Chapter 6Regulation of the consulting industry
Management consulting—an unregulated profession?
6.1While individual management consultants are subject to domestic laws, unlike other professional services such as auditing and law, management consulting is not a protected or regulated profession. Consequently, management consultants cannot formally be stripped of their title in cases of unethical behaviour.
6.2In his submission to the committee, Mr Peter Woolcott AO, the Australian Public Service Commissioner, stated that the current framework of the Public Service Act 1999 (PS Act) does not explicitly provide measures in relation to the integrity of consulting services, or other external sources of labour, that agencies may use to complement the Australian Public Service (APS) employee workforce.
6.3As noted previously, the Commissioner advised:
Individuals providing consulting services to the APS are not employed under the PS Act, and are therefore not required to uphold the APS Values and Employment Principles, or comply with the APS Code of Conduct. However, they are likely to be bound by contractual provisions that are broadly analogous to certain obligations under the APS Code of Conduct, including those relating to the declaration and management of conflicts of interest, compliance with all laws and relevant policies applicable to the performance of the services, maintaining confidentiality, not providing false or misleading information and an additional positive obligation to prevent and detect fraud. Protections for the Commonwealth are included in the majority of Commonwealth contracts, where contract clauses allow for the termination of a contract based on a material breach (for example, breaches of confidentiality and breaches of moral rights).
6.4Managing issues related to breach of contract in government consulting contracts can be challenging and time consuming. Nevertheless, it is the predominant method that the APS has to hold the external consultants that it engages to account. This is made more difficult as the regulation of large partnerships, which is the structure of the major accounting, audit and consulting firms in Australia, is within the remit of the State and Territory governments, rather than the Commonwealth.
6.5This means that the duties and obligations placed on corporations and their directors set out in the Corporations Act 2001 do not apply to many consultants, including those employed by the Big 4, and federal regulators such as the Australian Securities and Investments Commission (ASIC) do not generally have the power to initiate investigations of wrongdoing.
6.6The current framework has resulted in major regulatory gaps in relation to the performance and conduct of consultants which will be explored further in this Chapter.
Professional standards apply to some consultants
6.7The committee received evidence that unlike professions such as accounting, law, medicine, and engineering, there is no specific registration regime for consultants. This can result in some consultants being subject to no oversight and others being subject to multiple overlapping oversight and regulatory regimes (for example if they are also a legal practitioner or a registered tax agent). The following standards apply to some consultants, but not all, creating a significant and uneven gap in regulation.
APES 110 Code of Ethics for Professional Accountants
6.8The Accounting Professional & Ethical Standards Board Limited (APESB) was created as an independent body in 2006 by the Australian professional accounting bodies with a primary purpose to develop, issue and maintain high-quality professional and ethical pronouncements for the Australian accounting profession (including firms) in an independent manner with a public interest focus.
6.9The committee received evidence that some consultants, who are also members of other professional organisations such as Chartered Accountants Australia and New Zealand (CA ANZ), are required to comply with APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (APES 110) and APES 320 Quality Management for Firms (APES 320) that provide Non-Assurance Services.
6.10While APES 110 does not apply to all consultants, it appears to provide a comprehensive code of ethics for the consultants who are required to comply with it. APES 110 has been described as a 'robust, comprehensive suite of Australian professional and ethical standards which are benchmarked to global standards issued by the International Ethics Standards Board of Accountants (IESBA) and the International Auditing and Assurance Standards Board, and which codify global best practice'. Further, it is based on the Code of Ethics for Professional Accountants (including Independence Standards) issued by IESBA.
6.11The aim of APES 110 is to require compliance with the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. This also includes the requirement to act in the public interest. It is intended to be complied with in addition to all legal and regulatory requirements. These requirements are set out in considerable detail and include practical strategies and examples to assist members to comply with requirements. It discusses nuances that could impact on compliance, including, for example, the factors to consider when certain requirements clash with others, and what steps to take when responsibilities under the Code conflict with legal or regulatory requirements.
