The Politics of Accountability: ATSIC, The
Coalition Government, and Public Sector
Service Outcomes
Michele Ivanitz
Research Paper No. 9 July 1999
Centre for Australian Public Sector Management
The Centre for Australian Public Sector Management is affiliated to Griffith University's Faculty of Commerce
and Management, and its objectives are to undertake and promote research into the effectiveness and
efficiency of the public sector in Australia, and to analyse the role of the public sector in the Australian
community.
Research Project on Aboriginal Politics and Public Sector Management
The Centre's Research Project on Aboriginal Politics and Public Sector Management was established in
1995 under the direction of Professor Ciaran O'Faircheallaigh. Supported by a grant from the Australian
Research Council, the Project's general aim is to help develop an approach to management of public policies
and programs which is tailored to the specific needs, aspirations and circumstances of Aboriginal people in
Australia.
The role of the Project's Research Paper Series is to provide earlier and wider access to research findings
which will, in many cases, eventually appear in scholarly journals and books; and to stimulate exchange of
information and debate on issues relating to Aboriginal politics and public sector management.
Copies of this and other Project publications and more information on the Project can be obtained from:
Professor Ciaran O'Faircheallaigh
Faculty of Commerce and Management Griffith University
NATHAN Q. 4111
Phone: (07) 3875 7209 Fax: (07) 3875 7737
E-mail: [email protected]
The Politics of Accountability: ATSIC, The Coalition Government, and Public Sector
Service Outcomes
Michele Ivanitz
Centre for Australian Public Sector Management
Griffith University
Aboriginal Politics and Public Sector Management Research Paper No. 9
July 1999
The Author
Dr Michele Ivanitz is an ARC Research Fellow in the Centre for Australian Public Sector Management and a
lecturer in the School of Politics and Public Policy at Griffith University. Her research interests are in
Aboriginal organisational structures, accountability mechanisms, devolution of public services from
government to Aboriginal jurisdiction, Aboriginal politics, and research methods. She is the author of
numerous reports on native title, regional agreements and service devolution. Dr Ivanitz acted as a
consultant and advisor to a number of Aboriginal organisations in Canada for more than a decade and now
acts as an advisor to Aboriginal groups in Australia and Canada, including the Ngrangal-Wal Land Council,
the Foundation for Aboriginal and Islander Research Action, the National Native Title Tribunal, the Treaty
Eight Tribal Council, and the Gwich' in Tribal Council
Cover design:
Ralph Reilly
Paper Two
The Politics of Accountability: Achieving More Effective Outcomes From Public
Sector Services
Paper One
The Demise of ATSIC? Accountability and the Coalition Government
Michele Ivanitz
ATSIC has been portrayed by the Coalition government as an organisation that is not financially
accountable and, because of this, is not achieving positive service delivery outcomes for
Aboriginal people. Drawing on documentary material and fieldwork data, this article argues that
ATSIC is indeed accountable and that the Coalition is putting the accountability argument
forward as a means of justifying the dismantling of ATSIC. Given the past and recent actions
taken by the Coalition, it is unclear how much longer ATSIC will be able to survive in its current
form.
Introduction
The Aboriginal and Torres Strait Islander Commission (ATSIC) is the subject of significant debate as its role
comes under intense scrutiny by the Commonwealth government. One of the most strident debates centers
on the link between the judicious expenditure of public funds and achieving improved outcomes for
Aboriginal people. On one side of the debate, mainstream politicians are saying that ATSIC is not
accountable for the funds it receives and that more accountability is required if more positive outcomes are to
be achieved. On the other side of the debate are those who argue that ATSIC is financially accountable and
is successfully providing services to Aboriginal people in a hostile political environment1.
This paper argues that the primary concern of the Coalition government is the portrayal of ATSIC as an
unaccountable organisation to justify the dismantling of the Commission. It is not with achieving improved
outcomes for Aboriginal people.
This argument has three elements. Firstly, the Minister of Aboriginal Affairs is exercising significant decisionmaking authority which is undermining the role of the elected Board of Commissioners. Secondly, the
Coalition government continues to assert that ATSIC is unaccountable and is demanding that ATSIC be
subjected to greater financial accountability in the future, whereas ATSIC is in fact already financially
accountable. Thirdly, the government is not addressing the very real lack of accountability which exists in
Commonwealth-State relations and the obfuscation of funding pathways that is impacting on ATSIC's
capacity to deliver services to Aboriginal people. Against this background, it is unclear how much longer
ATSIC will be able to survive in its current form.
The first part of the paper outlines the initial accountability debates surrounding the creation of ATSIC. It then
discusses the structure of ATSIC and describes the representative and administrative arms and current
program divisions. The next section discusses the reach of the Minister's decision-making authority using the
1996 budget quarantines as an example. The issue of ATSIC's financial accountability is then addressed,
including the role of the ATSIC Office of Evaluation and Audit, the 1996 Special Audit, and the proposed role
for the Commonwealth Grants Commission in funding allocation decisions. Commonwealth-State
accountability issues and difficulties in tracking Aboriginal expenditure are then discussed as factors that
impact on ATSIC's ability to delivery programs and services. The next section outlines recent actions taken
by the Coalition that undermine ATSIC's policy role and the Commission's response. The conclusion of the
article assesses the future of ATSIC as an organisation.
'Something of an Amalgam': Representation, Bureaucracy and Structure
ATSIC was created by the Commonwealth government in November 1989 through the enactment of the
Aboriginal and Torres Strait Islander Act to replace the Department of Aboriginal Affairs and the Aboriginal
Development Commission, both of which had long attracted criticism for not addressing adequately the
needs of Indigenous Australians. ATSIC administers a diverse range of programs, and views itself as'...a
1
These debates are not confined to the arenas of Aboriginal affairs. They are a significant part of broader
community debates that were brought to the surface by the election of the Howard Coalition government in
1996 and by independent member Pauline Hanson. Part of Hanson's speech made in September of 1996 at
the opening of Parliament states 'We now have a situation where a type of reverse racism is applied to
mainstream Australians by those who promote political correctness and those who control the various
taxpayer funded 'industries' that flourish in our society servicing Aboriginals...Along with millions of
Australians, 1 am fed up to the back teeth with the inequalities that are being promoted by the government
and paid for by the taxpayer under the assumption that Aboriginals are the most disadvantaged people in
Australia...This is why 1 am calling for ATSIC to be abolished. It is a failed, hypocritical and discriminatory
organisation that has failed dismally the people it was meant to serve' (Commonwealth Parliamentary
Debates).
1
unique, decentralised organisation, combining representative, policy-making and administrative
elements...(and) designed to put into effect the principle of self determination for Aboriginal Australians...'
(ATSIC 1996b: 2).
ATSIC did not come into being without a tremendous amount of acrimonious debate in Parliament. When
then Minister for Aboriginal Affairs Gerry Hand first introduced the ATSIC Bill to Parliament in December of
1987, the government was subjected to relentless questioning regarding the public accountability of past and
current administration of Aboriginal affairs. Specific issues included structure and function, public
accountability, Aboriginal representation and non-Aboriginal administration, and decision-making capacities
(see Dillon 1996; Rowse 1994; Sanders 1993a, 1993b; Sullivan 1996). When Prime Minister Hawke
introduced the substantially revised legislation to Parliament in April of 1989, he assumed that his
government had found the 'right balance between the principles of self-management and of overall
ministerial responsibility' and had addressed adequately the concerns of the opposition (Commonwealth
Parliamentary Debates, H of R Vol. 166: 1325). The changes that had been made to the draft bill were not,
however, sufficient to satisfy the Coalition, the Democrats and other critics and Sanders (1993a) notes that
over the following six month period, over 91 amendments were made to the proposed legislation. Most of the
amendments had to do with public accountability.
ATSIC operates as the peak Aboriginal elected representative body while, at the time, it functions virtually as
a government department (see Ivanitz 1998; Sanders 1993b). This structure is unique in the Australian
public sector and has been described as an 'innovative structure which ambitiously attempts to combine both
representative and executive responsibilities and functions' (Dillon 1996: 89) and as 'something of an
amalgam' (Chesterman and Galligan 1997: 213). The Aboriginal representative arm has dual accountability
to both the Minister of Aboriginal Affairs through the ATSIC Act 1989 and to its Aboriginal constituents. The
administrative arm is accountable to the government, not to the elected representatives, and is 'legally
required to serve [government] purposes' (Coombs 1994: 185).
