useful report on it and striking an appropriate balance in not dabbling in policy and seriously discussing how implementation is going.’”

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