6.12As discussed earlier, APES 110 provides additional guidance, including the specific requirements for the management of conflicts.The APESB explained that:
Before professional accountants in public practice accept a new client relationship, engagement or business relationship, APES 110 requires them to take reasonable steps to identify circumstances that might create a conflict of interest and, therefore, a threat to compliance with one or more of the fundamental principles (paragraphs R310.5 to 310.5 A3).
Professional accountants must also remain alert to changes in the nature of activities or services, interests and relationships that might create a conflict of interest while performing professional activities or engagements (paragraph R310.6 of APES 110).
6.13In his evidence to the committee, Mr Channa Wijesinghe, CEO of the APESB advised:
On average, 80 per cent of the big four firms' revenue in Australia comes from consulting clients, as opposed to audit clients, where detailed audit independence standards and prohibitions are in place. The Australian Code APES 110 applies equally to work performed for consulting clients as they do to audit clients of these firms. Accordingly, we encourage the inquiry to consider the opportunity to establish a rigorous code of ethical behaviour based on APES 110 that would be applicable to all consultants that contract with, and provide any form of professional services to, the government.
6.14At least one consulting firm is bound by APES 110, KPMG told the committee that all its partners are required to comply with APES 110.
6.15APES 320 requires firms to establish and maintain a system of quality management for non-assurance services designed to provide it with reasonable confidence that the firm and its personnel are complying with Professional Standards and applicable legal and regulatory requirements. This system of quality management is intended to assist members to prevent conflicts of interest, breach of contract and other unethical behaviours.
6.16The committee notes that some submitters have said that while APESB sets standards, its mandate does not include monitoring or effective enforcement mechanisms. However, it is still a comprehensive code that is a sound starting point for consultants who are currently not subject to any industry codes.
The Institute of Management Consultants (IMC)
6.17The Institute of Management Consultants (IMC) is a peak professional body for management consultants in Australia. The IMC is a member of the International Council of Management Consulting Institutes (ICMCI). Mr Peter Westlund, the National President and Board Chair of the IMC gave evidence that of the approximately 90,000 management consultants in Australia, around 300 are members of the IMC. Concerningly, his evidence was that no members of the Big 4 consultancies were, at the date of that hearing, members of the organisation.
6.18IMC's role is to 'promote excellence and integrity in the management consulting profession, to improve the knowledge and skill of management consultants with respect to their roles, duties and responsibilities and to encourage and require the highest professional standards and ethics among management consultants'.
6.19The IMC submitted that:
Unlike other professions, the management consulting profession is not regulated in Australia: anyone who wants to call themselves a management consultant can do so, unlike accountants, financial advisors, engineers, health professionals, lawyers etc who all have to meet the accreditation requirements of the relevant professional or regulatory bodies before they can practice.
…
Where legislation does not require a licence to practice and there is no regulator, professional organisations are crucial in maintaining professional standards, especially the competency and ethics in the practice of management consulting.
6.20The IMC submitted that members of its organisation are governed by a Code of Ethics, and the International Standard ISO 20700:2017 Guidelines for Management Consultancy Services (ISO 20700). Breaches of the Code of Ethics may be reported by clients, the public or a member of the IMC. When a complaint is received, a constitutional disciplinary procedure is instituted to investigate and recommend appropriate action.
6.21The IMC advised that in relation to disciplining members for unethical conduct, the directors may resolve to warn, suspend or expel a member from the Institute.
6.22Therefore, while the IMC does have some influence over members, it does not appear that it can issue or enforce a wider sanction or ban on an individual member (unlike, for example, a law society on a legal practitioner who has behaved unethically), and of course, the relevant codes and standards that it applies would not apply to consultants who choose not to be a member, which currently is the majority of consultants in Australia.
Options for consideration
6.23Throughout this inquiry, the committee has received evidence from several submitters who have provided suggestions and recommendations for addressing the lack of regulation of consultants who are engaged by the government. The suggestions and recommendations made will be discussed in this section.