Roles undertaken by the Board of Commissioners, Regional Councils, the minister and the bureaucracy are
guided in principle by the objectives of the ATSIC Act 1989. These objectives emphasise the need to ensure
the maximum participation of Aboriginal and Islander people in the formulation and implementation of
government policies affecting them; to promote the development of self-determination and self-sufficiency; to
further Indigenous economic, social and cultural development; and to ensure co-ordination of policies which
affect Aboriginal and Islander people at all levels of government
The Representative Arm
ATSIC's representative arm consists of 35 Regional Councils grouped into 16 regional zones and the Torres
Strait Regional Authority2. Each Regional Council has a maximum of 12 elected members and elections are
held every three years. Individuals elected to Regional Councils represent the interests of their local
communities. As part of the election process, councillors in each zone elect one member to represent them
on ATSIC's national Board of Commissioners for a total elected membership of 17. The Minister responsible
for ATSIC then appoints two additional commissioners plus a chairperson for a total membership of 20. The
Board is legally required to determine financial priorities, develop budget estimates and develop annual draft
budgets for approval by the Commonwealth Minister. It is the joint responsibility of the Board and the 36
Regional Councils to develop and monitor ATSIC programs and policy at both national and regional levels.3
Each Regional Council is responsible for the formulation and revision of regional plans that are submitted
each year to the Board of Commissioners and contain the expenditure proposals for each program under
Regional Council jurisdiction. Funds are allocated by the Board of Commissioners to the ATSIC Regional
Councils, based on the recommendations of the ATSIC State offices and on the priorities laid out in the
regional plans4. Significant tensions regarding funding allocations arise between the Board of
Commissioners and the Regional Councils.
The Administrative Arm
2
It is beyond the scope of this paper to address the TSRA.
For details on the interactions between the Board of Commissioners and the Regional Councils see A MC
Annual Report, various years.
4
Planning and decision-making on expenditure priorities at the regional level is limited in scope, as a number
of items are referred to as 'Commission Items' and are excluded from Regional Council discretion (e.g.
CDEP, state grants, housing loans). In addition, there are a series of programs that are considered to
be,national' in scope and are therefore excluded from regional decision-making, such as Aboriginal Hostels
Ltd.
3
2
ATSIC's administration is staffed under the Public Service Act 1922 and is headed by a Chief Executive
Officer (CEO), a statutory officer appointed by the Minister who heads a team of Senior Executive Service
(SES) officers. The bureaucratic arm is comprised of public servants, many of which have been working in
various incarnations of Aboriginal affairs departments for many years (personal communication senior ATSIC
bureaucrat 1997). The Director of Evaluation, also a statutory officer, is a member of the SES. The
administration is divided into three tiers: the central office in Canberra, State offices in every capital city, and
27 regional offices located throughout Australia.
Current Program Divisions
As of 1997-98, there were a total of three program divisions – economic, social and cultural, and corporate
and strategic – encompassing 19 sub-programs and 22 sub-program components5. Based on these program
divisions and public policy directions, financial assistance to incorporated community organisations is
provided by ATSIC through grants to undertake activities on behalf of their communities. These funds are not
meant to supplant those provided by state governments for the general population. Nor are they meant to
replace other mainstream federal, state or local government funds from which Aboriginal populations benefit.
The appropriations for each of the program divisions in 1997-98 were as follows: economic program, $553
962 000; social and cultural program, $474 449 000; and corporate and strategic program, $128 179 000.
The Torres Strait Regional Authority was allocated $34 822 000. The total portfolio expenditure was $1 101
412 000, with program costs amounting to $820 439 660 of this total expenditure. The 1997-98 Annual
Report notes that Regional Councils administered almost 50% of this total expenditure. The Report further
notes, however, that a large proportion of this money is earmarked for two large programs and that the
6
amount of discretionary funding available to Regional Councils has declined since 1996.
The Long Arm of Ministerial Decision-Making
The ATSIC planning and budget cycles reflect mainstream budgeting processes7, although the ATSIC
Annual Reports state clearly that 'ATSIC is an independent statutory authority, not a ministerial department'.
Theoretically, the Commissioners experience relative autonomy in making decisions about the budget,
Regional Council allocations, and policy priorities for the coming year as many of the functions previously
performed by the Minister for Aboriginal Affairs were transferred to the Commission under the ATSIC Act
1989. In reality, the Commissioners autonomy is restricted as the Minister must approve the ATSIC
estimates and the form of those Estimates. The Minister also has 'a power to issue General Directions to the
Commission and Directions about the administration of ATSIC's finances' (ATSIC 1997:6).
During the 1996-1997 budget cycle, the extent of the power retained by the Minister became very clear. 'Re
Howard Coalition government made the decision to cut government expenditure by 11 per cent and ATSIC's
budget was reduced accordingly. However, the Community Development Employment Program, community
housing and inftastructure, and support for Native Title Representative Bodies, which represented
approximately two-thirds of ATSIC's program outlays, were quarantined by the Minister. The Minister
imposed the quarantine without consulting the Commissioners and it meant that the remaining one-third of
the ATSIC programs had to bear the brunt of the cuts. The Board took the decision that it was better to do a
few programs well than weaken the entire structure by trying to continue to do everything. The Community
Training Program, the Development of Industry Strategies, the Community and Youth Support Program, and
the Movement to Award Wages Program were eliminated.
The following budget year provided a 4 year funding guarantee to ATSIC. ATSIC's global budget was
increased by $60 million – $15 million per year for the guaranteed period – to accommodate new initiatives.
The Chairman noted, however, that '...the additional funds by no means offset the loss of $470 million over
the years 1996-97 to 1999-2000 announced in the 1996 budget' (ATSIC 1997: 25).
The budget cuts had wide-ranging impacts on the reconciliation process, noted by then Chairperson of
ATSIC Lois O'Donohue
5
For a detailed breakdown of sub-programs and components see ATSIC Annual Report, various years.
The 1996-97 Annual Report noted that Regional Councils administered approximately 58 per cent of
ATSIC's program budget.
7
For detail on the budget process see ATSIC Annual Report, various years; Commonwealth Department of
Finance 1996; Ivanitz 1997.
6
3
Such outcomes do not sit well with the enduring need to address the underlying causes of
Aboriginal disadvantage so forcefully identified by the Royal Commission. Small wonder, too,
that many Aboriginal and Torres Strait Islander people now seriously doubt whether the
reconciliation process can bear any fruit (ATSIC 1996b: 24).
O'Donohue did not dispute that difficult financial times call for difficult decisions on the part of government.
She did dispute the faci that the burden of those decisions was not distributed on an equitable basis within
government with full regard paid to relative disadvantage and need.
ATSIC and Financial Accountability
It is argued that 'every stage in the devolution of powers to ATSIC's Aboriginal arm has been met by
increased requirements for public accountability measures' (Smith 1996:27; see also Dillon 1992; Sanders
1993a, 1993b; Smith 1993b). Evidence of this is provided by examining role of the ATSIC Office of
Evaluation and Audit, the 1996 Special Audit called by the Coalition Goveniment into ATSIC expenditures,
and recent activities of the Minister of Aboriginal Affairs regarding the proposed role for the Commonwealth
Grants Commission in ATSIC funding allocations.
ATSIC's Office of Evaluation and Audit
ATSIC, while subject to audits undertaken by the office of the Auditor-General, is also subject to its own
internal auditing structure. ATSIC is the only independent statutory authority or Commonwealth Government
department that has its own Office of Evaluation and Audit (OEA), established under s.75 of the ATSIC Act
1989 to provide financial accountability to parliament. Section 78 provides that the Director of Evaluation and
Audit has the authority to evaluate and audit every program that is conducted or funded under the ATSIC
ACT and the operations of every office of the Commission, at least once every three years.8 The
ministerially-appointed Director of the OEA takes instructions from the minister and not from the Board of
Commissioners.
