The McGowan Government will make further immediate improvements across the public sector to enhance accountability and transparency.
Cabinet today approved changes to public sector financial management, following recent corruption charges laid against a former senior public servant in the Department of Communities.
A number of enhancements will now be implemented immediately to internal governance and audit arrangements across the public sector, including Government Trading Enterprises.
These reforms include, mandating that agencies have an audit committee that is independently chaired by a person external to the agency, requiring the regular rotation of accounting firms conducting internal audits and clarifying segregation of duties in payment authorisation.
The Office of the Auditor General will also be requested to conduct targeted forensic audits of agencies’ contract management and systems, supported by data analytics.
A Steering Committee will also be established to progress structural changes to the functions of the Housing Authority, in the Department of Communities.
Social housing and other non-commercial functions will remain with the department, while land development and related commercial functions will be merged with DevelopmentWA – the newly merged entity comprising of LandCorp and the Metropolitan Redevelopment Authority.
The restructure of the Housing Authority and changes to DevelopmentWA will take time and require legislative amendments, and will have a financial impact on the State Budget.
Meanwhile, the terms of reference for the Public Sector Commission review of governance, legal and administrative systems within the Housing Authority have been released. The Review will recommend further changes required and will identify measures that could be implemented across the public sector.
The Premier has also asked the Public Sector Commission to review existing arrangements when dealing with the suspension of employees who face allegations of corrupt and fraudulent activity, to allow for employees to be suspended without pay, with immediate effect.
As stated by Premier Mark McGowan:
“As Premier, I won’t take a backward step when it comes to improving oversight and accountability across our public sector.
“Western Australians know that the majority of our public sector do an incredible job.
“However, without proper reform of the sector, inappropriate conduct can develop amongst a small number of individuals, as what has occurred over the last decade.
“My Government have already introduced a number of legislative and administrative changes that have been successful in delivering quality services and exposing improper conduct.
“Today, we take a further step by announcing a number of individual reforms to identify poor practice and potential fraudulent conduct across the public sector.
“These are immediate and ongoing reforms that will also mean services are delivered better to the people that need them.
“The independent review of the Housing Authority will also provide further advice as to what else can be done to ensure the public have the utmost confidence in their public sector.”
As stated by Finance Minister Ben Wyatt:
“These new reforms will drive even stronger financial accountability controls that can give Western Australians confidence in our public sector.
“Independently chaired audit committees for agencies will bring about a whole new level of neutral oversight that makes sense.
“I will request the Office of the Auditor General to use its expertise to forensically audit targeted agencies’ contract management systems and performance.”
TERMS OF REFERENCE: HOUSING AUTHORITY
REVIEW OF GOVERNANCE, LEGAL AND ADMINISTRATIVE SYSTEMS
The Review is established pursuant to s24B(2) of the Public Sector Management Act 1994. It will examine the governance, legal and administrative systems at the Housing Authority, and where relevant the Department of Communities, that contributed to the circumstances giving rise to a senior public servant being charged with official corruption.
1. With a focus on preventing future failings within the Authority and where relevant the Department of Communities, the Review will recommend any changes to legislation, functions, policies, procedures and practices necessary to:
– ensure proper governance and financial systems and controls are in place and oversighted effectively; and
– strengthen, improve and build a culture of integrity and accountability.
2. Drawing on the above, it will identify measures the State Government should implement across the public sector to prevent the likelihood of such behaviour and actions going unnoticed and similar events from occurring.
The Review will examine the:
a) adequacy of the governance, administrative arrangements within the Housing Authority and where relevant the Department of Communities, relating to:
– financial management, monitoring and reporting
– internal audit and risk management
– delegations and authorisations
– procurement and contract management
b) Department of Communities integrity systems and controls, including its:
– policies, practices and codes of conduct
– systems to detect, report and prevent misconduct
– integrity oversight, education and promotion