Structural and regulatory changes
Imposing a cap on external consultants
6.24To support rebuilding the capacity of the APS and employing more public servants, several submitters suggested introducing a cap on the engagement of consultants and using an in-house consulting service to address the gap that will initially arise from reducing the number of consultants (such as Australian Government Consultancy which is discussed in more detail in Chapter 3 of this report).
6.25The Centre for Public Integrity (CPI) submitted that consideration should be given to the benefits of a cap on spending on external consultations, as well as the form this could take. However, it considered that a 'hard cap' would be unworkable, but a 'soft cap'—similar to that which previously existed in the UK—could be designed in such a way that it achieves a reduction in the overreliance on consultants while avoiding rigidity.
6.26CPI advised that the use of an in-house consultancy service and partnerships with research institutions could address issues that may arise when first reducing spending on external consultants without paralysing the ability of the APS to meet its key responsibilities.
6.27CPI acknowledged that 'there is likely always going to be a need for the engagement of specialised consulting services where technical expertise would be uneconomical to maintain within the APS, but much of this specialised knowledge could be developed and maintained through an in-house consulting model, where a team with specialised and technical knowledge can work collaboratively with APS staff who have sectoral knowledge to keep skills within the public sector and produce better outcomes'.
6.28Ms Rosie Collington, Researcher at the UCL Institute for Innovation and Public Purpose, provided the committee with an example of the experience in Denmark. In 2019, Denmark introduced a 50 per cent cut (over three years) on the amount that could be spent on consultants, and concurrently established an in-house public sector consultancy that was then able to do many of the tasks that other government departments had been contracting out to external consultancies.
Separating audit from consulting
6.29Several submitters stated that to avoid the conflicts of interest that are prevalent in this current system, a professional services firm cannot provide both auditing and consultancy services.
6.30Professor Allan Fels AO, professor of law and economics at Melbourne and Monash universities and former Australian Competition and Consumer Commission (ACCC) chair, submitted that:
Audit is critical to the economy and should not be compromised unnecessarily. Non-audit activities have the potential to compromise the conduct of audit. Self-regulation can't be relied upon, nor can government regulation. We therefore need legislation to break up the big four—and, in time, other audit businesses—and to prohibit audit businesses from doing consulting, advisory and other forms of business.
6.31Professor Fels contended that while a breakup may appear 'radical', it is 'far simpler and more effective than alternative methods of dealing with the conflicts of interest that inevitably arise when auditing or non-auditing is done by the sector. In fact, the industry and regulators have been edging towards separation for years'.
6.32He noted several factors add to the need for separation:
Firstly, there are already inherent conflicts of interest in doing auditing insofar as the audit firm has to report independently on the company that pays it. It's a difficult enough job without overlaying other potential conflicts of interest. Secondly, the market is highly concentrated. That means that there is a rather relaxed climate in which conflicts of interest can be accepted as the norm. The finance sector, of which auditing is a part, is particularly poor at handling conflicts of interest. Measures to resolve conflicts in this sector usually work badly in practice, are steadily eroded over time and are poorly enforced by regulators.
6.33Dr Julia Anaf, Research Fellow with the Stretton Institute, University of Adelaide, agreed with this view, arguing that auditing and consultancy practices have to be split:
There's a lot of talk about that, and there are many recommendations to say that the same firm that does auditing can't give taxation advice and consultancy advice. They have to do one or the other… there should be at least eight of these firms and they should have to compete with each other on a greater basis but not by being able to walk both sides of the street.
6.34CPI advised there has been a 'blurring of the line between audit and non-audit consultancy services' and this has led to questions regarding audit quality and independence. They noted that conflicts of interest can arise where firms provide services to the same client with conflicting functions – such as auditing, which is legally independent or investigative, and consulting, which is facilitative.
6.35They also warned that a lack of auditor independence can have 'wide-reaching implications for financial stability and accountability of institutions, with potential for broader economic and social impact' and as such, there are serious questions about whether the Big 4 should be split into separate audit and non-audit segments'.
