Transparency and innovation key to evolution of government business - AG

Reports from the Australian National Audit Office can send a shiver through a Government department, make or break political careers or shine the spotlight on failures many would prefer remain hidden, but Australia's Auditor-General Ian McPhee believes his office is not a killjoy.

"The Australian National Audit Office (ANAO) is conscious that some may see our role as encouraging risk averse behaviours and we would like to put this canard to rest," he told the audience at Deakin University's annual Brookes Oration.

"We understand that, at some point, bureaucracy and formal systems can stifle innovation and motivation.

"Management and auditors alike need to recognise those who encourage continuous improvement and try new approaches. Our simple message is that innovation in the public sector is to be encouraged, and supported by prudent risk management and good information."

Mr McPhee said the Australian Government public sector and government itself had evolved more than many would appreciate over the past 20 years.

"The traditional approach to policy development of individual departments breaking issues down is no longer seen as the way to tackle the big policy issues of today," he said.

"There seems to be universal acceptance that the Commonwealth needs to work more effectively with the States to reduce the cost of government services and raise the performance of programs."

Mr McPhee said it was important that the public sector had the right people in the job.

"There is no question that if a priority task or project has to be done under time pressure, it is critical to have the right people and sufficient of them to deliver the goods – having sufficient 'horsepower' is a critical success factor," he said.

"The longer I observe public sector management, the more important I see the public sector and agencies articulating and underlining organisational values to establish and reinforce the acceptance of norms by which staff should operate.

"Most influential here, is the 'tone at the top' of any organisation.

"It is actually more helpful than might be imagined if Ministers and Chief Executives inform public sector agencies of the importance to them of the behaviour they value, whether it is assessing the scope for the better targeting of policies, or close oversight of critical projects – a few well-placed words provide substantial returns."

Mr McPhee said public servants could do better – even though the Australian model of public sector administration was highly regarded internationally.

"Our audit work shows that while policy development has been quite robust, when it comes to implementation there is room for improvement, and in some cases, marked improvement," he said.

Mr McPhee offered five tips for improvement "based on past disappointment with performance".

Agencies should focus on sound governance regimes; understanding agency strengths and weaknesses and how to compensate for any weaknesses, the importance of planning a project and factoring in risk management, having stakeholders and users on board, and making accountability for performance a reality.

"This is the Achilles heel of public sector management and deserves close consideration in any significant new initiative, project or, more broadly, for program delivery," he said.

Mr McPhee said it was vital the trend of transparency and accountability in government continued.

"In an era where government is powerful and has command of a very substantial level of resources relative to those of the Parliament, the focus on greater transparency around government decision-making and performance must be encouraged.

"With some very big challenges still ahead of us, public sector management must continue to evolve to ensure Australia does even better in the world in the years ahead, and that public confidence is maintained in the use of authority and public resources."