Controversial APS awards should be revoked: inquiry

The searing report by the Joint Committee of Public Accounts and Audit found the public sector was too often "falling short of the high standards of professionalism required of it".

An attitude of "getting things done", even if it meant cutting corners, had become more important than abiding by the law in some cases, the committee chair, Labor MP Julian Hill, wrote in the report.

Labor, Coalition and Greens members signed off on the 11 recommendations of the inquiry, which examined whether there were systemic factors contributing to poor ethical behaviour in government agencies.

Mr Hill presented the report to the House of Representatives on Wednesday.

Among the matters examined by the committee was a controversial grants program administered by the Department of Health.

Announced in December 2018 under the then Morrison government, the $1.25 billion Community Health and Hospitals Program distributed grants to various projects in a bid to reduce pressure on community and hospital services.

A Canberra Times investigation in 2023 found nearly five years after the program was announced, just one-third of the projects were up and running.

A scathing 2023 report by the Australian National Audit Office found Health's administration of the program did not meet ethical requirements and deliberately breached the law in some cases.

Among the grants was a $4 million grant to faith-based rehab facility the Esther Foundation, which was assessed as a "suitable" project despite it being inconsistent with the grant guidelines.

"Multiple grants were recommended for funding prior to confirmation there was lawful authority, or despite knowing there was no legislative authority," the committee said of the audit.

The department failed to develop grant guidelines for seven of 108 grants, the ANAO also found.

In at least three instances this was a "deliberate decision by senior management to not comply with finance law", the report found.

The audit found a deputy secretary dismissed advice from the Department of Finance on Health's general compliance Commonwealth grants rules and guidelines, insisting "congestion busting" was in order.

This led to a series of internal performance awards that were given to officials who worked on the program, handed out on the basis of "congestion busting".

The committee said while officials may have been able to point to creating a positive team environment "where staff felt valued and rewarded for performance", the audit made "abundantly clear" that laws were broken.

Instances of breaking finance law were evident in other inquiries, the report noted.

"Frankly, the committee wishes that breaking finance law was indeed innovative and a new situation, but unfortunately the evidence in this and numerous other inquiries makes clear that it most certainly is not," the committee wrote in the report.

"What appears truly innovative in this instance, however, was that a corporate award was given for performance within a program where the law was deliberately broken."

The committee recommended that Health secretary Blair Comley formally reviews the appropriateness of the awards and considers revoking them, in particular from the senior officers involved in the program.

The committee found while there were numerous frameworks for integrity across the public sector, they largely focused on administrative and process-oriented metrics which were not sufficient to provide confidence that officers were acting with probity and ethically.

During the inquiry, the committee heard that when officials were found breaking finance laws, multiple witnesses referred to a "lack of malintent".

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Mr Hill said it was the committee's firm view any claim that an officer could breach finance law and still be acting in good faith was "clearly and unambiguously wrong".

The committee recommended Finance issues guidance to public officials that if finance laws are broken, suggesting there was no malice is not sufficient to fulfil their obligation under the Public Governance, Performance and Accountability (PGPA) Act 2013.

The committee also recommended the PGPA Act framework be amended with a requirement for entities to develop and maintain an overarching integrity framework which accountable authorities must report on.