6.36CPI provided suggestions on two ways to separate the audit and consulting parts of an organisation. The first is to create two legal entities, one for the audit practice and one for the consulting practice, ensuing that the two arms are entirely separate regarding finances and liability. The second approach suggested was to separate the two arms by employing different personnel for each area.
6.37In advocating for this approach, Professor Fels indicated that there is 'strong opposition to this proposal from the industry' and that it is unlikely to voluntarily break up, and that this would require legislation.
Redefining partnerships
6.38As discussed previously in this report, the CPI also noted the fact that the 'Big 4' are partnerships rather than incorporated companies produces transparency deficiencies, insofar as they are not subject to the reporting, compliance, and governance obligations imposed on companies by the Corporations Act 2001 and are largely outside the jurisdiction of ASIC. Consultancy firms that are partnerships are not required to lodge certain financial reports to ASIC. The disclosure of such information to the public would likely increase transparency around conflicts of interest and taxation, and consideration should be given to how this can be addressed.
6.39Additionally, while the Corporations Regulations 2001 (Cth) limits partnerships of legal practitioners to up to 400 partners, accounting partnerships are able to have up to 1,000 partners without, in its view, an adequate justification provided for this difference.
6.40Mr Adam Powick, CEO of Deloitte acknowledged that once a partnership gets above 100 equity partners, it becomes quite a complex organisation reasonably sophisticated governance and management systems and processes are required, including regulation.
6.41The committee understands that the historical basis for the partnership structure of firms which were established initially as auditing firms is due to the requirement that audits must be signed off by an individual. In this circumstance, a partnership structure appears to be more accountable than, for example, a corporate structure, which does not have the same direct personal accountability.
6.42While the committee has received a great deal of evidence in relation to the size of partnerships and the failure of their regulatory structures—and the committee agrees that this matter should be reviewed—the committee did not receive enough specific evidence in relation to this point to determine what changes to the current partnership structure of large firms would be appropriate.
The need for an independent regulator
6.43Given the current patchwork of regulation surrounding consultants, several submitters have argued that an independent regulator is needed.
6.44CPI has recommended that an independent statutory authority for consulting be established, with powers and resources to set technical and ethical standards, evaluate compliance, and impose meaningful sanctions for transgressive firms and individuals. Such an authority could take the form of a new, independent authority, or a dedicated office within an existing body, such as the Australian National Audit Office (ANAO).
6.45They suggested that the functions of such an authority in respect of consulting services provided to government could include:
setting technical and ethical standards;
monitoring and reporting on compliance with the provisions of the procurement framework, with own-motion powers to investigate reported breaches;
providing guidance to government officials on procurement-related matters including how to achieve value-for-money;
conducting analysis of trends in order to identify areas where public sector capacity should be supplemented; and
acting as a repository for outputs.
6.46Further, they noted that if there were a cap on the use of or spending on consultants, this authority could also be the body from which permission is needed to use consultants when a department has reached its cap.
6.47A similar approach was proposed by Emeritus Professor James Guthrie, AM, Professor Jane Andrew and Dr Erin Twyford. They recommended that an independent statutory body be established that has oversight of the consulting industry.
6.48Dr Erin Twyford explained that this is similar to the New Zealand model, which includes establishing a statutory authority that:
…oversees everything that's happening, taking a whole-of-government approach, which would report annually and provide transparency and also make recommendations, with the opportunity for agencies to respond as well so there's not a monologue happening.
6.49Additionally, Dr Twyford noted that the New Zealand model's authority would 'comprise public servants, and they would oversee the contracts and consulting activities in all Commonwealth bodies'. Further, there could be a performance capability framework that the authority could ensure compliance against.
6.50In considering this issue, and industry specific regulation in general, Professor Fels indicated to the committee that 'a good case has been made for having a separate regulator. Certainly, self-regulation does not work'. However, he cautioned:
…the history of industry-specific regulation in general has not been that happy because often they tend to be captured. They often identify with the interests of those they are regulating. They are often not big enough, they're not well resourced, they're not strong enough or well equipped enough to do the job. So, probably, there is a case for some kind of regulation, particularly in the light of all the problems we're hearing about, but it needs careful thought and attention as to how it's done.
