Public Accounts Committee



About this Item
SpeakersGibson Mr Paul; Turner Mr John
BusinessCommittee, Report, REP



PUBLIC ACCOUNTS COMMITTEE
Page: 26091

Report: Issues Arising from the Premature Release of Draft Auditor-General's Reports

Question—That the House take note of the report—proposed.

Mr PAUL GIBSON (Blacktown) [11.28 a.m.]: I am pleased to speak to the Public Accounts Committee's report entitled "Issues Arising from the Premature Release of Draft Auditor-General's Reports". On 29 May 2010 excerpts from a draft performance audit report of the Auditor-General on the V8 Supercars were published in the Sydney Morning Herald. The leaking of confidential information from government agencies or ministerial offices to the media is problematic and is usually linked to political agendas. The committee was concerned to see a draft report of the Auditor-General leaked in this fashion.

The committee did not conduct an inquiry into the particulars of the leaked report, and does not question the integrity or professionalism of the Auditor-General or his staff. Rather, the committee focused its attention on the adequacy of measures in place to prevent the leaking of draft reports of the Auditor-General in the future, with particular reference to the provisions of the Public Finance and Audit Act. The Auditor-General has statutory, professional and natural justice obligations to distribute and discuss audit reports prior to finalisation and tabling in Parliament. The Audit Office consults with the organisations audited in order to verify the accuracy and completeness of facts presented in its audits, as well as to give departments and agencies an opportunity to prepare responses to recommendations. The agency's response is included as part of the tabled report.

The committee shares the concerns of the Auditor-General that recipients of the draft report into V8 Supercars have breached a confidential process that is undertaken pursuant to the Public Finance and Audit Act. Therefore, the committee supports the Auditor-General in pursuing an amendment to the Act and has recommended that it be an offence for any recipient of a draft report to disclose or reproduce any part of a draft report prior to it being tabled in Parliament. The media is not innocent in this matter. Journalists no doubt will argue that they are acting in the public interest by disclosing information contained in draft reports. However, the premature disclosure by the press undermines the statutory requirements and natural justice principles that ensure agencies subject to an audit are able to check the facts and make a response to the findings and recommendations before the report is released. Accordingly, it is difficult to argue that a premature release of a draft report was in the public interest. Without specifically limiting the freedom of the press, I hope that an amendment to the Act will deter people from leaking information contained in the Auditor-General's draft reports and uphold the Parliament's right to have the Auditor-General report to it before the information is disclosed by the media.

All public sector employees in New South Wales have an administrative responsibility to comply with staff codes of conduct. The Premier's Memorandum 1997-10 Model Code of Conduct for NSW Public Agencies instructs the heads of agencies to implement codes of conduct consistent with the model for protecting confidential information. Accordingly, staff within government agencies that are in receipt of draft audit reports are subject to confidentiality provisions within their respective codes of conduct and are subject to disciplinary measures for breaches of the code. The committee accepts that there are requirements on third parties who receive draft audit reports to ensure that the information contained in those reports remains confidential. However, the committee is concerned that often it is difficult to ascertain the source of leaks of confidential information and, accordingly, it is often difficult to take disciplinary action. The committee considers that the Government has a responsibility to ensure that departments and agencies have in place appropriate controls and processes to ensure the confidentiality of draft reports. Such controls would include having a central point to manage documents, measures to control the transmission of these documents and procedures to store documents.

The committee therefore has recommended that the Government require all public sector departments and agencies to review their current arrangements of storage, management and transmission of confidential documents in their control. Additionally, all departments and agencies should make necessary improvements to their document control systems to ensure complete safeguarding and security of all such documents. This can be achieved through a new Premier's memorandum and the provisions of the Model Code of Conduct for NSW Public Agencies. Unavoidable security risks are associated with the draft audit report process. The committee is of the view that adequate procedures should be in place to ensure that draft reports remain confidential and that specific offences should apply to the disclosure of the information contained in those reports. As always, the committee appreciates the assistance of the Auditor-General and his staff. I also thank my committee members. This important issue could undermine not only the whole fabric of a government, but also the system operated in this Parliament. I am pleased to speak on this important issue.

Mr JOHN TURNER (Myall Lakes) [11.33 a.m.]: I am pleased to inform the House about the Public Accounts Committee's inquiry into issues arising from the premature release of draft Auditor-General's reports. On 29 May 2010, excerpts from a draft performance audit report of the Auditor-General on the V8 Supercars were published in the Sydney Morning Herald. There are statutory, professional and administrative requirements relating to maintaining the secrecy or confidentiality of information arising from audits undertaken. To give effect to these requirements, internal security measures are in place at the New South Wales Audit Office and in public agencies to protect the integrity of information contained in draft reports. However, the committee believes that these measures should be strengthened. Consequently, the committee has recommended that the Government require all public sector departments and agencies to review their current arrangements of storage, management and transmission of confidential documents in their control. Additionally, all departments and agencies should make necessary improvements to their document control systems to ensure complete safeguarding and security of all such documents. This can be achieved through a new Premier's memorandum and the provisions of the Model Code of Conduct for NSW Public Agencies.

The committee also believes that the Auditor-General should consider adopting the practices for distributing draft reports in other jurisdictions, such as Canada, by sending draft reports with an accompanying letter by the Auditor-General that outlines a number of safeguards. While strengthening the safeguards already in place to ensure third parties maintain the confidentiality of draft reports will assist in ensuring draft reports are not disclosed prematurely, the committee believes that more should be done. The committee is concerned that New South Wales is one of only a few Australian jurisdictions that does not have specific statutory provisions that make it an offence for third parties to disclose a copy or summary of a draft Auditor-General's report provided to them in accordance with legislation. The committee agrees with the Auditor-General that the Public Finance and Audit Act should be amended to make it an offence for recipients of draft audit reports to disclose the information contained in them.

Therefore, the committee has recommended that the Act be amended to make it an offence for recipients of draft audit reports to disclose or reproduce any part of the report prior to it being tabled in the Parliament of New South Wales. The committee also considered what action could be taken to deter the media from prematurely releasing information contained in draft reports. Many pieces of legislation across Australian jurisdictions contain secrecy provisions that require persons who have access to that information to ensure that it is kept confidential. However, very few jurisdictions make it an offence for the media to publish any confidential material that is leaked to them, and these tend to be related to the security and defence of the nation. The committee appreciates that the leaking of a draft audit report should not be treated with the same gravity as the leaking of official secrets, but is concerned about the general disregard the media has for confidential material. While the freedom of the press is an important part of any democracy, this freedom should not be used irresponsibly. The committee is of the view that an amendment to the Act that makes it an offence for any person who has been given a copy of the summary or findings of an audit prior to its release to disclose the information will be an important measure in deterring leaked reports. I commend the report to the House.

Question—That the House take note of the report—put and resolved in the affirmative.

Report noted.