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Appendix 6 : Internal and External Scrutiny

Internal Audit

Since 1997, the bulk of internal audits and related services has been undertaken by external consultants in accordance with an approved Annual Work Plan.

The 1998-99 Annual Work Plan covered all areas of the Department. Eleven major reviews were completed during 1998-99, and a further three expected to be finalised in late August 1999. The reviews confirmed that compliance with legislative requirements was generally satisfactory. Remedial action is being taken to address identified deficiencies.

Previous internal audits had included a review of Year 2000 compliance. In 1998-99 Internal Audit developed a draft Continuity Management Plan for all divisions in the Department in accordance with guidelines from Emergency Management Australia, which incorporates Year 2000 issues. The Plan, expected to be finalised by 31 August 1999, will be accessible to staff on the Department's Intranet.

Following a review for Year 2000 compliance of the two computer systems used exclusively within Internal Audit, one was retired and data from the second transferred into a Year 2000-compliant format.

External Audit

The following table lists the Audit Reports tabled during 1998-99 in Parliament by the Australian National Audit Office (ANAO) and which referred to operations of the Department.

Australian National Audit Office reports

Title Audit
Report No.
Date Tabled
Commonwealth Agencies' Security Preparations for the Sydney 2000 Olympic Games 5 24 August 1998
Aviation Security in Australia 16 23 November 1998
Sale of SA Rail, Tasrail and Pax Rail 28 21 December 1998
The Management of Performance Information for Specific Purpose Payments 31 18 February 1999
Phase 2 Sale of the Federal Airports 48 21 June 1999
Staff Reductions in the Australian Public Service 49 29 June 1999

In 1998-99, progress in implementing the recommendations of the Audit Reports was included in biannual reports by the Minister for Finance and Administration to the Joint Committee of Public Accounts and Audit. The Department, in consultation with ANAO, is developing revised processes for reporting future progress direct to the Portfolio Minister and that Joint Committee.

The Department also provided data to the ANAO in relation to the second year of a three-year Global Auditing Information Network Benchmarking Study.

Fraud Control

The Department continued to operate under the Fraud Risk Assessment and Fraud Control Plan previously assessed by the Commonwealth Law Enforcement Board as meeting Commonwealth requirements.

A consultant was engaged to help the Department review its Fraud Control Risk Assessment and Fraud Control Plan and its Fraud Control Policy and Guidelines. The review is expected to be completed by December 1999.

During the year Internal Audit undertook a series of presentations to new staff on fraud control policy and procedures. All new staff are provided with a brochure indicating their rights and responsibilities in relation to Fraud Control. This information is also available on the Department's Intranet.

Inquiries by Parliamentary Committees

During 1998-99 the Department provided submissions to:

  • the House of Representatives Standing Committee on Foreign Affairs, Defence and Trade, Subcommittee on Trade - Inquiry into the trading relationship between Australia and South America;
  • the Joint Committee of Public Accounts and Audit examining the Auditor-General's Audit Report No.16, 1998-99, Aviation Security in Australia;
  • the House of Representatives Standing Committee on Primary Industries and Regional Services - Inquiry into Infrastructure and the Development of Australia's Regional Areas ; and
  • the Joint Standing Committee on Foreign Affairs, Defence and Trade -Report on the loss of the HMAS Sydney.

Reports tabled by Parliamentary Committees on matters related to the Department were:

  • House of Representatives Standing Committee on Communications, Transport and Microeconomic Reform, Tracking Australia - an Inquiry into the Role of Rail in the National Transport Network (tabled August 1998);
  • House of Representatives Standing Committee on Communications, Transport and Microeconomic Reform, Inquiry into the Australian Maritime Safety Authority 1996-97 Annual Report - Ship Safe (tabled August 1998);
  • Joint Standing Committee on the National Capital and External Territories Island to Islands : Communications with Australia's External Territories (tabled March 1999);
  • House of Representatives Standing Committee on Economics, Finance and Public Administration Inquiry into Regional Banking Services - Money Too Far Away (tabled March 1999).

Comments by the Ombudsman

In 1998-99, the Department received no complaints under the Privacy Act 1988. The Ombudsman received 19 complaints (11 oral and eight written) about departmental actions. Of the 22 issues finalised during the year (including three from the previous year), the Ombudsman's Office exercised its discretion not to intervene in 10, and found there was an arguable agency defect in eight, no apparent agency defect in two, one to be indeterminate, and one withdrawn or lapsed. There were no formal reports to the Minister under the provisions of the Ombudsman Act 1976.

Decisions by courts and administrative tribunals

During the last financial year, the Department handled the following four significant legal actions.

  • The Full Federal Court heard an appeal against a decision of the Federal Court in relation to an application by three New South Wales councils for a review of decisions by the Minister for Transport and Regional Development and the Minister for the Environment relating to the implementation of the Long Term Operating Plan for Sydney (Kingsford Smith) Airport.
  • Relatives of people who died in the Seaview aircraft accident off the coast of New South Wales claimed that the Commonwealth was liable for the acts and omissions of the Department of Transport and the Civil Aviation Safety Authority. The proceedings were dismissed by consent after a mediated settlement was reached.
  • The Commonwealth lodged an appeal in the Supreme Court of Western Australia against the decision in the action for specific performance or damages arising from an agreement for the sale and purchase of a supermarket and restaurant on Christmas Island. The hearing commenced on 8 October 1998 but was adjourned to consider a preliminary objection by the Respondents to the notice of appeal.
  • Ex-residents of Christmas Island brought an application in the Supreme Court of Western Australia for compensation and alleged breaches of fiduciary duty in relation to employment and amenities on Christmas Island and the administration of resettlement schemes. The Commonwealth applied to have the application struck out. The hearing was held on 16 February 1999. The court refused to allow the strike-out action and permitted the plaintiffs to amend their statement of claim.

Inquiries on these actions should be made to:

Assistant Secretary
Legal and Coordination
Department of Transport and Regional Services
GPO Box 594

Tel: (02) 6274 7611
Fax: (02) 6274 6803
Email: Anna.Clendinning@DOTARS.gov.au