New regulations and a code of conduct
6.51Throughout this inquiry, it has become clear there is no established code of conduct that applies to management consultants as a profession. This leads to a lack of alignment with the APS Code of Conduct when consultants are undertaking work for the government.
6.52Of the current system of regulation, Professor Fels said 'it doesn't seem to work in this field. It's soft, it's not very strongly enforced, it is confusing because quite a few different government entities are involved and getting evidence is a very hard job'.
6.53Emeritus Professor Guthrie, AM, Professor Andrew and Dr Twyford gave evidence that there are:
'…few enforcement measures for integrity breaches and unethical behaviour by consultants. Professional bodies, such as the accounting and legal professional associations, take limited action about the misdemeanours of their members who are partners at Big 4 consulting firms. Primarily, whistle-blowers and investigative journalists reveal conflicts of interest and unethical behaviour.
6.54Earlier in this Chapter, the APES 110 Code of Ethics was discussed, as this applies to some consultants. The committee also considered the advice from Department of Finance (Finance) that it is progressing a Supplier Code of Conduct which can be used in future contracts with consultants.
6.55However, the committee received evidence that a 'legislated, mandated code of conduct that has real teeth' is required.
6.56As mentioned above, the CPI recommended that a new regulator with appropriate powers could set the technical and ethical standards for management consultants, monitor and report on compliance and impose meaningful sanctions for transgressive firms and individuals.
6.57Dr Mark Zirnsak, Uniting Church, recommended a whole-of-government 'debarment process', giving the example of the World Bank's process, noting that it lists the companies that it has debarred from being able to get World Bank contracts because of criminal conduct and corrupt conduct. He further stated:
You want government to raise the bar and actually say, 'If you want to work with us as government, we're going to pick the ethical companies—the companies that we can trust and that we know will obey the law and, even better, operate at high ethical standards.'
6.58In making this recommendation, Dr Zirnsak noted the challenge with such a process is to actually use it.
6.59The committee also heard examples of other governments, that were able to take strong action in response to poor and unethical behaviour by consulting firms. One example provided related to Bain & Co, a Boston based global management consulting firm. The British government banned Bain & Co, from tendering for UK government contracts for three years because of its 'grave professional misconduct' in South Africa. Subsequently, the South African Treasury imposed a ten-year ban on Bain & Co from tendering for government contracts for its role in 'state capture'.
6.60The Community and Public Sector Union (CPSU) gave evidence that there is discretion under the Commonwealth Procurement Rules to exclude companies, but there is no clear service-wide policy framework for debarment and suspension. The CPSU noted that Western Australia recently introduced Australia's first debarment and suspension regime which is broad and enables the cancellation of existing contracts and has some retrospectivity. They suggested that a similar debarment and suspension regime should be developed at a Commonwealth level to be a 'strong stick to dissuade consultancies from engaging in unethical behaviour'.
Treasury consultation paper: Regulation of accounting, auditing and consulting firms in Australia
6.61While the committee was unable to ascertain the views of government departments, including Finance, on larger reforms and regulations regarding consultants, it notes that in May 2024, Treasury published a consultation paper considering some of these issues. The Treasury paper seeks stakeholder feedback and views on issues for government consideration in relation to the regulation of accounting, auditing and consulting firms.
6.62The consultation paper discusses the shared legislative framework between the Commonwealth and the States and Territories, the role of the various professional bodies and issues including transparency, enforcement powers and the protection of whistle-blowers.It also canvasses potential issues, including:
the joint governance and sharing of profits between audit partners and non-audit partners may create conflicts of interest which pose risks to auditor independence; and
the absence of legislatively enforceable ethical standards for partners of multi-disciplinary and consulting firms that are not working in the regulated industries, including audit, insolvency, financial services and tax.
