APY Lands, Governance

The Hon. T.J. STEPHENS (14:59): I seek leave to make a brief explanation before asking the Minister for Aboriginal Affairs and Reconciliation questions about the recent audit into accounting policies and procedures of the APY.

Leave granted.

The Hon. T.J. STEPHENS: I refer the minister to the report by Ernst and Young, co-commissioned by the Minister for Aboriginal Affairs and Reconciliation, which was made public recently. Of concern was the finding that 52 per cent of transactions for the financial year 2014-15 were either non-compliant or unable to be determined. My questions to the minister are:

1. Does the minister think it is appropriate for 52 per cent of APY expenses to be either non-compliant or not properly documented?

2. Was the minister aware of this questionable conduct before the report was finalised on 27 May 2016? If so, what has he done to improve or rectify the situation?

3. Can the minister explain why such a shocking lack of proper accounting standards in regard to public money would not justify the sacking of the executive and the appointment of an administrator?

The Hon. K.J. MAHER (Minister for Employment, Minister for Aboriginal Affairs and Reconciliation, Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for Science and Information Economy) (15:00): I thank the honourable member for his question. I know we regularly speak of these matters, and I think it is fair to say we share a desire for a common outcome. We might have slightly different ways that we want to get there. But I thank the honourable member and acknowledge that we want to see things improve. I think that is a mutual goal we both have.

In relation to his questions, and I am sure he will correct me by way of interjection if I have not got them in the right order or not answered the question, the first one: do I think it is acceptable, the results of the EY report into the 2014-15 year? No, I don't. Was I aware of these problems before the EY report? Of course, I wasn't aware of the exact nature of the problems and the percentages, that is obvious, because I did not have the report yet, but there was a very high level KPMG report into a small part of procedures at APY that pointed to the fact that there were administrative practices that were not up to scratch, which is why the federal minister, Senator Nigel Scullion, and I commissioned the EY report.

So, yes, I think broadly, all those who have been involved in matters to do with the APY and visiting the APY lands are aware that, firstly, it is very remote, it is very difficult, and there are many challenges, but certainly that KPMG report, which was the reason the further EY report was done, pointed to the fact that, yes, there were administrative practices lacking. I did not get all of the third question down, but I think, 'What has been done about it?' was the substance of the final question.

A number of things have been done about it, yes. Before the EY report was delivered, a number of things were put in place. There has been significant upping of the transparency and accountability requirements, for example. There has been implementation of strict delegations for approving payments and, certainly, for quite some time the current general manager is the only one to have approval for those delegations. They were spread much more thinly and widely since then. There has been an independent audit of spending controls from July 2014 to December 2014. There is a specific requirement that documentation that has not been provided previously now goes up on the APY website.

There are monthly reports that are given, I think, to the Alice Springs based accountants in relation to year to date spending. I think the Auditor-General noted in his 30 June 2015 report that it was evident from their review that DSD and the minister had implemented more stringent conditions on the release of grant funding than in 2014-15, and that they had also continued to facilitate processes that aimed to improve governance and accountability arrangements for APY. I agree with what the honourable member is asking. The past practices have not been good enough. If improvements don't continue then I completely agree with the honourable member that it is appropriate that an administrator be appointed.