Grant Hehir is the first person to be appointed auditor-general of Australia in more than a century not to be drawn from the Australian Public Service. The 15th Commonwealth auditor-general, he will take up the office shortly. He replaces Ian McPhee, who recently completed a 10-year term in the post. This is the maximum available under the Auditor-General Act but McPhee, as it happens, has had a few extra months in an acting capacity after his term expired.
Hehir, at the time of appointment, was only a few years into an eight-year term as NSW auditor-general. He came to that post after a succession of roles in the Victorian Public Service: deputy secretary, strategic economic and social policy, Department of Premier and Cabinet; head of the Education and Training Department, 2003-06; secretary, Department of Treasury and Finance, 2006-13. His previous experience included time in the federal Department of Finance and Administration. It would be interesting to know about Hehir's schooling and education but, as a practitioner of the new anonymity, this information does not appear to be available publicly.
The only previous auditor-general not to come from the APS was the very first, J. W. Israel, who came from the Tasmanian public service. (There is only one other occasion for which there is evidence that consideration was given to appointing someone from outside the APS; in that case, the individual in question had risen to very senior levels in the APS before taking a state appointment.)
Israel stayed for a quarter-century. It is possible that his appointment to the Imperial Service Order in 1916 was intended as a sign that his retirement was expected. In the event, Israel stayed on for another decade, departing shortly before his death in 1926. The Audit Act was immediately amended to provide that, henceforth, the "auditor-general for the Commonwealth shall cease to hold office upon attaining the age of 65 years".
This marked a shift in the concept of the auditor's place in the scheme of things, from what was viewed as an office almost on a par with that of a judge, to one essentially but not completely administrative in character. This is exemplified in special provisions that remain for removal of an auditor-general.
It is now customary for auditors-general within the Westminster world to have terms of 10 years or so. Only in Britain, at least until recently, does it appear that the chief audit officer, the comptroller and auditor-general, can literally remain in office forever, subject to good behaviour (and mortality). A recent occupant of the office, appointed in 1988, only left in 2008 at the age of 74.
Today, the historically special position of the auditor-general is misleadingly signalled in the act by description of the auditor as an "independent officer of the Parliament". This view of the post derives from a false logic that because the auditor-general is plainly not an officer of the executive government, nor, for that matter, of the judicial branch, he or she must, ipso facto, be an officer of the Parliament. The auditor-general is appointed by the governor-general. Ministers, in advising the governor-general, customarily consult the chair of the joint committee on public accounts and audit.
The office is best understood in an older public officer tradition: a person holding appointment under the Crown, not subject to direction by ministers nor, indeed, anyone else, and reporting directly to Parliament. The misleading nature of the "officer of the Parliament" idea is illustrated by other provisions of the auditor-general legislation concerning, for example, the staffing of the Australian National Audit Office under the Public Service Act, not the parliamentary staff legislation. When considering Westminster governance, it is also generally unwise to talk about independence except in relation to the judiciary. In the end, pace Montesquieu, everything, to some degree, comes within the pale of Parliament.
Since Israel's departure, lengthy service as auditor-general has been rare, the longest tenure being that of V. J. Skermer, who was in the post from 1961 to 1973. He is also the only officer of the Audit Office to rise to the very top. He did so reportedly after some controversy among cabinet ministers about another proposed appointee.
In the two decades from Israel's retirement, auditors-general were mainly drawn from what could be called the accountancy community within the APS. They were internal appointees in two senses: they were drawn from the APS and their training was on-the-job. Only occasionally was it marked by some sort of professional qualification. The big exception was Herbert Charles Brown, 1935-38 – an exception in the sense that, before his appointment as auditor, he held three head of department posts: Markets, Transport and Interior.
In the decades after World War II, it became customary to look to the Treasury for an auditor-general, and the Finance Department subsequently. In this sense, Hehir fits the conventional pattern. Skermer was an exception. Another, Keith Brigden, had formerly been a second commissioner of taxation. John Taylor, the only other former head of department to take the job, was trained in economics and his career included assignments in the Tariff Board, the tariff division of the Department of the Prime Minister and Cabinet, and the Public Service Board as a commissioner, before he became secretary at the Department of Aboriginal Affairs.
All the Treasury appointees with one exception have come from what could be called the supply and financial management side rather than the economics stream that became so prominent in postwar years. The exception was John Monaghan, who, inter alia, for a time, headed general finance and economic policy, the premier division of the Treasury in those years.
The story of the Audit Office, now the Australian National Audit Office, is an instructive illustration of administrative transformation. The first non-departmental agency to be established within Commonwealth administration (in 1901), the office was the sacred custodian of Gladstonian public finance. Its creed was compliance; the green tick its calling card. It was infused with a puritan ethic as it pursued and protected the interests of the taxpayer.
The auditors in the 20 years from Israel's retirement to the end of World War II – Charles Cerutty (1926-35), Herbert Brown (1935-38) and Ralph Abercrombie (1938-46) – did not hesitate to lecture governments, personally and directly, about waste, reductions in public spending, fraud and the need for the unemployed to work for sustenance payments. Subsequent auditors – the Treasury men, A. C. Joyce (1946-51), James Brophy (1951-56) and H. C. Newman (1956-61) – were less articulate in their office work but found respite elsewhere. Joyce was president of the Baptist Union of NSW, while Brophy had a full life in the community, running the eisteddfod and organising swimming and hockey. It could be said that he did the ultimate audits as deputy coroner, 1958-64.