6.63Further, the consultation paper provides that the following issues warrant further consideration:
the adequacy of prescribed governance requirements for large partnerships;
the adequacy of current professional standards, regulations and laws (including those relating to independence and the management of conflicts of interest);
whether the transparency requirements for accounting, auditing and consulting firms are sufficient to:
give capital markets confidence that independent audit services are delivered in accordance with prescribed laws and standards; and
enable stakeholders to obtain the information they need to inform their engagement with the firm(s).
the adequacy of regulatory enforcement capabilities and standard setting;
the protection of whistleblowers; and
competition/resilience in the audit sector.
6.64The paper also seeks feedback on a range of topics, including the current governance of companies and partnerships, whether conflicts of interest are appropriately managed and whether powers and resources dedicated to regulatory oversight are sufficient.
6.65As the committee is considering a number of these topics in this inquiry, it will keenly follow the progress of this consultation, noting that feedback has been sought by 28 June 2024 by Treasury.
Parliamentary oversight—case study
6.66The evidence to this committee demonstrates that oversight and effective management of consultancy contracts is essential to ensure that the Australian government is obtaining value for money, and that appropriate ethical standards are met. As discussed in Chapter 3, the Australian Government spent $3.272 billion on management advisory contracts in 2022-23, which represents 4.37 per cent of the total value of procurement contracts. Another area of government expenditure of similar value is major capital works.This area of expenditure is subject to parliamentary oversight through the Parliamentary Standing Committee on Public Works. The role and functions of this committee are summarised below.
Role and membership of the Public Works Committee
6.67The Parliamentary Standing Committee on Public Works (Public Works Committee) is a joint committee of the Parliament, constituted by the Public Works Committee Act 1969 (Public Works Act). Its website states:
The Committee conducts inquiries into matters referred to it by either House of the Parliament or the Governor-General pursuant to the provisions of s18of the Public Works Committee Act 1969.
6.68The following information is largely drawn from Public Works Committee Procedure Manual (Public Works Manual) that sets out its operations.
6.69The Public Works Manual observes:
All major capital works projects delivered by the Commonwealth require Parliamentary approval. The focal point of Parliamentary approval is the Parliamentary Standing Committee on Public Works (the Committee).
The Committee is established under the Public Works Committee Act 1969 (the Act) and is one of the oldest committees of the Australian Parliament. Its membership includes six Members of the House of Representatives and three Senators.
The Committee processes allow the Parliament and the community a measure of confidence that public monies are being spent on infrastructure that meets the needs of the community.
Under the Act, the Committee is required to consider the need, scope, cost, purpose and value-for money of proposed works and report to the Parliament whether or not it is advisable that the works proceed.
6.70The Public Works Manual is intended to be used by entities that are developing public works projects, alongside other resources including the Public Works Act, as they are responsible for 'determining whether the Act applies to a particular project, and if so for ensuring that they comply with their obligations'.
6.71Regarding projects that must be scrutinised by the committee, the Public Works Manual states:
The Act specifies that all public works proposed to be undertaken by, or on behalf of the Commonwealth, estimated to cost in excess of a threshold amount must not commence until:
the work has been referred to the Committee; and
the Committee has reported to the Parliament; and
House of Representatives approval has been obtained.
The current threshold amount is $15 million as set by Section 18(9)(a) of the Act. This amount is exclusive of GST, unless GST is not recoverable.
Entities should also understand that the Committee must be notified of all proposed public works projects with an estimated cost between $5 million and $15 million, including from the Department of Defence (excluding GST, unless GST is not recoverable), referred to as 'medium works'. Public works projects for defence purposes with a value of between $15 million and $75million are also required to be notified to the Committee. Public works in this category are referred to as medium works. Under certain circumstances the Committee may inquire into medium works.
Committee membership and current inquiries
6.72The Public Works Committee is a joint committee, consisting of six Members of the House of Representatives and three Senators. Allmembers are set out on the committee's website here.
6.73The Public Works Act sets out the procedures for members to be appointed, and for the Chair and Deputy Chair to be chosen. By convention, the Chair is a member of the government, and the Deputy Chair a non-government member.
6.74A list of current inquiries, completed inquiries, and other relevant information can be found on the committee's website here.