One of the outputs of the OEA is the portfolio evaluation plan, which the minister is required to submit to the
Minister of Finance annually. The evaluation strategy requires that the review and evaluation of programs
with significant policy or resource implications be identified and undertaken. The evaluations concentrate on
the outcomes from programs and administrative functions. They are comprised of impact evaluations
(primarily concerned with outcomes and whether the program is appropriate to the needs of Aboriginal
people), grant management evaluations of the Commission's grant activities (examining procedural issues
which have an impact across all programs), and efficiency and effectiveness reviews (which focus on
policies, procedures and outcomes of support functions). To date the internal audits undertaken by the OEA
demonstrate that ATSIC is financially accountable and report no significant problems in this regard,
The 1996 Special Audit
The first Cabinet meeting of the Howard Government held shortly after the 1996 election discussed the
perceived need to bring ATSIC under tighter Cabinet control and to focus on Aboriginal accountability for
public sector monies. The Coalition announced shortly thereafter the appointment of a Special Auditor to
examine the financial documentation of ATSIC-funded Aboriginal organisations. Gatjil Djerrkura notes that
this appointment, symptomatic of the strained relations between the Commission and Government, was to
determine whether or not the organisations were 'fit and proper' bodies to receive public funds (ATSIC 1997:
25),
The audit was later found by the Federal Court to be unconstitutional as the Minister did not have the
authority to direct the Commission in this way. The findings, however, are, worth noting
The Special Auditor reviewed 122 ATSIC-funded organisations and cleared ninety-five per cent of them for
funding. In those instances where non-compliance was an issue, it mainly took the form of minor technical
breaches such as the late submission of financial and management reports. In contrast, 'a 1997 survey of
company fraud showed that roughly half the 490 large Australian companies surveyed had experienced
significant fraud in the last two years' (Aboriginal and Torres Strait Islander Social Justice Commission
1997:42),
8
Detail on the specific evaluations and audits that have been undertaken is available from the OEA
4
Given these findings, it is clear that Coalition assertions regarding a lack of financial accountability in ATSIC
were unfounded.
Tensions, Dual Roles and the Commonwealth Grants Commission
Two significant tensions regarding fielding allocations exist between the Board of Commissioners and the
Regional Councils. Firstly, while the Commissioners are expected to make collective funding allocation
decisions on the basis of national priorities and budgets, each Commissioner is also a member of a Regional
Council. This means that often s/he is caught between doing what is required to satisfy the 'national interest'
while limiting the need for funding in individual regions. The second tension is in the funding allocations
themselves: they do not reflect the actual size and socio-economic needs of individual regions. What they
tend to reflect are historical patterns established by political decisions taken early in ATSIC's history. It is
therefore extremely difficult politically for individual Commissioners to take actions that would reduce the
funding flowing to their particular region. This is problematic as substantial regional socioeconomic variations
exist within the Aboriginal population and some regions are not receiving the funding they need in order to
deliver efficient and effective programs and services (see Sanders 1993a, 1993b, Smith 1993a, 1993b and
Tesfaghiorghis 1991).
Horizontal equalisation, whereby distribution principles are harmonised with fiscal equalisation based on the
differences between Regional Councils and the populations they represent, has been put forward as a partial
technical solution to this problem by the Commonwealth Grants Commission (CGC) (1993). However, there
are a number of limitations that prohibit the adoption of this approach. For example, ATSIC's limited budget,
the variable level of Aboriginal socioeconomic status between regions, the widespread lack of coordination of
government funding and service delivery in Aboriginal affairs, and inadequate mechanisms for fairly
assessing regional funding needs in the absence of any discrete funding policies make it virtually impossible
to implement an equalisation scheme (see CGC 1993; Ivanitz 1998; Sanders 1993a, 1993b; Smith 1993a,
1993b; Tesfaghiorghis 1991).
It could be expected that government would seek to address these limitations and would examine issues
such as the lack of discrete funding policies and the impact of ATSIC's limited budget on it's ability to achieve
more positive service delivery outcomes. This is not the case. Instead, the minister for Aboriginal Affairs has
introduced a bill into parliament which would give a role to the CGC in ATSIC affairs. This will involve the
CGC conducting an investigation into ATSIC operations on an 'outcome and needs' basis and having a role
in funding allocation decisions based on some sort of equalisation
scheme. At the time of writing, full details of how equalisation is to be achieved are not available. However,
the Parliamentary Secretary to the Minister of Finance has stated
...the COC Bill would ensure that indigenous funding would be distributed on a needs basis. The
Aboriginal and Torres Strait Islander people will be given opportunities to make both written and
oral submissions to the commission and to show it the magnitude of their problems (The Koori
Mail Wednesday, April 7, 1999:2).
The Minister has made it clear that this action has been taken as ATSIC is not, in the government's view,
achieving positive service delivery outcomes. No consultation was undertaken by the Minister with the Board
of Commissioners on this issue (Commission member, April 1999). If the bill is passed, it could have the
effect of further removing decision-making functions from the Commission and could significantly reduce the
role Regional Councils play in funding proposals. The bill also has the potential for removing the existing
financial allocation functions from the ATSIC Board and mainstreaming them in the COC or some other
Commonwealth body.
Commonwealth-State Accountability, Aboriginal Expenditure, and ATSIC
In considering the issue of accountability, it is critical to remember that ATSIC provides only a portion of the
total expenditure on services for Aboriginal people.9 Substantial funding is also provided by other
Commonwealth Government departments such as DETYA, State governments and Local governments. As
9
For detail on Aboriginal expenditures see the Budget papers provide by each government as well as
documents such as the Queensland Government Progress Report on Implementation of the Royal
Commission into Aboriginal Deaths In Custody 1997.
5
we will see, major problems of accountability arise in relation to expenditure of these funds. If the Coalition
government's major concern was, in fact, accountability it would be acting vigorously to deal with problems in
these areas. The states access a number of sources of funds that are used to finance programs and services
for Aboriginal people. One source is general revenue assistance provided to the states by the
Commonwealth (General Purpose Payments). The proportion of assistance provided is calculated through
the CGC's fiscal equalisation process and includes revenue factors such as disabilities. The level of
representation of Aboriginal and Torres Strait Islander people in a state's population is one of the disabilities
which is considered in the calculation (see CGC 1995; Searle 1995; Smith 1996b). However, the states have
the sole right to determine how funds will be spent and the level, quality and distribution of programs and
services and, as noted by Smith (1996b:9) '[i]f a State ...decides to offer a lower-than-average national
standard level of service to all its citizens or to certain groups of citizens or to certain geographic locations, it
has the constitutional right to do so'. In other words, the current arrangements in place between the
Commonwealth and the states can allow the states to escape their obligations to Aboriginal people.
The Social Justice Commissioner, ATSIC, and the Council for Aboriginal Reconciliation have stressed the
point that Commonwealth and state governments are failing to provide Aboriginal people with access to
levels of service acceptable to the non-Aboriginal population in areas of health, education, housing and
employment. This failure results in duplication of efforts and overlapping responsibilities as ATSIC attempts
to provide adequate funding to Regional Councils to support the services to Aboriginal communities that are
not being provided by Commonwealth and state governments. This results in poor service delivery outcomes
as resources are simply stretched too thinly.
The lack of accountability on the part of state governments in providing services to Aboriginal people through
general purpose grants is only one half of the equation (see Ivanitz 1999; Joint Committee of Public
Accounts 1995; Sanders 1995; Smith 1996a, 1996b). The other half is the multiplicity of specific purpose
payments flowing between government agencies operating at different levels of government in similar policy
areas.
Specific purpose payments (SPPS) are paid mainly to state governments by the Commonwealth to fund
activities on the condition that certain performance and accountability criteria are met. While these grants
10
have traditionally had conditions attached, ( these conditions are seldom reported on by the states and it
would appear, in some cases, that SPPs are treated as substitute general purpose funding. Auditors-General
have noted that while the arrangements for almost all SPPs require adequate assurance to be provided by
the state that Commonwealth funds are being expended on intended purposes (such as Aboriginal Housing
programs), consistent delays in the provision of statements of expenditure and independent certification
indicate a failure of accountability.11 The issue that is not addressed, however, is that the Aboriginal people
who are intended to benefit from the SPP funded services are not benefiting as they are not receiving the
services.
In summary. while a large part of funds earmarked for Aboriginal service provision flow through the states,
the Commonwealth has an ongoing problem of ensuring state cooperation and financial and performance
accountability in the administration, management and acquittal of tied grants, such as Aboriginal-specific
SPPs. Further, the Commonwealth has no authority over the expenditure of general purpose payments. As
there appears to be little compelling the states to comply with proposals for reform, it is questionable whether
any change in this situation is imminent. The behaviour of the states poses a problem for ATSIC in terms of
inadequate service provision, duplication and cost inefficiencies, and the total obfuscation of actual
expenditure. This results in duplication of efforts and overlapping responsibilities as ATSIC attempts to
provide programs and services to Aboriginal people that are in reality the responsibility of the state.
