The ANAO is undertaking three audits of key aspects of the National Partnership Agreements (NPAs) signed with Queensland and Victoria in relation to natural disasters over the 2010–11 Australian spring and summer seasons.
The objective of this audit was to assess the extent to which the disaster recovery work plans for Queensland and Victoria were prepared, and appropriate monitoring reports provided, in accordance with the relevant NPA.
The audit criteria were based on the NPAs, which: outlined the three priority areas each work plan was to target; and required that they build on the planning work undertaken by Regional Development Australia committees and local governments. The NPAs also required that the work plans identify a set of specific reconstruction projects, and that each state provide monthly reports against the relevant work plan, including in respect to progress in meeting the project milestones and outcomes specified in the work plan for their state.
Separate but related ANAO performance audits are also underway, with the objective of assessing the effectiveness of the Inspectorate, supported by the Taskforce, in providing assurance that value for money is being achieved in recovery and reconstruction expenditure in Victoria and Queensland. The report of the first audit, relating to value for money oversight in respect to Victorian reconstruction projects, is being tabled in conjunction with this report. The report of the third audit, examining the Inspectorate’s value for money oversight activities in respect to Queensland reconstruction projects, is expected to be tabled in the 2013 Budget sittings.
Given their wide geographic impact and the high level of damage to public assets, the natural disasters in Queensland and Victoria over the 2010–11 summer presented significant challenges to the Australian, state and local governments to restore infrastructure and services and provide support to affected communities. In the context of the significant Australian Government contribution to the cost of recovery and reconstruction under NDRRA, new accountability and oversight measures were announced by the Prime Minister. These measures were given effect through separate NPAs signed with Queensland and Victoria. Among the new measures was a requirement for a flood recovery work plan for each state that listed the specific recovery and reconstruction projects that were being undertaken.
The Taskforce is overseeing reconstruction in Queensland and Victoria worth more than $7 billion in relation to the natural disasters in Queensland and Victoria over the 2010–11 summer, of which the Commonwealth is contributing up to 75 per cent. Recovery and reconstruction in both states has been reported as well underway, with significant project expenditure set out in the reports provided by each state.
A work plan has been agreed with each state. The Queensland plan was finalised in August 2011 and the Victorian plan in December 2011. Commencement of the Victorian plan was delayed because of the additional time taken to negotiate the NPA with that state.
The key role of each work plan was to identify the reconstruction and recovery projects towards which NDRRA funding was contributing. The contents of the two plans differ significantly, but neither meets the requirement of the NPA that it identify a set of specific reconstruction projects. Accordingly, neither work plan has provided the additional oversight and accountability that had been envisaged.
At the suggestion of the Taskforce, the one-page Queensland work plan does not identify any specific reconstruction projects. The Taskforce also suggested that reliance could be placed on the already developed state plan. However, the state plan titled Operation Queenslander: The State Community Economic and Environmental Recovery and Reconstruction Plan 2011–2013 does not identify specific reconstruction and recovery projects (as this was not its purpose). Rather, it is a strategic, high-level framework that aligns recovery efforts into six ‘lines of reconstruction’.
It would have been difficult to complete a list of reconstruction projects during the early stages of reconstruction. The approach proposed by the Taskforce was that it would be sufficient for ‘high level descriptions of work’ to be provided initially in the work plan with ‘further details added progressively’. However, the work plan for Queensland has not been updated as project details have become available. Some project level information is provided by Queensland to the Taskforce both for the purpose of the Inspectorate selecting projects for value for money reviews, and in monthly reporting prepared for the QRA board. However, this data has not been updated into the work plan (as the Taskforce had originally proposed to do) and the project level data has remained dispersed rather than being collated to include all metrics referred to in the NPA. As a result, neither source of data provides the full range of project information referred to in the NPA, for both state and council-delivered projects. Accordingly, through this data it is difficult to measure the progress of the projects making up the reconstruction program against the work plan and in meeting project milestones and outcomes (as required by the NPA).
The Victorian work plan is more substantial than the Queensland plan. It identifies 41 reconstruction initiatives costed at $1.02 billion. However, in many instances, the work plan simply identifies broad categories of work rather than specific reconstruction projects, and therefore is also not fully consistent with the relevant NPA. In November 2012, Victoria advised the ANAO that: it agreed that the work plan did not provide specific detail as to which roads or sections of the regional rail network required work; these details are held by LGAs and/or relevant state departments; but the Taskforce did not seek this information from Victoria.
In this context, in November 2012, Regional Australia advised the ANAO that ‘as the new oversight and governance arrangements were implemented, it became clear that the specific requirements of the NPAs did not necessarily reflect the practicalities of rolling out the reconstruction programs’. However, this issue was not raised in the reviews of each NPA undertaken in 2012.10 Regional Australia also has not provided advice to Ministers on this matter, and there have been no recommendations put forward by the department that the NPAs be amended in respect to the requirement for a work plan to identify specific reconstruction projects.
The Taskforce’s development and administration of reporting arrangements has also not been to a sufficiently high standard. There was early recognition that Australian Government oversight of the recovery and reconstruction efforts in Queensland and Victoria was reliant on timely and high quality data. However, the Taskforce relied on the data it received from the states even where this data did not provide the information required by the NPAs. Of note was that, since the project level information contained in the work plans was limited, monthly reporting has not provided for adequate oversight of whether project milestones and outcomes are being met (a key matter that each NPA required to be addressed by the monthly reports). There is also limited evidence of the Taskforce analysing the information that has been reported by the states or raising questions about: omitted data (in relation to agreed reporting metrics); overly-aggregated data that provided limited transparency of actual reconstruction progress in relation to the events covered by the NPAs; and the consistency of the data that was provided over time.
The development of the work plans occurred at the same time that the Taskforce was developing its approach for undertaking value for money reviews of individual reconstruction projects. Conducting these reviews is the primary component of the approach adopted by the Inspectorate and the Taskforce to provide assurance that value for money is being achieved in recovery and reconstruction expenditure in those two states. In this context, the work of the Taskforce was more focused on supporting the Inspectorate in the development and implementation of a framework to conduct value for money reviews of Queensland reconstruction projects. As noted at paragraph 10, the ANAO is undertaking separate but related audits of the conduct of the value for money assurance activities in Queensland and Victoria.
The ANAO has made two recommendations in respect to the preparation and delivery of the recovery work plans for Queensland and Victoria, which were components of new accountability and oversight measures announced by the Prime Minister and agreed to by the respective state governments. The first recommendation is focused on obtaining the project level information on the respective reconstruction programs that was required by the respective NPAs to be included in each work plan. The second recommendation relates to improving data collection, analysis and reporting arrangements of reconstruction progress. This audit also provides a useful reminder to Commonwealth officials that measures agreed to by governments are expected to be implemented unless, in light of new information or circumstances, Ministers decide otherwise.