Estimates Vote

Auditor-General's Department, $18,018,000

Legislative Council, $5,585,000

House of Assembly, $7,790,000

Joint Parliamentary Services, $12,823,000

Administered Items for Joint Parliamentary Services, $2,809,000

State Governor's Establishment, $4,152,000

Membership:

Mr Murray substituted for Ms Luethen.

Minister:

Hon. S.S. Marshall, Premier.

Departmental Advisers:

Mr A. Richardson, Auditor-General, Auditor-General's Department.

Mr I. McGlen, Deputy Auditor-General, Auditor-General's Department.

Ms J. Blanche, Manager, Corporate Strategy, Auditor-General's Department.

Mr R. Crump, Clerk, House of Assembly and Secretary, Joint Parliamentary Services.

The CHAIR: As the duly elected Chairman of Estimates Committee A, I welcome you all to the first sitting of the committee. The committee is a relatively informal procedure and, as such, there will be no need to stand to ask or answer questions. I understand that the Premier and the Leader of the Opposition have agreed to an approximate time for the consideration of proposed payments, which will facilitate a change of departmental advisers. Can the Premier and the Leader of the Opposition confirm that the timetable for today's proceedings, as previously distributed, is accurate?

The Hon. S.S. MARSHALL: Yes, sir.

Mr MALINAUSKAS: Yes.

The CHAIR: Changes to committee membership will be notified as they occur. Members should ensure that the Chair is provided with a completed request to be discharged form. If the Premier undertakes to supply information at a later date, it must be submitted to the Clerk Assistant via the answers to questions mailbox no later than Friday 5 September 2019.

I propose to allow the Premier and the Leader of the Opposition to make opening statements of about 10 minutes each should they wish. There will be a flexible approach to giving the call to ask questions based on about three questions per member, alternating each side. Supplementary questions will be the exception rather than the rule.

A member not on the committee may ask a question at the discretion of the Chair. Questions must be based on lines of expenditure in the budget papers and must be identifiable or referenced. Members unable to complete their questions during proceedings may submit them as questions on notice for inclusion in the assembly Notice Paper.

There is no formal facility for the tabling of documents before the committee; however, documents can be supplied to the Chair for distribution to the committee. The incorporation of material in Hansard is permitted on the same basis as applies in the house, that is, that it is purely statistical and limited to one page in length.

All questions are to be directed to the Premier, not the Premier's advisers. The Premier may refer questions to advisers for a response. The committee's examinations will be broadcast in the same manner as sittings of the house are broadcast, that is, through the IPTV system within Parliament House via the webstream link to the internet and the Parliament of South Australia video-on-demand broadcast system.

I now proceed to open the following lines for examination: the portfolio is the Department of the Premier and Cabinet, the minister appearing is the Premier. I declare the proposed payments open for examination and call on the Premier to make a statement if he wishes and introduce his advisers.

The Hon. S.S. MARSHALL: I will not be making an introductory statement, but I would like to take this opportunity to introduce the people who are sitting with me today. To my immediate right, your left, I have Andrew Richardson, the state's Auditor-General. To my left, I have Ian McGlen, who is the Deputy Auditor-General. Behind me sits Julie Blanche, who is the Manager, Corporate Strategy from the Auditor-General's Department, and, of course, Rick Crump from Parliament House.

The CHAIR: Thank you, Premier. The Leader of the Opposition has the call. You may wish to make a statement or begin your questions.

Mr MALINAUSKAS: Thank you. I do not seek to make a statement. I would rather just hop straight into questions. We thank the Premier, the Auditor-General, his deputy and staff for being with us this morning. Premier, does the office of the Auditor-General monitor the requirements for proactive disclosure by relevant agencies and also ministerial offices?

The CHAIR: Before the Premier takes that question, leader, you have jumped to the Auditor-General's—

Mr MALINAUSKAS: Yes.

The CHAIR: —which we have not opened as yet. I have opened the Legislative Council, House of Assembly, Joint Parliamentary Service Committee and Administered Items.

Mr MALINAUSKAS: My apologies, Mr Chairman. We have no questions in that area. I understand that we did advise the relevant officers that we were not going to be asking questions of those respective groups.

The CHAIR: My apologies; I did not have that information. Are there any questions from the government side before we close that?

Mr TEAGUE: No.

The CHAIR: If not, there are no further questions, I declare the examination of the proposed payments for the Legislative Council, the House of Assembly, the Joint Parliamentary Service Committee and Administered Items for Joint Parliamentary Services to be completed. The next portfolio and estimate of payments appearing on my schedule is the State Governor's Establishment of $4,152,000. Do you have any questions on this area?