Another problem arises when the highly visible expenditure on Aboriginal people, although Commonwealth
State Aboriginal affairs portfolios is combined with slightly less visible expenditure through Aboriginal-specific
program elements in mainstream portfolios, and the 'largely invisible inclusion of Aboriginal people in
10
The Joint Committee of Public accounts notes that a very small number of SPPs paid to the states that are
not subject to expenditure conditions by Parliament. They are typically revenue sharing arrangements or
compensation either for the transfer of programs, or for other Commonwealth action. An example is the
Compensation-Companies Regulation (Foregone Revenue Payments) SPP.
11
Smith (1996a) is of the view that since the early 1970's SPPs have been increasingly used by the
Commonwealth to directly fund functions that are, or are interpreted to be, areas of joint responsibility. He
also notes that SPPs have been used by the Commonwealth to influence areas over which the
Commonwealth has no jurisdictional power. This perception held by the States may have some impact on
the recalcitrance with which the States meet accountability requirements (see also Auditor-General of
Australia 1991, 1994, 1995).
6
mainstream programs of mainstream portfolios' (Sanders 1993a; see also Smith 1992). ATSIC's ability to
track expenditure pathways for Aboriginal programs within this context is virtually non-existent as
Typically, governments have no clear overview of the total state funding situation, let alone that
for a regional of specific Aboriginal community...no mechanisms whereby data relating to state
expenditure on programs for Aboriginal people are comprehensively disaggregated...it is not
possible from published documents to trace Commonwealth or State Government expenditure
for a range of budgetary functions down to individual communities (Smith 1992: 1).
The end result is that it is very difficult, if not impossible, to determine actual program and service delivery
and Commonwealth/State expenditure on Aboriginal affairs, and to link this expenditure with outcomes. This
obfuscation makes ATSIC an easy target for government in assigning culpability for poor service delivery
outcomes and, if the Coalition government was serious about improving service delivery outcomes for
Aboriginal people, it would do something about it.
Deteriorating Relationships: ATSIC and the Coalition
In the 1996-97 Annual Report the ATSIC Chairman expressed a hope that the coming year would see a
significant improvement in relations between the Coalition government and the Board of Commissioners.
One year later, the 1997-98 Annual Report noted that not only did relations not improve, they had become
significantly worse as the Coalition appeared to no longer consider ATSIC to be a primary source of policy
advice. In March of 1998 the ATSIC Board passed a motion of 'no confidence' in the Minister of Aboriginal
Affairs. The immediate trigger for the vote of no confidence was a series of proposals made by the Minister
that would have directed to Board to transfer $29m from the Community Housing and Infrastructure program
to the Torres Strait Regional Authority and a further $30m from Community Housing and Infrastructure to the
Commercial Development program. Further, the Minister also wanted to transfer 'significant funds out of the
Commission's budget to establish an Office of Indigenous Policy' (ATSIC 1998:19). These proposals
involved no prior consultation with the Board of Commissioners. This situation was exacerbated by the
Governments conduct in the debate over amendments to the Native Title Act as '[alt the critical stage the
Government failed to consult with the Board, its principal Indigenous policy adviser and the elected
representatives of the people most affected by the amendments. In contrast, industry groups were afforded
much greater access' (ATSIC 1998:16).
In spite of the strenuous objections of the Board of Commissioners, the proposed financial transfers, while
eventually reduced ($15m, $10m and $7rn respectively), went ahead thereby eliminating $32m from the
ATSIC Community Housing and Infrastructure program.
The transfer of $7m to the newly-created Office of Indigenous Policy within the Department of Prime Minister
and Cabinet is significant in its own right. The Board made it clear to the Minister that ATSIC wished to
remain the principal source of policy advice to government, but this would depend on government accepting
the right of indigenous Australians to have their own points of view (1998:25), and that instead of challenging
ATSIC's role as a policy-making body, government should understand and accept that role. The Chairman
argued that the government has not done so and that the Office of Indigenous Policy will greatly 'undermine
ATSIC's role as the principal adviser to government on Aboriginal and Torres Strait Islander affairs12. It is
also noteworthy that, out of a staff compliment of 42, only two people working in the Office of Indigenous
Policy are Indigenous.
Conclusion
The evidence indicates that the primary concern of the Coalition government is the dismantling of ATSIC,
rather than achieving improved service delivery outcomes for Aboriginal people. The Minister has usurped a
significant amount of decision-making authority from the ATSIC Board of Commissioners and has taken
steps to mainstream financial decision-making authority and policy advice. Further, the Coalition
government, as well as other mainstream conservative politicians, refuses to accept that ATSIC is financially
12
Land Rights Queensland notes that the Minister's spokesman did say that ATSIC was still the main source
of policy advice as it is 'providing 10 times as many briefs to the Minister daily as OIP' (April 1999) and that
the Office is to provide a 'whole of government approach'. Chairman Djerrkura has noted, however, that the
Minister now uses the OIP for all its advice and less of ATSIC, which is the 'main vehicle for Indigenous
Australians to exercise our voice and opinion in the political arena'.
7
accountable. The government is also unwilling to take action to eliminate the lack of accountability in
Commonwealth-State fiscal arrangements and clarify funding pathways, both of which lead to poor service
delivery outcomes for Aboriginal people and confuse lines of accountability. Further, the Coalition
government will not acknowledge that ATSIC is filling the service delivery gap that occurs when
Commonwealth and State governments fail to provide services to Aboriginal people.
Will ATSIC survive if the Coalition government continues on its present course? In the view of the current
Chairman of the ATSIC Board, the answer is 'no'. In a recent interview with the Koori Mail, Gatjil Djerrkura
expressed his grave fears for the survival of the organisation in its present form as ATSIC is losing 'more and
more functions...at the end of the day, they will say, all the functions have gone from ATSIC, there is no need
for ATSIC any more, close shop' (April 7,1999).
8
References Cited
Aboriginal and Torres Strait Islander Social Justice Commission (1997), Aboriginal and Torres Strait Islander
Social Justice Commissioner Fifth Report, (Sydney: J.S. McMillan Printing Group).
ATSIC (1996a) Annual Planning Cycle, (Canberra: Australian Government Publishing Service).
ATSIC (1996b) ATSIC Annual Report 1995-1996. (Canberra: Australian Government Publishing Service)
ATSIC (1997) ATSIC Annual Report 1996-1997. (Canberra: Australian Government Publishing Service).
ATSIC (1998) ATSIC Annual Report 1997-1998. (Canberra: Australian Government Publishing Service).
Auditor General of Australia (1991) Specific Purpose Payments to and through the States and Northern
Territory, Audit Report No. 18. (Canberra: Australian National Audit Office).
Auditor General of Australia (1994) An Audit Commentary on Aspects of Australian Commonwealth-State
Agreements, Audit Report No. 6. (Canberra National Audit Office).
Auditor General of Australia (1995) Specific Purpose Payments to and through the States and Territories,
Audit Report No 2 1. (Canberra: Australian National Audit Office).
Chestennan, J. and B. Galligan (1997) Citizens Without Rights. (Cambridge: Cambridge University Press).
Commonwealth Department of Finance (1996) The Budget Process Training Course, (Canberra: Australian
Government Publishing Service).
Coombs, H.C. (1994) Aboriginal Autonomy: Issues and Strategies (Cambridge: Cambridge University Press).
Dillon, M. (1992) 'Program Evaluation and Monitoring in Aboriginal and Torres Strait Islander Affairs: A
Strategic Overview' in C O'Faircheallaigh and B Ryan (eds). Program Evaluation and Performance
Monitoring. (Melbourne, Macmillan).
Dillon, M. (1996) 'Institutional Structures in Indigenous Affairs: The Future of ATSIC' in P. Sullivan (ed)
Shooting the Banker. (Darwin: North Australian Research Unit).
Ivanitz, M. (1998) Straddling Two Worlds: ATSIC and the Management of Indigenous Policy, Research
Paper No. 6. (Brisbane: Centre for Australian Public Sector Management).
Ivanitz, M. (1999) 'The Politics of Accountability: Achieving More Effective Outcomes from Public Sector
Services', in Australian Journal of Public Sector Management, 1999 (in press).
