External scrutiny

The department’s operations are subject to scrutiny from a number of external bodies, among them the Australian National Audit Office, the Commonwealth Ombudsman, the Australian Information Commissioner, various parliamentary committees and the courts. This section reports on audits, reviews, inquiries and legal actions relevant to Finance in 2016–17.

Reports by the Australian National Audit Office

In 2016–17, the Australian National Audit Office tabled in parliament 10 reports, covering six performance audits, three financial statement audits and one assurance review involving the department:

• Report No. 3, 2016–17: Machinery of government changes, tabled 31 August 2016
• Report No. 6, 2016–17: Corporate planning in the Australian public sector, tabled 31 August 2016 (completed during 2015–16, with tabling delayed until 2016–17 due to the timing of the 2016 federal election)
• Report No. 7, 2016–17: Interim phase of the audits of the financial statements of major general government sector entities for the year ending 30 June 2016, tabled 31 August 2016
• Report No. 22, 2016–17: Government advertising: March 2013 to June 2015, tabled 19 October 2016
• Report No. 33, 2016–17: Audits of the financial statements of Australian government entities for the period ended 30 June 2016, tabled 23 January 2017
• Report No. 46, 2016–17: Conduct of the OneSKY tender, tabled 10 April 2017
• Report No. 54, 2016–17: Corporate planning in the Australian public sector, tabled 1 June 2017
• Report No. 58, 2016–17: Implementation of the annual performance statements requirements 2015–16 tabled 26 June 2017
• Report No. 60, 2016–17: Interim report on key financial controls of major entities, tabled 28 June 2017
• Report No. 62, 2016–17: Malabar Headland: 2016 lease between the Commonwealth of Australia and the New South Wales Rifle Association, tabled 30 June 2017.

Details of the Auditor-General’s reports, including the department’s response to any audits it was directly involved in, are available on the Australian National Audit Office website.

Reports by the Commonwealth Ombudsman

The Commonwealth Ombudsman did not release any reports during 2016–17 that involved the department or that had, or might have, a significant impact on the department’s operations.

Decisions by the Australian Information Commissioner

There were no decisions by the Australian Information Commissioner during 2016–17 that involved the department or that had, or might have, a significant impact on the department’s operations.

Parliamentary committees

The Senate Standing Committees on Finance and Public Administration

The Senate Standing Committees on Finance and Public Administration covers the Prime Minister and Cabinet and Finance portfolios. Their work is divided between two committees—the Legislation Committee and the References Committee.

The Legislation Committee

• Finance appeared before the Legislation Committee at its Senate Estimates hearings on 18 October 2016, 28 February 2017 and 24–25 May 2017.
• On 5 May 2017 Finance presented a submission to the Inquiry into the Parliamentary Business Resources Bill 2017 [Provisions] and Parliamentary Business Resources (Consequential and Transitional Provisions) Bill 2017 [Provisions].

The References Committee

• On 6 March 2017 Finance presented a submission to the Inquiry into the Operation, Effectiveness and Consequences of the Public Governance, Performance and Accountability (Location of Corporate Commonwealth Entities) Order 2016. It attended the inquiry on 11 April 2017.
• On 14 March 2017 Finance attended the Inquiry into the Operation of the Administrative Arrangements Order.

The Joint Committee of Public Accounts and Audit

The Public Accounts and Audit Committee Act 1951 constitutes the Joint Committee of Public Accounts and Audit. The committee initiates inquiries into public administration matters and can conduct inquiries into matters referred to it by either house of parliament. During 2016–17 Finance had the following engagement with the committee:

• On 11 November 2016 Finance presented a submission to the Commonwealth Performance Framework inquiry based on Auditor-General’s reports 6 (2016–17) and 31 (2015–16). It attended the hearing on 23 November 2016.
• In February 2017 Finance tabled the Australian government response to recommendations 1, 2, 3 and 5 of Report 454: Early Years Quality Fund: Review of Auditor-General’s Report No 23 (2014–15).
• On 16 and 24 February, 30 March and 5 June 2017 Finance presented submissions on Report 457: Development of the Commonwealth Performance Framework—Second Report. It attended the hearing on 26 February 2017.
• On 22 March 2017 Finance attended the hearing of the Commonwealth Financial Statements Inquiry based on Auditor-General’s Report 33 (2016–17).