Mr MALINAUSKAS: No.

The CHAIR: If not, any questions from the government side?

Mr TEAGUE: No.

The CHAIR: There being no further questions, I declare the examination of the proposed payments for the State Governor's Establishment to be completed. We are working our way through and come to the Auditor-General's Department. The estimate of payments to the Auditor-General's Department is to the value of $18,018,000. I declare the proposed payments open for examination. Premier, I am not sure if you have the same advisers, but once again I invite you to make a statement and introduce advisers.

The Hon. S.S. MARSHALL: They are precisely the same as we introduced before, less Rick Crump.

The CHAIR: Leader of the Opposition.

Mr MALINAUSKAS: Premier, in regard to the Auditor-General, Budget Paper 4, Volume 1, pages 68 to 76, does the Auditor-General monitor requirements for proactive disclosure for agencies and also ministerial offices?

The Hon. S.S. MARSHALL: I am advised that he does not do that work.

Mr MALINAUSKAS: So that I understand, and for the sake of clarity, does the Auditor-General in no way, shape or form have any regard to proactive disclosure requirements or compliance?

The Hon. S.S. MARSHALL: I am advised that the Auditor-General has not looked at that, but he could look at that if he found it of interest.

Mr MALINAUSKAS: Has the Auditor-General ever had reason to look at compliance with proactive disclosure?

The Hon. S.S. MARSHALL: I am advised that to date he has had no interest in this issue, but he has the ability to do so if he does develop an interest in this area—but to date, no

Mr MALINAUSKAS: On the same budget reference, Premier, there was a discussion last year in regard to the Auditor-General looking at the resolution of any confusion that may or may not exist regarding the powers of the Independent Commissioner Against Corruption and the Auditor-General. The Auditor-General told this committee last year: 'I do not think there are going to be any issues about misinterpreting our respective roles.' Mr Richardson went on to state:

We do, naturally, have overlaps, so it is important that we have a process where we can delineate what the situation might be for our respective mandates.

Has that process of interpretation been developed or proceeded with as anticipated?

The Hon. S.S. MARSHALL: There is no change. I am advised that there has been no change since last year.

Mr MALINAUSKAS: Is there now a process consistent with what Mr Richardson told the committee last year about a potential overlap between his respective roles, responsibilities and powers and those of the ICAC?

The Hon. S.S. MARSHALL: I am advised that there has been no development of any formalised guidelines to clarify the potential overlap since the report was made to this committee last year, but there are plenty of instances where there have been informal discussions to clarify situations. However, the Auditor-General does not believe that this is an issue of concern.

Mr MALINAUSKAS: Has the Auditor-General changed his opinion since last year? It would be a perfectly legitimate thing to occur. In light of the fact that last year the Auditor-General stated that he thought it was important that we have a process to delineate the two, has the Auditor-General, in light of the experience over the last 12 months, formed the view that it is no longer important to have a process for that delineation?

The Hon. S.S. MARSHALL: The Auditor-General informs me that he has provided information to the Crime and Public Integrity Policy Committee regarding this issue. He does not believe that there is a requirement for a formalisation, and he is satisfied with the current informal processes.

Mr MALINAUSKAS: On the same budget line, but more specifically on pages 67 and 68, sub-program 1.1, which is described as audits, and sub-program 1.2, titled Special Investigations, does this allocation of resources reflect any reviews of specific issues that were conducted in the 2018-19 financial year?

The Hon. S.S. MARSHALL: I am informed that that is the Coober Pedy investigation. The reason for there not being a budget going forward is that there has been no referral from the government, the parliament or the Treasurer to the Auditor-General for any special investigation over and above the normal audit process that he conducts.

Mr MALINAUSKAS: What criteria does the Auditor-General use when contemplating the special projects or special investigations that require additional review?

The Hon. S.S. MARSHALL: It is the referral process that I just outlined.

Mr MALINAUSKAS: Are there any additional investigations or reviews currently being conducted by the Auditor-General?

The Hon. S.S. MARSHALL: Not special investigations, but obviously the primary responsibility of the Auditor-General is to conduct audits, and that is within the existing scope and the existing budget. From time to time there will be a special referral or a special investigation that is the subject of a referral, but there is nothing envisaged at the moment, and that is reflected in the budget that is presented.

Mr MALINAUSKAS: But is the Auditor-General currently conducting any specific reviews of state government expenditure beyond the ordinary process?