Joint Committee of Public Accounts (1995) The Administration of Specific Purpose, Payments: A Focus on
Outcomes Report 342. (Canberra: Parliament of the Commonwealth of Australia).
Rowse, T. (1994) 'Aborigines: Citizens and Colonial Subjects' in J. Brett, J. Gillespie and M. Goot (eds)
Developments in Australian Politics. (Melbourne: Macmillan).
Sanders, W. (1993a) Rethinking the Fundamentals of Social Policy Towards Indigenous Australians: Block
Grants, Mainstreaming and the Multiplicity of Agencies and Programs Discussion paper No. 46. (Canberra:
Centre for Aboriginal Economic Policy Research).
Sanders, W. (1993b) Reconciling Public Accountability and Aboriginal Self- Determination/Self-Management:
Is ATSIC Succeeding?, Discussion Paper No. 51. (Canberra: Centre for Aboriginal Economic Policy
Research).
Sanders, W. (1995) Australian Fiscal Federalism and Aboriginal Self-Government: Some Issues of Tactics
and Targets, Discussion Paper No. 90. (Canberra. Centre for Aboriginal Economic Policy Research).
Searle, R.J. (1995) The Commonwealth Grants Commission and Funding of Regional Agreements, Paper for
the ATSIC Regional Agreements Seminar, Cairns, 29-31 May, Canberra.
9
Smith, B. (1996a) Commonwealth/State Relations: Current Issues of Delivery of ATSIC Programs and
Services, Research Discussion Paper No. 5. (Canberra: Australian Institute of Aboriginal and Torres Strait
Islander Studies).
Smith, B. (1996b) Commonwealth/State Relations: Some Historical Background, Research Discussion Paper
No. 6. (Canberra: Australian Institute of Aboriginal and Torres Strait Islander Studies).
Smith, D.E. (1992), Estimating Northern Territory Government Program Expenditure for Aboriginal People:
Problems and Implications, Discussion Paper No. 30. (Canberra: Australian Institute of Aboriginal and
Economic Policy Research).
Smith, D.E. (1993a) ATSIC's Mechanisms for Resource Allocation: Current Policy and Practice, Discussion
Paper No. 41. (Canberra: Australian Institute, of Aboriginal and Economic Policy Research).
Smith, D.E. (1993b) The Fiscal Equalisation Model.. Options for ATSIC's Future Funding Policy and Practice,
Discussion Paper No. 3 0. (Canberra: Australian institute of Aboriginal and Economic Policy Research).
Smith, D.E. (1996) 'From Cultural Diversity to Regionalism' in P. Sullivan (ed). Shooting the Banker. (Darwin:
North Australia Research Unit).
Sullivan, P. (1996) Shooting the Banker. (Darwin, North Australia Research Unit).
Tesfaghiorghis, H. (1991) Geographic Variations in the Socioeconomic Status of Aboriginal People: A
Preliminary Investigation, Discussion Paper No. 2. (Canberra: Centre for Aboriginal Economic Policy
Research).
10
Paper Two
The Politics of Accountability: Achieving More Effective Outcomes From Public
Sector Services
Michele Ivanitz
There is wide recognition that the conventional financial approach to Aboriginal accountability
taken by governments in Australia is not meeting the goals of effective public sector service
delivery in Aboriginal communities. Drawing on fieldwork data, this article argues that forms of
accountability based on Aboriginal political structures, Aboriginal forms of control, and sanctions
generated within the Aboriginal community need to be considered in achieving improved service
delivery goals of both government and Aboriginal communities. This article is going to discuss
the political requirements for this to happen.
Introduction
Australia is currently engaged in a vigorous and at times acrimonious debate pertaining to the issue of
Aboriginal accountability for public sector funds. On one side of the debate, politicians are saying there is not
enough financial accountability in Aboriginal Affairs and we need to have more. The other side of the debate
argues there is 'too much' of the 'wrong type' of accountability.
A basic point to establish is that there is not one, but two accountability foci in the management of Aboriginal
affairs. One is external to Aboriginal communities (primarily concerning the financial accountability of public
monies to governments referred to as 'mainstream' accountability). The other is internal to Aboriginal
communities themselves (referred to as 'Aboriginal accountability') and is not generally recognised by
politicians.
This paper will argue that there is a definite lack of accountability in Aboriginal affairs but it isn't where
politicians are saying it is. Firstly, there is no lack of accountability per se in the Aboriginal and Torres Strait
Islander Commission (ATSIC). Secondly, there is a specific lack of accountability which affects Aboriginal
Affairs; however, it is in Commonwealth-State fiscal arrangements and not in Aboriginal organisations.
Thirdly, there is another problem in that emphasis is placed by government on the wrong sort of
accountability in Aboriginal organisations and valid alternative approaches are not considered.
It is feasible to develop and apply alternative forms of accountability that will cross the divide between the
two existing forms. These alternative forms can be derived and refined through combining relevant analytical
frameworks with cases of good practice.
The first section of the paper provides a context to the 'politics of accountability' by addressing the debate
surrounding ATSIC, the lack of accountability in State- Commonwealth reporting of Aboriginal specific
purpose payments (SPPs), and the obfuscation of funding pathways. The meaning of 'accountability' in
mainstream contexts as opposed to Aboriginal cultural contexts is then considered. The next section puts
forward an analytical framework that could be used as a starting point in deriving alternative approaches to
accountability. The conclusion of the paper discusses the need to reconcile Aboriginal and mainstream
accountability.
The 'Politics of Aboriginal Accountability' and ATSIC: When is Enough Too Much?
Aboriginal organisations are often subjected to more stringent accountability requirements than are
mainstream organisations. A particularly noteworthy case is that of ATSIC's accountability processes. ATSIC
was created by the Commonwealth Government in November 1989 through the enactment of the Aboriginal
and Torres Strait Islander Act to replace the Department of Aboriginal Affairs and the Aboriginal
Development Commission. When the then Minister of Aboriginal Affairs Gerry Hand first introduced the
ATSIC Bill to Parliament in December of 1987, the government was subjected to relentless questioning
regarding the public accountability of past and current administration of Aboriginal Affairs (see Dillon 1996;
Rowse 1994; Sanders 1993a, 1993b; Sullivan 1996). When Prime Minister Hawke introduced the
substantially revised legislation to Parliament in April of 1989, he assumed that his government had found
the 'right balance between the principles of self-management and of overall ministerial responsibility' and had
addressed adequately the concerns of the opposition (Commonwealth Parliamentary Debates, H of R Vol.
21 166:1325). The changes that had been made to the draft bill were not, however, sufficient to satisfy the
Coalition, the Democrats and other critics. Sanders (-1993a) notes that over the following six month period,
over 91 amendments were made to the proposed legislation. Most of them pertained to public
accountability1. It has been noted that 'every stage in the devolution of powers to ATSIC's Aboriginal arm has
1
ATSIC provides funds to Aboriginal communities that would flow directly from the federal and state
governments if the communities were non-Aboriginal. These funds are not meant to supplant funds provided
1
been met by increased requirements for public accountability measures' (Smith 1996:27; see also Dillon
1992; Smith 1993; Sanders 1993a, 1993b)
While subject to audits undertaken by the office of the Commonwealth Auditor-General, ATSIC is also
subject to its own internal auditing structure, ATSIC is the only independent statutory
authority/Commonwealth Government Department that has its own Office of Evaluation and Audit (OEA'
established under s75 of the ATSIC Act Section 76 provides for the evaluation and audit of the Commission
itself, Aboriginal Hostels Ltd., the Aboriginal and Torres Strait Islander Commercial Development Corporation
and the Torres Strait Regional Authority. Particular aspects of these bodies can also be evaluated and
audited2. Section 78 provides that the Director of Evaluation and Audit has the authority to evaluate and audit
every program that is conducted or funded under the ATSIC Act 1989 and the operations of every office of
the Commission, at least once every three years.