Other committees

Finance attended hearings or provided submissions to the following other committees during 2016–17:

• the Joint Committee on Publications—inquiry into printing standards for documents presented to parliament (attended 22 June 2017)
• the Joint Standing Committee on Treaties—inquiry into the Trans Pacific Partnership Agreement (attended 7 November 2016); inquiry into the agreement to amend the Singapore–Australia Free Trade Agreement (attended 19 June 2017)
• the Senate Standing Committees on Foreign Affairs, Defence and Trade References Committee—input into the Department of Defence’s management of credit and other transaction cards (attended 7 March 2017)
• the Parliamentary Standing Committee on Public Works—joint written submission with the Department of Immigration and Border Protection about the Villawood Immigration Detention Facility Redevelopment Project (provided 23 November 2016).

Finance’s submissions and the transcripts of committee hearings are available on the Parliament of Australia website www.aph.gov.au.

In addition to attending scheduled hearings, Finance also participated in a number of private briefings with parliamentary committees during the reporting period.

Substantial legal actions

Commonwealth of Australia v Davis Samuel Pty Ltd & Ors

This matter was first reported in Finance’s 2001–02 annual report and has been reported in every annual report since then. The department continues to pursue the funds defrauded by Mr David Muir, which he distributed to a number of parties. All criminal proceedings were completed in 2006.

The civil proceedings, to recover the $8.725 million fraudulently transferred, were commenced in 1999 in the ACT Supreme Court and were heard over nine weeks in 2008. They were complex and involved multiple parties. Final written submissions were provided to the court in March 2009.

On 1 August 2013, Justice Refshauge delivered his decision on liability (Commonwealth of Australia v Davis Samuel Pty Ltd & Ors (No. 7) [2013] ACTSC 146).

The Commonwealth was successful in its claims against 13 defendants. The $4.3 billion counterclaim by certain of those defendants against the Commonwealth was dismissed.

On 21 November 2014, Justice Refshauge delivered his decision on final orders in the civil proceedings. Those orders included judgement against the 13 defendants for amounts between $121,087.92 and $18.63 million, the transfer of certain property to the Commonwealth, and costs orders against the 13 defendants.

Two appeals were made against the final orders. One appeal was settled in November 2015. The remaining appeal was struck out by the ACT Court of Appeal on 30 June 2016 for want of prosecution. The department continues to take steps to enforce the judgement debts and realise various interests conferred on it by the final orders.

Cunningham and Ors v Commonwealth of Australia and Anor

On 21 July 2015 four former parliamentarians filed a writ of summons in the High Court to test the constitutional validity of allowing the Remuneration Tribunal to determine the base salary and office allowances of parliamentarians for the purposes of superannuation. They also sought to test the validity of closing the Life Gold Pass Scheme to new members of parliament and reducing the number of flights for existing members.

On 12 October 2016 the High Court ruled in favour of the Commonwealth and affirmed the validity of the retiring allowance amendments, the determinations, and the enactment of amendments relating to the Life Gold Pass.

Liverpool City Council and Canterbury–Bankstown City Council v Commonwealth of Australia

On 8 February 2017 Liverpool City Council and Canterbury–Bankstown City Council commenced proceedings in the NSW Supreme Court listing the Commonwealth as the defendant in relation to a dispute involving the Voyager Point footbridge.

The project concerned the demolition of an existing footbridge across the Georges River from East Hills to Voyager Point and the design and construction of a new pedestrian footbridge to replace the existing footbridge. On completion, responsibility for the new footbridge was to be transferred to Liverpool City Council and Bankstown City Council.

The councils brought a proceeding against the Commonwealth alleging that the six handover conditions, as contained within a Heads of Agreement dated 11 March 2003 between the Commonwealth and the councils, had not been satisfied and, accordingly, the new footbridge remains the responsibility of the Commonwealth.

The proceeding is being defended and directions have been made for various interlocutory steps.