Responsibilities referrals, and inquiry processes
6.75The Public Works Committee is required to consider and report on all public works that are referred to it with regard to its terms of reference, namely:
the stated purpose of the proposed work and its suitability for that purpose;
the need for, and advisability of, the work;
the cost-effectiveness of the proposal;
if revenue-producing, the amount of revenue the work will produce if that is its purpose; and
the current and prospective public value of the work
6.76Referrals can be made through either House of Parliament, or more rarely by order of the Governor-General through the Executive Council when both houses are adjourned for a period of over one month.Referrals are coordinated by the Department of Finance's Policy and Analysis Branch, which is also a first point of contact for proponents working on a project requiring scrutiny by the Public Works Committee.
6.77Public works can be in Australia and its external territories, or overseas, and are defined in Section 5 of the Act as including:
the construction, alteration, repair, refurbishment or fitting-out of buildings and other structures (including demountable buildings);
the installation, alteration or repair of plant and equipment designed to be used in, or in relation to, the provision of services for buildings and other structures;
the undertaking, construction, alteration or repair of landscaping and earthworks (whether or not in relation to buildings and other structures);
the demolition, destruction, dismantling or removal of:
buildings and other structures;
plant and equipment; and
earthworks;
the clearing of land and the development of land for use as urban land or otherwise; and any other matter declared by the regulations to be a work.
6.78Once referred to the Public Works Committee, an inquiry is undertaken into the proposed public work. The proponent must provide two submissions, one public that sets out the proposal, and the other confidential, which contains detailed costings. In order to satisfy the above terms of reference, the Public Works Committee will:
seek public comment on the proposal [or, if more suitable, seek in- camera evidence];
hold a public hearing with the proponent entity and any other relevant bodies (individuals and/or organisations who have made comment on the proposal);
hold an in-camera hearing with the proponent entity on the project costs; and
may undertake a site inspection [at the discretion of the committee].
6.79This informs a Public Works Committee report to both Houses of Parliament on whether it is 'expedient' (appropriate) for the proposed work to proceed. Under the Act, the Public Works Committee is also able to recommend alterations to the project as it sees fit.
Parliamentary approval
6.80After the Public Works Committee has reported to both houses of Parliament, the proposed project cannot proceed until the House of Representatives has resolved and passed a motion that 'it is expedient to carry out the works'.
6.81The Public Works Committee can make any recommendations it sees fit. However, a report's final recommendation will be:
if the Committee is satisfied that the project has merit 'that the House of Representatives resolve that it is expedient that the works be carried out'; or
if the Committee is not satisfied that the project has merit 'that the work does not proceed'.
6.82Following parliamentary approval, the proponent can progress with the project.
6.83Any additional recommendations made by the committee must be addressed appropriately, if agreed to by the Government, and the Public Works Committee informed on progress of implementation. Additionally, works can be re-referred back to the Public Works Committee for further consideration; the Public Works Committee has the power to ensure any relevant earlier reports can be reconsidered and reviewed. In particular:
If after the works have been approved there are significant changes to project scope, delivery timeframe, cost, function or design, the Committee must be advised and may choose to make a further report to the Parliament on the work.
Follow-up activities
6.84It is a requirement that the proponent must update the Public Works Committee on any significant changes to the 'scope, time, cost, function or design for all projects' in writing. Additionally, entities must also report on any specific recommendations made by the Public Works Committee in its report.
6.85Within three months of completion, entities are required to submit to the Public Works Committee a post-implementation report. As with the submission made by the proponent to the committee on proposals, this includes:
a public-facing document outlining that the project was completed within the advised scope, cost and timeframe; as well as
a confidential section reviewing confidential matters such as 'risk management, contractual and consultation processes, lessons learned and user satisfaction'.
6.86The purpose of this report is:
…to enhance accountability and transparency, and to assist entities to identify any lessons learned. Over time, post-implementation reporting may also help to establish an entities' 'track record'.
6.87This report is not only considered by the Public Works Committee, but also provided to Finance for data collection and review.