The role of the OEA is to provide financial accountability to Parliament. The office is headed by a ministerially
appointed Director. The Director takes instructions from the Minister and is required to report in writing both
to the Minister and the Board of Commissioners. The issue of accountability has received even greater
attention since the Coalition Government returned to power in 1996. The first Cabinet meeting of the Howard
Government discussed ATSIC and the need to bring it under tighter Cabinet control and focus on Aboriginal
accountability for public sector monies. The Coalition announced
shortly thereafter the appointment of a Special Auditor to examine the financial documentation of ATSICfunded Aboriginal organisations. Gatjil Djerrkura notes that this appointment, symptomatic of the strained
relations between the Commission and Government, was to determine whether or not the organisations were
"fit and proper" bodies to receive public funds (ATSIC 1997:25)3. Mick Dodson, then Chairman of the
Aboriginal Social Justice Commission, was more direct in his assessment of this appointment
The sub-text was that black babies are dying in 1997 because black bureaucrats are
squandering taxpayers' money meant for health services to buy four wheel drives and take off
on overseas jaunts. The implication is that if Indigenous peoples could be made accountable,
the perennial problems of Indigenous affairs would be solved. Rarely is the link made to the
mainstream government departments which are, in fact, responsible for the health and welfare
of all Australians (Aboriginal and Torres Strait Islander Social Justice Commission 1997:42).
The audit was later found by the Federal Court to be unconstitutional as the Minister did not have the
authority to direct the Commission in this way. The findings, however, are worth noting.
The Special Auditor reviewed 1 122 ATSIC-funded organisations and cleared ninety-five per cent of them for
funding. In those instances where non-compliance was an issue, it mainly took the form of minor technical
breaches such as the late submission of financial and management reports. The Social Justice
Commissioner noted that "In comparison,. a 1997 survey of company fraud showed that roughly half the 490
large Australian companies surveyed had experienced significant fraud in the last two years" (Aboriginal and
Torres Strait Islander Social Justice Commission 1997:42).
ATSIC used this process to its advantage and undertook to enhance grant administration reform, which was
already underway prior to the appointment of the Special Auditor. The urgency of reform is clear when local
level community reality is brought into the picture. Often organisations employing a single worker are
expected to meet the needs of an entire community, because the mainstream responsible service providers
do not. it is the experience of the author that when situations like this occur, organisations often collapse
under the strain owing to issues of capacity, decision-making, and/or leadership. Further, individuals
themselves often collapse because they burn-out for reasons ranging from exhaustion to significant family
pressures. Commissioner Dodson observes that
...it is these under-funded, over-burdened, and ambiguously constituted organisations that are
held up as examples of self-determination. So when they find themselves operating in an
untenable situation or fail to deliver what all Australian governments put together have failed to
achieve, we are told that self- determination is the wrong approach (1997:41).
by state governments for the general population. Nor are they meant to replace other mainstream federal,
state or local government funds from which Aboriginal populations benefit.
2
For detailed outlines of program structures and audit procedures, see ATSIC 1996, 1997, 1998b.
3
Smith (1996b) points out that the Coalition Government has ignored the lack of accountability of the State
Governments in the area of Aboriginal services, discussed later in this paper.
2
Interviews with government officials, residents of both Aboriginal and non-Aboriginal communities, and
mainstream service providers demonstrate a widespread misunderstanding of the role of ATSIC. The
perception exists that ATSIC replaces mainstream services that governments are obliged to provide to
Aboriginal people. Interviews also indicate that the very existence of ATSIC is often used as an excuse to
justify a lack of service provision in Aboriginal communities. Both of these perceptions are refuted by the
chairman of ATSIC who argues that
Mainstream service delivery agencies need to be reminded that indigenous people have as
much right to their services as other Australians. It is simply not valid for service providers to
assume that, if they ease off on the provision of a particular service to our communities, the
slack will be taken up by ATSIC. ATSIC is now hard pressed trying to meet its core obligations
as a program provider, a source of policy advice and a monitor of program delivery to ATSIC
people. It is certainly not in a position, either through its legislative charter or in terms of
capacity, to fill gaps left by mainstream providers at either the State or Commonwealth level
(ATSIC 1998b:13).
The following section illustrates the second point of this paper, namely the lack of accountability for
Aboriginal-specific funds between Commonwealth and State governments.
Where is All the Money Going? Commonwealth/State Accountability
Issues relating to accountability and service delivery outcomes extend beyond the realm of Aboriginal
organisations such as ATSIC. They extend into Commonwealth-State fiscal relations, the politics of
accountability in this area, and the impacts of the lack of accountability on service delivery on Aboriginal
Australians.
The intersection of mainstream accountability mechanisms and commonwealth-state relations has a
substantial influence on Aboriginal services. In a federated system, there are a number of policies impacting
on Aboriginal affairs at both federal and state levels of government and, as Davis et al. note, '(w)here
programs are based on a division of both political powers and financial resources there are going to be
hiccups' (1993..68). Often the goals and objectives of these policies conflict. Arguments ensue between
levels of government, departments and within departments or branches within departments as each has its
own isolated view of Aboriginal affairs. Policy guidelines are, for the most part, developed in isolation of the
people they are intended to serve and have little relevance to Aboriginal circumstances. With the exception
of the limited role ATSIC plays in policy development, a significant amount of 'Aboriginal' policy is developed
by predominantly non-Aboriginal male bureaucrats in government offices. The approach taken is reflective
more of 'we have a good idea so let's do it' rather than reflective of actual community needs that are derived
from participatory mechanisms of consultation (see Ivanitz 1998).
Further, both levels of government provide a myriad of programs, services, and fiscal resources resulting in
service duplication in some cases, an absence of service provision in others, and conflicting reporting
requirements. Smith, for example notes that mainstream programs can take a number of different forms with
respect to their objectives and service delivery mechanisms. Some have no specific Aboriginal focus, dealing
with all clients on the same access basis. Others have specific Aboriginal elements that may or may not be
delivered by the same agency. Complicating transparency is the multiplicity of funding agencies that provide
programs and services to Aboriginal peoples through mainstream activities. Sanders (1993a) observes that
the highly visible expenditure on Aboriginal people through Commonwealth and State Aboriginal affairs
portfolios is combined with slightly less visible expenditure through Aboriginal-specific program elements in
mainstream portfolios, and the largely invisible inclusion of Aboriginal people in mainstream programs and
mainstream portfolios.
There also exists a lack of transparency in the funding arrangements between federal and state governments
pertaining to Specific Purpose Payments (SPPs), some of which are targeted specifically to Aboriginal
programs. Although SPPs are made mainly to State governments by the Commonwealth to fund activities on
4
the condition that certain performance and accountability criteria are met , these conditions are seldom
reported on by the States (see Auditor-General 1991, 1994, 1995; Joint Committee of Public Accounts
4
The Joint Committee of Public Accounts (1995) notes that a very small number of SPPs paid to the state
are not subject to expenditure conditions by Parliament. They are typically revenue sharing arrangements or
compensation either for the transfer of programs, or for other Commonwealth action. An example is the
Compensation-Companies Regulation (Foregone Revenue Payments) SPP.
3
1995). Auditors-General have noted that while the arrangements for almost all SPPs required adequate
assurance to be provided by the State that Commonwealth funds are being expended on intended purposes,
consistent delays in the provision of statements of expenditure and independent certification indicate a failure
of accountability5. Reports have noted that improvements are required in the provision of statements and
expenditure certifications, reporting to Parliament, and the collection and use of data. There is also a need
for formal arrangements that include program goals, performance indicators, targets, and sanctions to
facilitate the management of SPPS.
While the Commonwealth provides the bulk of States' revenue, it has an ongoing problem of ensuring State
cooperation and financial and performance accountability in the administration, management and acquittal of
tied grants such as SPPS. In reality, there appears to be little compelling the States to comply with reforms.
The outcome is inadequate service provision and cost inefficiencies. This further results in duplication of
efforts and overlapping responsibilities as ATSIC attempts to provide programs and services to Aboriginal
people that are in reality the responsibility of the State (Ivanitz 1998). Moreover
Typically, governments have no clear overview of the total state funding situation, let alone that
for a regional or specific Aboriginal community...no mechanisms whereby data relating to state
expenditure on programs for Aboriginal people are comprehensively disaggregated...it is not
possible from published documents to trace Commonwealth or State expenditure for a range of
budgetary functions down to individual communities (Smith 1992: 1).
Complicating matters are the specific reporting requirements attached to each federal and state program.
Often these requirements conflict making it difficult for organisations to operate in a coherent and consistent
manner as they attempt to reconcile conflicting priorities and deal with a myriad of programs, services, and
fiscal resources provided by both levels of government.
These factors result in a failure on the part of government to provide Aboriginal communities with the same
levels of service as those provided to non-Aboriginal communities, thereby contributing to the continued
disadvantaged state of Aboriginal Australians.
