Reflecting the increasing involvement of private sector entities in public sector activities, performance audits undertaken by ANAO have increasingly involved the commercial and reputation interests of a number of private sector parties, as well as individuals. This has increased the complexity of undertaking such audits. Three main interrelated concerns are access to information, including transparent explanations; requirements of public accountability, particularly with the use of commercial-in-confidence arguments; and the possible consequence's for a firm's reputation and market situation of any adverse comments on public sector management and administration practices, particularly where there is overseas ownership.
Issues that have arisen in recent audits having included: procedural fairness and natural justice issues, and copyright claims on comments provided on draft audit reports which sought to restrict the capacity of the ANAO to reflect those comments in the final audit report. The legal issue of defamation has also arisen on a number of occasions, which can result in the use of language that may be counter to straight-forward and simple explanations.
One important element supporting the Auditor-Genera's ability to report without fear or favour, is the application of Parliamentary privilege to performance and financial statement audit reports tabled in the Parliament. This privilege can operate to protect the Auditor-General and ANAO staff from being held liable for statements contained in audit reports. This in turn allows the Auditor-General to report freely, openly and responsibly on matters examined in the course of audits. Recently, however, there has been some concern as to whether draft reports and working papers leading to official public reports are similarly covered by Parliamentary privilege. The JCPAA examined this issue in the course of its recent review of the Auditor-General Act 1997. The Committee recognised that:
The provision of Parliamentary privilege is an essential element in protecting the office of the Auditor-General so that it may provide a fearless account of the activities of executive government.129
Legal advice to the ANAO suggests that, until a court decides to the contrary, it is proper for the Auditor-General to proceed on the basis that Parliamentary privilege does apply to draft reports and working papers. The JCPAA accepted this approach. However, the JCPAA considered that the Privileges Committees of both the Senate and the House of Representatives should examine this complex issue to provide greater clarity.
While the ANAO is sensitive to private sector concerns about commercial reputations, the Parliament expects full public accountability, particularly on issues of fair and ethical conduct and protection of the public interest. Conflicts of private and public interest are not new but their resolution in performance audit reports is a challenge for all parties without a genuine shared understanding of what constitutes public accountability.