Skermer might not have been first choice for the job but his appointment proved fortuitous. His term signals the start of the modernisation of public service auditing. Application of computing capacity proceeded in an increasingly serious way. Of more immediate relevance, however, was fostering of internal audit within departments and agencies.
His successor, Don Steele Craik, brought an administrator of considerable stature to the post, with highly relevant experience in the Tax Office (in the critical revenue and research division) and the Treasury. His eight years (1973-81) as auditor-general witnessed the foundation of the modern ANAO.
Craik formed the view early that government auditing needed revitalising and reconceptualising. It needed to go well beyond traditional compliance audits where computers were increasingly replacing the regular workforce. It needed to tackle questions of efficiency and be guided by the quest for value for money. Craik wrote of the "pressing need" to remove "anachronistic limitations" so that the auditor-general could "evaluate whether expenditure although regular in every respect, is wasteful and non-productive. This would enable him to operate more effectively in the interests of parliamentary scrutiny and control of financial administration."
In ordinary times, Craik would have experienced heavy weather urging the developments he saw as desirable in the short term and essential in the longer. Fortune, however, came his way within a year of arriving at the Audit Office, when the Whitlam government established the Royal Commission on Australian Government Administration (the Coombs commission). Few government agencies at the time seized the opportunity it presented as skilfully as did the Audit Office.
In formulating his ideas, Craik drew on the work of the General Accounting Office (now the Government Accountability Office) in the United States, and recent augmentation of the role of audit in the federal government of Canada. He placed his views discreetly before the royal commission, winning support by firmness in advocacy without the distractions of hyperbole or exaggeration. Indeed, he underlined that change was a long endeavour by drawing upon American experience. "The comptroller-general of the US has made the point very clearly that this transformation was a very slow process and they found in the early years that they had to move very cautiously and slowly until they built up a body of expertise and experience to enable them to be effective."
But, pressing the case, he wrote: "Should the role of the auditor-general be extended, beyond financial auditing, to embrace any elements of operational auditing and program achievement auditing, this would correspondingly enlarge the range of matters on which audit would be enabled to make worthwhile contributions."
Though the Treasury "in realism" cautioned of the risks entailed in moving "beyond the question of wasteful expenditure and go into judgments on whether or not this program is being done economically and efficiently", Craik won an important ally in the Public Service Board. In view of the "frequently close relationship between financial management and other management issues, information flow which already exists between departments and the auditor-general's office", and "the accepted independence and impartiality of the auditor-general's role", the board concluded that "placement of the efficiency and audit function with the auditor-general would be most appropriate"!
So it was that the royal commission, early in its report, endorsed efficiency reviews based on value for money and proposed, echoing the board, that it would be "most appropriate" if the auditor-general's role was extended to comprehend this function. But a royal commission recommendation was barely even a start. Years went by as the matter was discussed in interdepartmental committees, and cabinet submissions were drafted and debated. But eventually the Audit Act was amended and the auditor-general had a mandate.
Battles then arose on other fronts. Departments were keen on the idea so long as ot was the programs of others that were to be reviewed. Eventually, there was actually an efficiency audit – into property management. The report came under sustained attack; findings were criticised and feelings had obviously been hurt.
In the Audit Office itself, compliance auditing was loyally supported. Computing simply made it more possible to scrutinise any spending more closely.
Only at the end of the 1980s did it seem there might be some light at the end of a very long tunnel. The public accounts committee decided to review the Audit Act.
What had earlier been cautious reservations in the Treasury became ever more formidable as the Finance Department, with reform agendas of its own, viewed the likely emergence of an increasingly active Audit Office with deep suspicion. In its last gasp, this took the form of seemingly endless argument about appointment of the auditor-general and whether there might be some small role for parliamentary authorities.
The denouement came swiftly. John Taylor, former secretary of Aboriginal Affairs, brought both impatience and a certain flamboyance to finalising the business of audit reform, now getting on to 20 years in the making. A few Finance officers put in strong bids for a Custer award as the end drew nigh but, inevitably, the forces of resistance slowly yielded and the new audit legislation made its way to the statute book (notwithstanding that controversy about accommodation of the ANAO in Centenary House continued to be a distraction).
Taylor retired shortly before the legislation was finally enacted but he was succeeded by Pat Barrett, a deputy secretary of Finance who for years had assiduously pressed and, more significantly, explained the case for administrative reform. He brought the same spirit to his new role and it has persisted under his successor, Ian McPhee. Fault-finding, which too often characterised compliance auditing, was replaced with a perceptibly more positive style. ANAO reports and other publications are distinguished not only for constructiveness but also by thoroughness and range.
As the great reform endeavours of the long postwar era come to a maturity, no institution stands out more for consolidating and entrenching the achievements of that era than the ANAO. Sir Charles Trevelyan repeatedly reminded the British civil service that the quest for efficiency is unending. This is no more clearly understood than by auditors-general and the ANAO. Even so, their accomplishment is too often unnoticed and unsung.
J. R. Nethercote is an adjunct professor at the Australian Catholic University's Canberra campus. firstname.lastname@example.org