The Australian National Audit Office (ANAO) has released a report on itself. 

The ANAO’s 2021-22 annual report reviews the office’s capabilities and makes broader observations of how the public sector is operating.

In the report, auditor-general Grant Hehir calls for the creation of two additional departments that could impact the office’s performance audit delivery.  

“While the additional funding has alleviated some budgetary pressures in the delivery of our products, the increasing demand for audit-related expertise has led to a competitive recruitment environment, tight labour market and increased costs associated with contracted staff,” he said. 

“We have identified that maintaining resourcing requirements is a strategic risk for the organisation, across all audit disciplines,” the auditor-general said.

Mr Hehir said there are three key areas in which the public sector “regularly” falls short of expectations: cybersecurity, procurement, and grants administration.

Mr Hehir said the audit shows a strong “optimism bias” and a lack of analysis in cybersecurity - an area with an evolving risk.

On procurement, the auditor-general said the public sector often fails to find value for money and an absence of open competition.

“Poor entity practices related to planning, record keeping, contract management, negotiation, risk management, and probity raise questions about whether the professionalisation of procurement should be a priority within the public sector,” Mr Hehir said. 

He said another major issue is an observed absence of transparency in grant administration. 

In the review of its own performance, the ANAO found it met five out of seven performance measures for its assurance audits and five out of six performance measures for its performance audits. Just three out of six of its measures for relationships and corporate and professional services were met. 

The report also found that just 61 per cent of entities addressed “moderate and significant findings” made by the ANAO within one year, below the ANAO’s target of 90 per cent. 

However, it found that 86 per cent of recommendations from an audit had been implemented after two years on average, which beats the ANAO’s target of 70 per cent

The audit office also went over its target for the number of performance reports prepared for parliament and the rate of agreement to its recommendations, hitting 96 per cent on a 90 per cent target.

The average cost of each performance audit was $486,000 in the latest reporting period, down 6.6 per cent from the previous period.

However, this comes after a rise in last year’s average cost up to $520,000, which was an 18 per cent increase on the period before.