1.1 Under the Public Works Committee Act (1969) (the Act), any public work8 estimated to cost $15 million or more must be referred to the Parliamentary Standing Committee on Public Works (the Committee).9 The Committee is required to report to both the House of Representatives and the Senate on public works referred to it. The Committee's terms of reference are contained in section 17(3) of the Act. Essentially, these are:
• the stated purpose of the proposed work and its suitability for that purpose;
• the need for, and advisability of, the work;
• the cost-effectiveness of the proposal;
• the amount of revenue the work will produce if that is its purpose; and
• the current and prospective public value of the work.
1.2 In early 2007, the Joint Committee of Public Accounts and Audit (JCPAA) advised the Australian National Audit Office (ANAO) that a priority10 of Parliament was for the ANAO to conduct a performance audit of the processes associated with the development of public works proposals by agencies that fall within the scope of the Public Works Committee. Against this background, the ANAO decided to undertake two related audits on this issue.
1.3 This first audit examines whether the Department of Defence's (Defence's) capital works projects have been submitted in accordance with the Committee's requirements for notification and review prior to entering into financial commitments for the works. A second audit, which is currently underway, is examining a sample of six construction projects, two of which are Defence projects, selected from the 58 reports released by the Committee during the tenure of the 41st Parliament (between December 2004 and September 2007). The audit will assess the planning and delivery of a sample of capital works projects (including two Defence projects), the extent to which the selected projects have met expectations, and the extent to which relevant sponsoring agencies have complied with the requirements of the Act and approved procedures. This second audit is expected to table in the Spring 2008 Session of Parliament.
_________________________________________________________________________
8 A public work is defined as a work proposed to be done by the Commonwealth, or on behalf of the Commonwealth, and it includes construction, alteration, repair or destruction of buildings and other structures.
9 The Parliamentary Standing Committee on Public Works is also known as the Public Works Committee or the PWC.
10 Each year, the JCPAA consults with all other Committees of the Australian Parliament to identify the priorities of the Parliament for performance audits to be undertaken in the following financial year by the ANAO.