The Western Australian Government’s response to COVID-19 is a significant logistical and financial undertaking.

The Government recently published its WA Recovery Plan, which outlines a $5.5 billion commitment to a wide range of measures aimed at ‘restoring business and consumer confidence and rebuilding the economy’. These include infrastructure upgrades, grants, small business support, housing stimulus programs, rent and mortgage relief, and other assistance payments.

The profound community and economic impact arising from COVID-19 responses means that public sector entities are under pressure to deliver these support measures urgently. While responsiveness is critically important in such circumstances, sudden or rapid implementation of government programs presents a heightened risk environment for inefficiency, waste, fraud, declining quality of services and unintended impacts on citizens’ lives. These outcomes can result from rushed planning, abandonment of normal consultation and decision-making forums, and a failure to properly evaluate programs.

While it is not our role to comment on the appropriateness of policy decisions of Government, it is the OAG’s job to support Parliament to hold the Government and public sector entities accountable for activities and resources attributed to the State’s COVID-19 response.

Performance audit program

Our performance audit program will increase its focus on the COVID-19 response over the next few years. We may undertake examinations of selected COVID-19-related preparation, response and recovery measures for any of the following purposes: 

  • providing Parliament with assurance and transparency over major activities and spending linked to the COVID-19 response and whether this is delivering intended outcomes
  • confirming that key risks associated with rapid program implementation are identified and addressed as early as possible
  • ensuring that selected entities establish sound governance structures to oversee program delivery and robust controls to reduce fraud risks
  • checking that procurement and contract management practices are applied in accordance with better practice principles
  • assessing entity preparedness to deal with the demands of a pandemic response
  • evaluating the quality and timeliness of entity advice to Government.

Our Audit program webpage will post details of COVID-19-related performance audits as they are established, including our first COVID-19 performance audits of the $159 million Lotterywest COVID-19 Relief Fund and WA Health’s COVID-19 response preparedness.

Financial audit program

Our financial audit work is of heightened importance during this period, as government spending increases both in terms of value and urgency. It is critical that public sector entities remain within their authorised budgets and continue to meet the requirements of the financial management framework.

Our immediate focus is our audit of the 2019-20 Annual Report on State Finances (ARSF), which reports on the State’s annual financial results and position and explains significant variations from the prior year and from the annual budget estimates.

Noting the demands placed on entities in responding to COVID-19, we are, in consultation with the Department of Treasury, focusing our earliest audit attention on the State entities material to compiling the ARSF. Collectively, approximately 40 entities comprise 95 per cent of the State’s expenditure and assets.    

Guidance and support to entities

Our core financial audit program involves the audit of the annual financial reports of all 172 State and 148 local government entities. This work continues as per previous years, but we have adopted a flexible audit plan to reduce the burden on entities where possible. Key features include:

  • working with entities to establish which areas of the audit could be done earlier, and those that could be delayed
  • reducing the amount and length of audit meetings, conducting them via audio or video conference when possible, or agreeing to requests to postpone
  • separately checking additional expenditures incurred for COVID-19 requirements so that entities receive claimable amounts back from the State and are able to support payment received from the Commonwealth.

While offering this flexibility, our Office has repeatedly reminded all State and local government entities of the need to maintain good controls, particularly over cash, expenditure, assets, and information systems throughout this period of disruption. To help entities, we have published guidance papers including COVID-19 Financial control matters and Security considerations for remote working arrangements. These documents are available on our website along with a range of other Better practice guidance providing advice on various aspects of governance. 

Forensic audit

In early 2020, the OAG established a new Forensic Audit division. This group will conduct targeted forensic audits into aspects of public sector financial management and probity, including contract management systems, to identify red flags that indicate an increased risk of financial misappropriation. The new capability, including advanced data analytics techniques, will examine certain matters in more detail than has previously been possible within the OAG’s existing audit products.

The Forensic team provides additional support on referral from financial and performance audit teams, and has commenced some targeted scrutiny of patterns of expenditure during the COVID-19 response.

Whistleblowers

As always, we encourage and appreciate referrals on matters of concern related to public administration and financial mismanagement. Members of the public, suppliers to government, staff and those charged with governance in public entities can contact us through info@audit.wa.gov.au or through our website.

While individual referrals may not result in immediate specific audit activity, as the OAG tends to examine matters where systemic shortcomings may be revealed, external information received can be very useful to inform decisions on prioritising topics or entities for additional audit scrutiny.

Matters not directly falling within the OAG’s legislative mandate or meeting the threshold for examination may be referred to other appropriate integrity agencies.

We also have trained staff to receive public interest disclosures (PIDs) that relate to substantial unauthorised or irregular use of, or substantial mismanagement of, public resources. Find out more about lodging a PID on our contact us page

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