All public sector organisations are required to be transparent, responsive and accountable for their activities. Citizens are entitled to know whether public resources are being properly used and what is being achieved with them. This paper considers the question of public sector accountability1 in the context of public-private partnerships (PPPs) for the delivery of public sector outcomes. The central theme is the challenges facing audit institutions and Parliaments in protecting the public interest and maintaining accountability for the expenditure of public funds in an environment where, more than ever before, significant aspects of the delivery of public sector outcomes involve complex, long-term arrangements with the private sector.
A key question is whether PPPs, by their very nature, present the possibility of gaps in public sector accountability arising, or whether, as is the case with traditional funding and procurement models, it is more the approach taken to questions of accountability by the public and private sector entities involved that will largely determine the extent to which suitable accountability is maintained. It may be that the greatest challenge to audit institutions and Parliaments in maintaining appropriate accountability in an environment of increasing private sector involvement is the extent to which, and the manner in which, existing legislative and other requirements will need to be exercised and/or changed.
I thought it would be useful to first canvass the rationale, nature and forms of PPPs as a lead-in to the following discussion of risk management and corporate governance in the context of PPPs. The third section of the paper identifies a number of specific audit examples, from Australian and international experience, exploring important aspects of complex procurement and service delivery arrangements involving the private sector which raise significant issues for the maintenance of accountability, including transparency and openness. The examples draw on audits of:
● private sector delivery of public services;
● the sale of public sector assets;
● contract management; and
● performance accountability.
The fourth section of the paper deals with emerging challenges to the maintenance of accountability to the Parliament for the efficient and effective achievement of public sector outputs and outcomes, with the concluding remarks canvassing some major pressures for continuing change in this important area of public administration.