What Does Accountability Mean? Mainstream Practice and Aboriginal Reality
The lack of transparency in government funding pathways makes it virtually impossible to track Aboriginal
expenditure and link those expenditures to outcomes. A further problem arises from the fact that the only
measures of accountability used by government are based on the narrow application of mainstream audit
procedures and accounting standards. As such, it is often difficult to get a clear picture of the links between
expenditure and outcomes at the community level as other forms of accountability are not taken into
consideration.
'Mainstream 'Practice
Accountability as defined in the mainstream means 'the responsibility to provide information to enable users
to make informed judgements about the performance, financial position, financing and investing, and
compliance of the reporting entity' (Statement of Accounting Concepts SAC2 "Objective of General Purpose
Financial Reporting" 1990:1). Compliance is defined as 'adherence to those statutory requirements,
regulations, rules, ordinances, directives or other externally-imposed requirements in respect of which noncompliance may have, or may have had, a financial effect on the reporting entity' (1990:1).
Audits are conducted to determine financial compliance. As such they require structured, specific,
quantitative approaches to evaluation in order to ensure corporate governance requirements (Gul et al 1995;
Godfrey et al 1997; Parker and Hopp 1998; see also Aboriginal and Torres Strait Islander Commission
1997). Financial records are to be examined with total dispassion and non-financial elements eliminated from
consideration as weaknesses are reported and recommendations provided. This prevents an auditor from
taking alternative views of the operation or management of systems into account (see for example
5
Smith (1 996a) argues that since the early 1970s, SPPs have increasingly been used by the
Commonwealth to directly fund functions that are, or are interpreted to be, areas of joint responsibility. He
also notes that SPPs have been used by the Commonwealth to influence areas over which the
Commonwealth has no jurisdictional power. This perception held by the States may have some impact on
the recalcitrance with which the States meet accountability requirements. This is an issue that warrants
further research.
4
Dittenhoffer 1988; McNamee and McNamee 1995; Peirson 1998; Wood and Wilson 1989). As a result they
do not take into account the context in which Aboriginal communities operate (Aboriginal and Torres Strait
Islander Social Justice Commission 1997).
Many Aboriginal organisations experience ongoing difficulties in coming to terms with the minimum
standards needed to satisfy accountability and compliance requirements as defined above. Aboriginal
Councils6 in particular have received qualified audits owing to inadequate or non-existent accounting records
and documentation; ineffective controls or management processes to ensure that expenditure was only
incurred for purposes related to the lawful functions of the Council; poor procedures for the raising, collection
and bringing to account of revenues; and inadequate control of trading activities and associated monies
(Parliamentary Committee of Public Accounts 1991, 1992, 1993; Queensland Audit Office 1996, 1998).
Over recent years, the Queensland Audit Office has regularly made recommendations designed to assist
Councils in establishing more effective mainstream financial management processes based on practical and
clearly defined strategies for overcoming the basic problems confronting them. The Auditor-General also
noted that Aboriginal Councils had the determination to succeed in a 'financial management and
accountability sense' as they were making best efforts to implement recommendations and were participating
in mainstream accountability initiatives such as the Financial Accountability improvement Program
(Queensland Audit Office 1998). However, a number of Aboriginal Councils continue to experience
significant difficulties in implementing the recommendations of the government reports as the
recommendations singularly apply mainstream practice in a cultural environment where 'accountability'
operates on both mainstream and Aboriginal 'levels' (see Parliamentary Committee of Public Accounts 1996;
Queensland Audit Office 1996, 1998).
Mainstream Accountability and Aboriginal Reality
In 'traditional' Australian Aboriginal society, it is highly unlikely that practices analogous to mainstream
accountability existed as financial resources brought 'in' from outside the group were not held in trust for the
benefit of that group. Further, the concept of a mainstream 'organisation' that delivered particular goods and
services to its' members did not exist. In contemporary Australia, however, Aboriginal bodies are viewed by
the mainstream as representing their communities and regions, making decisions on behalf of their
members, and receiving public monies, and they should therefore comply with mainstream financial
accountability requirements.
Fieldwork data demonstrate that Aboriginal leaders and program managers do not dispute the need to
comply with mainstream financial reporting requirements7. What they do dispute is the notion that Aboriginal
approaches to accountability do not exist, and they argue that approaches extend beyond reporting on
financial management.
Aboriginal program managers often 'live with their jobs' and 'take them home with them'. They are
simultaneously accountable to their organizations and to the rest of the community members. As Aboriginal
culture is based on holism, it becomes virtually impossible for program managers to separate the economic
realm of mainstream financial accountability from the social/political/spiritual realms that make up Aboriginal
organisational culture and community life. They are embedded in kin relations, have attachments to
particular geographic areas and to other traditionally-embedded groupings, and are associated with
particular political bodies and factions which lobby stridently for access to scarce resources. These relations,
attachments and associations are embedded within specific sets of rights, obligations, and fluid allegiances8
(Finlayson 1998; Martin 1997; Martin and Finlayson 1996) thereby making it virtually impossible to separate
financial accountability from local level politics, social obligations, and spiritualism.
6
Aboriginal Councils are constituted under the Queensland Community Services (Aborigines) Act 1984 and
receive funding from both Commonwealth and State agencies. Since the constitution of the Aboriginal
Councils the Queensland Audotir-General has reported significant and continuing audit deficiencies with
respect to the Councils. These concerns prompted the Queensland Public Accounts Committee to launch an
inquiry into the financial administration of Aboriginal Councils. The final report was presented to Parliament in
1996.
7
7This section is based on interviews with Aboriginal political leaders, community and government service
croviders, service recipients, program administrators, and auditors.
8
See for example Aboriginal and Torres Strait Islander Social Justice Commission 1997; Bennett 1989;
Berndt 1965; Coombs 1994; Eikin 1954; Hiatt 1965; Howard 1982; Ivanitz 1998; Maddock 1982; Rowse
1992; Sanders 1993b; Strehiow 1970; Tonkinson and Howard 1990.
5
This creates major problems 'on the ground' as the sole or dominant emphasis on Aboriginal accountability
to 'external' authority means that no consideration is given to the unique circumstances of each community
and each community organisation. Aboriginal managers and administrators interviewed see their primary role
as providing culturally appropriate services to their clients according to local protocols. These local protocols
often take priority over line budget items as the mainstream funding restrictions prevent the delivery of
appropriate services.
To illustrate this point, it may be considered more important for the leader of a community to provide, for
example, a motor for someone's boat than it is to ensure that mainstream auditing requirements are met.
The boat motor enables the individual to feed his family or earn a living. The money to purchase the goods
may have come from an existing health program budget. The rationale for the purchase is that if an individual
is earning a living and is a productive member of a community, there will be less use of the medical system
and no use of government transfer payments in the form of social welfare. The logic of the decision for the
purchase of the boat motor is sound from an Aboriginal cultural perspective: meaningful employment
resulting in a self-sufficient family and better health. The leadership is therefore considered by community
members to be accountable. However, the government acquittal process views this type of action as an
'inappropriate capital expenditure' and, while improved outcomes are achieved, the organisation is found to
be in breach of its grant9. From a mainstream perspective, the leadership is not accountable.
Another example of the existence of Aboriginal approaches to accountability is found at the level of
community reporting when mainstream accountability requirements are often 'reinterpreted' to accommodate
Aboriginal understandings of what 'accountability' means. Many Aboriginal community organisations
administer large social program budgets. Community members have objectives they need to meet in order to
achieve measures of social justice and they hold the leadership accountable to them to meet those
objectives. In the mainstream sense, the political leadership is required to report to the membership on
programs, on service provision, and on audits and grant acquittals. To satisfy both approaches to
accountability, financial statements and other external accountability procedures are 'reinterpreted' in ways
community members can better relate to. For example, rather than talk about the fact that 'x' amount of
dollars was spent on 'y', an administrator will often talk about 'x' number of men in the community employed
as a result of the organisation targeting an area of skills development which may be outside the funding
guidelines. The important point is that the community understands that people are employed, generally
resulting in more efficient use of existing social transfer payments and other resources.
There are many other examples of Aboriginal approaches to accountability. In the case of the delivery of
health programs and services, local protocols often take priority over statistical reporting requirements.