The Hon. S.S. MARSHALL: Not that I am aware of. I am informed by the Auditor-General that, although it is not a specific special investigation, there are some performance reviews that he is currently undertaking.

Mr MALINAUSKAS: Into whom?

The Hon. S.S. MARSHALL: I am advised by the Auditor-General that the performance audits are work that the Auditor-General's office has been doing now for some years. The current audits in progress include a performance audit into Country Health SA hospital sites maintenance, the Darlington Upgrade and Flinders Link projects, the use of credit cards in local government, and a performance audit has just begun into the Building Better Schools program.

Mr MALINAUSKAS: Is the Auditor-General currently examining the use of government or ministerial credit cards?

The Hon. S.S. MARSHALL: Sorry, what was that?

Mr MALINAUSKAS: Does the Auditor-General intend or is the Auditor-General—does, is, has—intending to examine the use of government credit cards or ministerial credit cards as distinct from local government?

The Hon. S.S. MARSHALL: There is nothing specific envisaged there, but of course the Auditor-General's responsibilities and scope include that in the normal course of his activities.

Mr MALINAUSKAS: Does the Auditor-General ever examine or compare his analysis of government credit cards with what is publicly disclosed under the proactive disclosure arrangement?

The Hon. S.S. MARSHALL: No specific investigation has been made.

Mr MALINAUSKAS: Sure, but that was not the question. Does the Auditor-General ever refer to the proactive disclosures that are made under the relevant Premier's circular in relation to his examination of government credit cards?

The Hon. S.S. MARSHALL: I refer to my previous answer.

Mr MALINAUSKAS: Has the Auditor-General ever looked at proactive disclosures that are made?

The Hon. S.S. MARSHALL: I am advised no.

Mr MALINAUSKAS: Is the Auditor-General's agency subject to the across-government requirement of operating efficiencies? If so, what will the impact be—

The Hon. S.S. MARSHALL: Could you start that question again?

Mr MALINAUSKAS: Certainly. Is the Auditor-General's agency or office subject to the across-government requirement regarding operating efficiencies?

The Hon. S.S. MARSHALL: I am advised that there has not been a budget savings task requirement requested of the Auditor-General's Department.

Mr MALINAUSKAS: Has there been any impact on the Auditor-General's budget through savings measures or indeed has there been the requisite growth in the Auditor-General's budget line that he feels necessary to be able to do his job?

The Hon. S.S. MARSHALL: I think the budget actually shows an increase in the budget allocated to the office of the Auditor-General.

Mr MALINAUSKAS: Sure, but does the Auditor-General believe that that is sufficient for him to be able to perform his functions?

The Hon. S.S. MARSHALL: That is the budget that is presented.

Mr MALINAUSKAS: But I am asking—

The CHAIR: Leader, excuse me, can you just confirm you are still on the same budget line when asking questions?

Mr MALINAUSKAS: Yes.

The CHAIR: I might just ask the Premier to speak up a little bit or bring your microphone a little bit closer, please.

The Hon. S.S. MARSHALL: The problem is that the microphone is on the entire time, so sometimes when I am discussing, it is actually amplifying around the room.

The CHAIR: Yes, but we need to hear your answers, Premier.

The Hon. S.S. MARSHALL: Absolutely; I will be more audible.

The CHAIR: Leader, could you repeat the question please on the same budget line, which is page 68, I think?

Mr MALINAUSKAS: The Premier responded by saying that is the budget. I am conscious of that, but does the Auditor-General believe that the budget line is sufficient for him to be able to perform his functions, in his view?

The Hon. S.S. MARSHALL: I refer you to my previous answer.

Mr MALINAUSKAS: What was that again because I could not hear you either?

The Hon. S.S. MARSHALL: That is the budget that is provided. This is not a committee to ask personal opinions. The budget is an increase to the Auditor-General's Department, as provided by the previous government.

Mr MALINAUSKAS: Has the Auditor-General made any representations to you regarding the budget allocation?

The Hon. S.S. MARSHALL: Not to me, no.

Mr MALINAUSKAS: What procurements have attracted the attention of the Auditor-General during the course of the last financial year?

The Hon. S.S. MARSHALL: The Auditor-General informs me that a huge number of audits are conducted over the course of a 12-month process and all those details will be contained within the Auditor-General's annual report, which will be handed down in October.

Mr MALINAUSKAS: I will be more specific then for the benefit of you and the Auditor-General: was the travel services contract awarded to QBT examined or analysed by the Auditor-General?

The Hon. S.S. MARSHALL: I am advised no.

Mr MALINAUSKAS: And the KordaMentha contract awarded by SA Health via what I understand to be a direct approach?

