The Australian Office of Financial Management (AOFM) is responsible for the management of the Australian Government’s debt and related financial assets, such as cash holdings. The AOFM has been the sovereign debt manager for Australia since its establishment in 1999 and undertakes borrowing activities on behalf of the Australian Government.

The Australian Government borrows money by issuing Australian Government Securities (AGS), previously named Commonwealth Government Securities.

AGS is the largest liability on the Australian Government’s balance sheet. The value of AGS outstanding has risen from $561.8 billion as at 1 January 2020 to $889.8 billion as at 30 June 2023, primarily due to increased Australian Government borrowing during the COVID-19 pandemic and is expected to continue to increase with future borrowing activities.

The objective of this audit was to assess the effectiveness of the AOFM’s management of the Australian Government’s debt.

Key findings:

• The AOFM is largely effective at managing the Australian Government’s debt.
• The AOFM and Treasury have largely effective governance arrangements to support operational activities to fund the Australian Government, including establishing, approving and executing a strategy for debt management. The roles, responsibilities and accountabilities amongst key stakeholders in relation to debt management oversight and decision-making under the legislative framework are not transparent.
• The AOFM is largely effective at managing costs and risks associated with Australian Government debt.