Roads to Recovery

by Leslie Riggs

Executive Director

AusLink

Why is AusLink different?

• Improved long-term planning, supported by key cooperative arrangements and increased investment.

• Designed to achieve better national land transport planning, funding and investment decision making.

• Encouragement of the best ideas and solutions.

AusLink Achievements

• AusLink - announced June 2004, Legislation enacted July 2005.

• 12 months achievements include:

Improved partnerships with states and territories;

Considerable progress implementing the National Land Transport Plan; and

Advancement of corridor strategies (Council of Australian Governments asked for the completion of 24 corridor strategies by June 2007).

Progress on AusLink National Projects

• These are projects on the AusLink National Network

• Budget 2004-05 to 2008-09 is $7.5b

• 37 of the 144 projects completed with nearly all projects in planning or construction stage.

Strategic Regional Programme

$127m available through a competitive process

• Over 480 applications received from 274 councils

• Nearly $1b in funding sought leveraging an addition $1b for regional transport projects

• Announcements of successful projects will be made later in 2006.

AusLink Roads to Recovery

• A successful programme

• 15,000 projects funded under the previous programme

• New program running for a year and another 5,000 projects listed for funding

• As before, selection of projects in the hands of councils with few exceptions

Supplementary AusLink R2R Program

• Supplementary Program introduced in May 2006 budget

• $307.5 million for one year only

• Equal to one year’s R2R funding but you have three years to spend the money

Arrangements for Supplementary Program

• Funding conditions based closely on those for the main program

• Same types of projects can be funded

• Arrangements simplified as there is a once off grant instead of quarterly payments

• There is quarterly reporting and annual acquittal

• Other requirements in the funding conditions provided to councils in May

ANAO audit

• ANAO audited the Department’s management of the program

• Also involved audits of R2R programs of 93 councils

• The report has been tabled in Parliament

• All recommendations are being implemented with one qualification

ANAO findings

• The ANAO found places where the programme could be improved

• The ANAO report has shown that some councils are failing to comply with the legal requirements of the program

• Our own follow up has supported this and it needs to be fixed

Cost shifting

• The most serious issue involved the expenditure maintenance requirements

• Many councils did not comply with the expenditure maintenance requirements

• The Department will monitor aggregate expenditure in the future

Expenditure Maintenance Reporting

• Councils need to be able to demonstrate that cost shifting has not occurred

• We will monitor expenditure maintenance requirements in annual reports

• Arrangements are flexible to take account of real world problems

Annual Reports

• The ANAO expressed concerns about the compliance of annual reports even after we have accepted them but can’t assess the materiality of that complaint

• Of direct concern, my officers have to reject many annual reports because they are wrong

– Wrong carry over figures– Wrong expenditure during the year– Wrong addition

• This needs to improve

Other ANAO concerns

• Accuracy of expenditure information in quarterly reports

• Lack of shared understanding on some matters

• Accuracy of projects information

• Officers often did not know what was required of them.

Implementation of ANAO recommendations

• We have implemented, or are in the process of implementing, the recommendations

• Some have been done

• Some relate to activities that relate to the future and will be addressed when the time comes

On going monitoring

• There are two processes underway – R2R officers have been visiting councils for over two years.

This provides the opportunity to address some ANAO concerns

– A series of financial audits which have grown out of the ANAO audits

Monitoring

• Involve compliance checks of projects

• But also an opportunity for council officers to discuss things in detail with R2R staff

• And an opportunity for R2R staff to take on board ideas from councils

Financial audits

• Pilot study involving 7 councils completed to determine terms of reference for ongoing program

• Aim to audit 20-25 councils a year from 2006/07 onwards.

Findings of Ernst and Young audit

• Findings do not make happy reading

• Only one in seven councils knew that there were expenditure maintenance requirements under previous program

• Only three in seven knew that there were these requirements under the present program

• Many council officers had never read the program documentation.

What Councils are doing

Many councils are doing the right thing

Better information being provided

Evidence that many have carefully read the program documentation

What Councils need to do

• Comply with the expenditure maintenance requirements

• Comply with the signage requirements

• Take care with project descriptions and expenditure information submitted to the department

• Ensure that annual reports are correct and on time.

From here on

• Cooperation between councils and the Commonwealth

• Questions?