The Hon. S.S. MARSHALL: I am not sure what the value is of going through a whole list of things. The Auditor-General hands down his report in October. There are hundreds of individual audits that are conducted—probably thousands—over the course of a 12-month period.

Mr MALINAUSKAS: I am aware of that. I am just asking about—

The Hon. S.S. MARSHALL: The normal course is for those to be not pre-empted but reported in the annual report, which is handed to the parliament in October.

Mr MALINAUSKAS: Sure, but I am asking now: was the KordaMentha report—

The Hon. S.S. MARSHALL: I am just telling you now that the normal course in this parliament is for all of that detail to be tabled in this parliament and published in the October annual report.

Mr MALINAUSKAS: So are you willing to answer that question?

The Hon. S.S. MARSHALL: I do not know. You were going to list off a whole number—

Mr MALINAUSKAS: No, just two.

The Hon. S.S. MARSHALL: Sorry, for QBT, we have said that there was no specific audit.

Mr MALINAUSKAS: And in regard to KordaMentha?

The Hon. S.S. MARSHALL: I am advised that, yes, the contract with KordaMentha is something that the Auditor-General is looking at.

Mr MALINAUSKAS: Looking at or has looked at?

The Hon. S.S. MARSHALL: It is still in progress.

Mr MALINAUSKAS: Excellent; that is good. How does the Auditor-General fund the audits of government agencies? Is there a specific levy or charge that is applied to agencies in order to recover the cost of an audit.

The Hon. S.S. MARSHALL: There is a charge that is made to individual departments, so that money comes into the Auditor-General's Department. You will see that on the income line, which is on page 69.

Mr MALINAUSKAS: My last question is regarding the Auditor-General's component of this timeslot. How does the Auditor-General go about selecting which agencies they will prioritise for audit and which agency might be subject to a far more extensive examination versus others? I am just trying to understand how those decisions are made or what criteria are applied to exercise that judgement.

The Hon. S.S. MARSHALL: The Auditor-General informs me that he uses a risk-based methodology for determining what areas he concentrates on. It is ostensibly the same methodology that has been used by the Auditor-General's Department for an extended period of time. There will be some routine audits and other audits that are specific to areas that may have attracted his interest.

Mr MALINAUSKAS: The new approach for the approval of government advertising is that it is now approved by a new committee made up of political appointments and the Treasurer, as distinct from the previous PCAG committee, which was made up of independent public servants. Is the Auditor-General satisfied that this change is appropriate and that the current system for approving government advertising is appropriate?

The Hon. S.S. MARSHALL: I am informed by the Auditor-General that he has not looked at that issue.

Mr MALINAUSKAS: And determined what?

The Hon. S.S. MARSHALL: He has not looked at that issue.

Mr MALINAUSKAS: Does the Auditor-General have an opinion about those changes, in terms of the approval of government advertising?

The Hon. S.S. MARSHALL: This is not a forum for determining people's personal opinions.

Mr MALINAUSKAS: I am interested. This is a forum for me to ask questions, and I am asking one. Does the Auditor-General have a view about that?

The Hon. S.S. MARSHALL: The Auditor-General has not done an investigation. The Auditor-General might look at it in the future, and if he does, then that will be published.

Mr MALINAUSKAS: Has the Auditor-General expressed a view about the appropriateness of the new arrangement regarding the approval of government advertising?

The Hon. S.S. MARSHALL: Sorry, what was that again?

Mr MALINAUSKAS: Has the Auditor-General expressed an opinion or a view about the appropriateness of government advertising being approved by, essentially, political appointees.

The Hon. S.S. MARSHALL: First of all, I do not accept the premise of your question and the assertion that you are making. Let's be quite clear: the PCAG did have political staffers on it as well, which is completely different from what you have just informed this committee. Secondly, I have already answered the—

Mr MALINAUSKAS: I said 'a majority'.

The Hon. S.S. MARSHALL: Sorry?

Mr MALINAUSKAS: I used the term 'a majority'.

The Hon. S.S. MARSHALL: Well, there were political staffers on the PCAG and there are new arrangements with regard to the GCAC. As I have made very clear, the Auditor-General has not looked at that, but he is completely open to looking at that process. If he does, that will be reported in the ordinary course of affairs.

Mr MALINAUSKAS: I have no further questions regarding the Auditor-General's Department.

The CHAIR: Are there any questions from the government side in relation to the Auditor-General's Department? If not, there being no further questions, I declare the examination of the proposed payments for the Auditor-General's Department to be completed.