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Why the public service is missing – or ignoring – rorts and wrongdoing
A high-level taskforce is overhauling the many checks and controls that so obviously failed to stop wrongdoings surrounding the robo-debt scheme, a billion dollars of grants, and PwC’s confidentiality breaches.
Some might say the system of checks and balances in public administration is working. Or not.
Three national audit office reports into a billion dollars of ministerial office sports, health and car park grants; the tax practitioner board’s findings regarding former PwC tax partner Peter Collins; and the soon-to-be released findings of the royal commission into the robo-debt fiasco are all arguably examples where institutional oversight of government revealed gross wrongdoing.
Public service chief and secretary of the Prime Minister’s department Professor Glyn Davis has established a powerful task force to reform integrity controls and culture. Arsineh Houspian
But while each official expose has generated searing headlines, the reality is the wrongdoings all represent deep failings in governance and integrity at multiple levels of government that undeniably should have been picked up and quashed well before the full details were revealed.
Culture trumps all
It is proof that culture trumps all and within the 265,000 federal public sector, the more fundamental issue is why the many risk frameworks, financial and prudential rules, oversight regulations, whistleblower protections, and endless accountability reports that clutter and clag the federal government, so patently missed these spectacular failures of governance.
This is the key question a high-level taskforce, established by the powerful secretaries board, is focused on as leaders contemplate why the many red flags were missed – or ignored.
The integrity taskforce was formed in February by the secretary of the Department of Prime Minister and Cabinet, Professor Glyn Davis, after days of testimony at the robo-debt royal commission exposed chronically bad government practice and stewardship.
It also was established after laws establishing the National Anti-Corruption Commission were passed, with wide definitions that pick up serious or systemic breaches of public trust.
Led by the former head of the international division at the Attorney-General’s department, Sue Robertson, the taskforce has been given a wide mandate to consider cultural, systems and accountability reforms.
Robertson is an executive coach, so she brings an interesting leadership perspective to the heavyweight team of five deputy secretaries who reported back to the Secretaries Board last month, with some interim directions.
At a practical level, the key question is why the various checks in the system failed?
When governments go rogue
The most obvious of these were the large gaps in legal authority for all three grant programs and the robo-debt scheme.
The audit office found no such authority for the $100 million sports grants, and little evidence of any proper project assessment as required to make the $600 million of spending on the car parks lawful. Ditto for multiple projects in $230 million of health and hospital grants rushed out the door by the Morrison government as part of the 2019 federal election campaign.
Commissioner Catherine Holmes will release her robo-debt findings early next month, but has already made it clear that she agrees with the solicitor-general that the whole recovery program was unlawful from the get-go.
Ensuring activities are within the bounds of lawful power is one of the core operating principles of the public service and yet, to this day, no one inside the system has paid any penalty.
Each of these programs were run through the Cabinet office, where legal checks were required, but were seemingly not adhered to by key central agencies, most notably the Attorney-General’s department.
The department’s various branches had plenty of insight that something was not right about the health grants program, and went missing when the robo-debt submission sailed through without question. And remained so till the debt recovery scheme was finally shot down amid court action.
Follow the money
Finance, in its capacity of overseer of the grant rules and steward for taxpayers’ money, was also seemingly unable to sanction behaviours in obvious breach of finance law that require proper assessment.
And as the sports grants scheme revealed, those laws seemingly don’t apply to outside agencies, such as the Australian Sports Commission. An obvious reform.
So, too, is the absurdity of enabling ministers to dodge rules that require proper assessment of project grants by invoking a loophole that allows them to simply advise the finance minister (one of their own colleagues) that they have not taken their department’s advice.
Reporting these to parliament, or better still, simply not allowing ministers to skirt the grant rules, would again put an end to ministerial spreadsheet nonsense.
Grants are not the only payments ministers can make, so bringing state and local government payments into the same system as grants would close off another ministerial loophole.
Ministers are also required by law to administer funds properly and ethically. The trouble is, that law (Public Governance Performance and Accountability Act) has no remedies for breaches. Laws with no enforcement teeth are arguably worse than no laws at all.
Tick-a-box compliance
Finance oversees a cacophony of spending reporting, transparency, program delivery and agency-level reporting systems and dashboards, but with little ability to enforce rigour or demand that claims can be checked with evidence.
There is a whole army of officials spread through the public service whose only job is to manage this internal reporting. This leads to a type of faux reporting, most evident in the boxes of (paper!) annual reports that get dumped on federal parliament each spring. This tick-a-box compliance ultimately fuels an endemic resistance to proper evaluation.
Documentation, or the lack thereof, has been a persistent theme, and mandating there be written advice would go a long way to establishing an auditable trail.
There is no use having those bread crumbs end at the ministerial office doorway. Abandoning the fiction that ministerial advisers don’t have to account for their decisions and advice, would be a significant step to ending the dark arts practices of ministerial staff.
A new referee
The ombudsman’s ultimately feeble response to the robo-debt fiasco exposed the weakness and lack of moral clarity that was exposed in spades at the royal commission. The Human Services’ behemoth simply rolled over the small oversight body.
At a higher level, bringing in some sort of inspector-general to independently watch over the entire civilian portfolio structure would provide a robust alarm system. If it had not stopped the initial robo-debt scheme, it might have brought it to a halt far quicker than the three years it took to finally shut the program down.
A similar device is effectively used to monitor the six federal intelligence agencies, and Canberra is a small enough town to ensure bureaucratic anxieties about programs that have gone off the rails are listened to.
Whistleblower protections are finally being strengthened, but the real challenge is to create a culture where it is clearly not acceptable to simply overlook ethical and legal breaches.
This can get mightily tested by ministers who go off-piste and/or where the culture of agencies means there is little challenging of “G-suite” leaders. Throw in a deeply hierarchical, risk-averse culture, and it explains the “learned helplessness” that former PMC secretary Peter Shergold identified as pervasive across the public service several years ago.
That was before the multi-ministries, ministerial slush funds and the full horrors of robo-debt became evident.
Frank and fearless starts at home, and if junior staff are not being encouraged to provide robust advice from day one, then it simply won’t happen up in the higher ranks, and with ministers.
Making independence real
This implies a healthy professional distance between the public service and ministers and a culture and practice of being able to speak independently of the government of the day.
There has been some progress, but there remains far too much double-checking of drafts with ministerial officers, and looking over the shoulder to what ministers might say or think – right across departments, regulators and portfolio agencies.
Labor runs a much tighter ship when it comes to controlling messaging, and there are already too many signs of the bureaucracy laying doggo and deferring to ministers for public statements. This, in turn, breeds a subservience and tepidness that eats away at independence and forthright advice, and in its worst form breeds so-called grey corruption.
Executive government comes in many forms, so stress-testing this new public service integrity culture for all styles of ministers and cabinets would ensure guard rails simply don’t get abandoned for can-doism.
Finally, bringing some real urgency to oversight would avoid the chronic delays, which are most obvious with the PwC confidentiality breaches, where it has taken the “system” eight years to address.
More importantly, it would speedily end toxic programs such as robo-debt, where more than 400,000 vulnerable people were brutally exposed to big government at its worst.