Technically, administrators may be in breach of mainstream accountability requirements as staff often refuse
to collect the intake data that is attached to funding streams because the questions asked are inappropriately
worded. In the words of one service provider, 'I will not be asking questions that are rude'. And although the
organisations may be providing effective service leading to more positive outcomes, their funding may be
restricted as they have not met mainstream requirements. In the area of employment and training,
employment opportunities are, at times, provided to those in the community viewed by the Aboriginal
leadership as 'needing the opportunity the most'. Often, these people are able to do the job but do not meet
formal education requirements. If they are hired by the Aboriginal organisation, that organisation is in breach
of its funding guidelines and may be subjected to mainstream sanctions.
In this environment, Aboriginal leaders and service providers must continually assess the links between
Aboriginal approaches to accountability, based on local priorities and values, and mainstream approaches in
order to function effectively. This assessment is carried out within a hostile political environment whereby
negative pubic perceptions about the capacity of Aboriginal organisations to manage public sector monies is
fueled by newspaper headlines such as 'huge black funds scandal confirmed', 'police investigate Aboriginal
funding', 'claims of Aboriginal theft, and 'Aboriginal industry under fire'. Former ATSIC Chairperson, Lois
O'Donoghue, notes that
9
9The following example was provided to me by an official from an Aboriginal Health Service: 'Program A' is
funded by government as it meets government funding guidelines. However, 'Program B' which is not funded
by government, may be more effective in meeting community needs. So, the organisation decides to fund
Program B with money from Program A based on local needs and priorities. Now, if an Aboriginal
administrator funds Program B from Program A, and is held accountable for Program A's funding, the
administrator will be in breach and, therefore, not 'accountable'. In the meantime, the administrator is
'accountable' to the membership as services have been delivered that are needed and appropriate and
reflective of local priorities.
6
Accountability is a term more often used in Aboriginal affairs than in any other area of
government. On one level the call for "accountability" is simply asking that moneys spent on
Aboriginal programs are used for the purposes for which they are intended. This is a demand
that few could disagree with.
But the way the issue plays in contemporary Australia is not so simple. Many people appear to
believe that Aboriginal programs are alive with "waste, rorts and mismanagement", that
misappropriation and fraud go hand in hand with incompetent bureaucracies...
The result is a national debate about Aboriginal issues on two planes: one is a debate about the
ethical constitution of the nation, the other is about money-in particular "taxpayers 'money". One
supports Aboriginal people; the other rebukes us for apparently squandering the amounts that
have been so lavishly bestowed on us (ATSIC 1998a).
O'Donoghue argues that the reality of accountability in Aboriginal affairs is that there is a great deal of it and
perhaps it is too much of the wrong kind of scrutiny and, if there is an "industry" in Aboriginal affairs, it is an
accountability industry (ATSIC 1998a).
Alternative approaches to accountability based on Aboriginal culture clearly do exist and are viable. These
approaches also function alongside mainstream accountability demands, and at the moment conflicts
between the two are both inhibiting effective service delivery and fueling unproductive and misdirected
political debates. Is it possible to achieve reconciliation?
Deriving Viable Approaches to Accountability: An Analytical Starting Point
There are no Australian analytical frameworks that address the reconciling of Aboriginal and mainstream
accountability. Therefore it is necessary to seek relevant models from elsewhere and adapt them to the
Australian context. In this case a framework developed through World Bank activities in Africa is used. The
model is relevant conceptually as it considers the impacts of colonialism on poor service delivery outcomes
for indigenous people and seeks to provide solutions to poor outcomes based on reconciling 'indigenous' and
'transplanted' institutions.
Dia (1996) uses the term 'structural disconnections' to describe the impact of the domination of indigenous
institutions by transplanted institutions as a result of colonisation10. Indigenous institutions, born of traditional
culture and rooted in local culture, find themselves overrun with imposed demands of legitimacy,
enforcement, societal expectations, behaviours and incentive systems that are totally at odds with cultural
traditions and laws. As the 'disconnection' grows between indigenous and transplanted institutions, as
transplanted institutions increasingly dominate the indigenous structures, service delivery outcomes for
indigenous people worsen as service provision becomes more and more distant from the control of
indigenous institutions. The end result is either an eradication of the indigenous institution by the
transplanted institution or, in the case of Australia, a situation where indigenous institutions struggle to
operate within two parallel systems that occasionally converge. The reconciliation or 'structural re-connect' of
indigenous and transplanted institutions at points of convergence is the only means of achieving more
positive outcomes, as both types of institutions – indigenous and transplanted – are here to stay,
Adaptation is 'at the heart of the institutional reconciliation paradigm' (Dia 1996:vii) and through this process,
indigenous and transplanted institutions can converge and build on each other's strengths. This is noted by
Dia as an
exercise that brings together dominant societal values of indigenous cultures on the one hand,
and technical and organizational ideologies supporting modem institutions (emerging mostly
from Western development contexts) on the other" (1996:242).
To achieve reconciliation, transplanted institutions need to be adapted to the local context in order to build
the legitimacy needed for enforceability. On the other hand, indigenous institutions, although rooted in local
culture, also need to adapt to the changing world to maintain their relevance in a more challenging and
competitive arena.
10
It is questionable whether or not the term 'disconnect' is the most appropriate. I would suggest that one
cannot' disconnect 'what was not' connected' in the first place. However, it is useful as a conceptual tool
7
Dia notes six phases in the reconciliation process that must be addressed: definition and identification;
lobbying; caucus formation and capacity building; dialogue; joint implementation; and joint monitoring and
feedback. These phases are not sequential, nor are they distinct. They do, however, provide a broad
framework for the reconciliation of indigenous and transplanted institutions. The following provides an
adaptation of Dia's basic model.
In the first phase of definition and identification, clashes in mainstream and Aboriginal accountability and
alternative mechanisms are identified. The second phase of lobbying includes the development of
interpersonal contacts between key community leaders, government officials, and community members. The
aim is to build legitimacy and trust as areas of misunderstanding and conflict are identified. This phase also
clarifies the "social dynamics of the community, the power plays and political aspirations of key players, and
their perceptions of one another" (Dia 1996:244).
During the third phase of caucus formation and capacity building, Aboriginal organisations and leaders work
together with community members to ensure a basic understanding of mainstream accountability
requirements. Also critical in this phase is a local level rendering of what Aboriginal political accountability
means to community members and to the leadership. During this period, gaps in knowledge can be outlined
and strengths and weaknesses of systems denoted. Capacity building also proceeds in tandem during this
phase. The fourth phase of dialogue is designed to generate a common focus and broaden the common
ground among funding agencies, community residents, Aboriginal organisations and the leadership.
Through the clear articulation of differences and similarities, needs and objectives are priorised and strategic
plans mutually agreed upon and it is particularly crucial that each make a genuine effort to understand each
other's positions. It is also critical for each interest to work with those they represent in the fostering of
understanding and joint management processes.
The fifth phase of joint implementation of strategic planning concentrates on the building of local institutions.
The final phase of joint monitoring and feedback is designed to ensure constant feedback of progress, to
provide positive reinforcement, and to correct mistakes as the implementation process unfolds.
Dia notes that one of the most critical concepts in successful institutional reconciliation is that of the
willingness on the part of politicians and dominant institutional interests to make the adaptations necessary
to achieve a 're-connection'. One of the issues raised in assessing the usefulness of this model is whether
the same will exists on the part of mainstream governments in Australia to make the necessary changes.
Conclusion
Mainstream politicians are, to a large extent, hostile to the notion that Aboriginal organisations are as
'accountable' as any other organisations in Australia. They do not accept the reality that there is no lack of
accountability per se in ATSIC. Neither do they accept that the most specific lack of accountability is in
Commonwealth-State fiscal arrangements that impact significantly on Aboriginal affairs and poor service
delivery outcomes. In addition, government is placing emphasis on the wrong sort of accountability in
Aboriginal organisations and is not considering valid alternative approaches. It is also clear that the
conventional financial approach to Aboriginal accountability taken by politicians in Australia is not meeting
the goals of effective public sector service delivery in Aboriginal communities.
Forms of accountability based on Aboriginal political structures, Aboriginal forms of control, and Aboriginal
sanctions generated within the community need to be combined with more conventional forms of
accountability. Given the hostility toward Aboriginal accountability, however, we are a long way off from this
occurring. What is required in the immediate future is systematic research that demonstrates clearly the
viability of alternative Aboriginal approaches to accountability to politicians and government officials. Using
Dia's model as a starting point, we will first need to clarify the clashes between mainstream and Aboriginal
forms of accountability in a systematic way. The next step will be the distillation of documentation at a
conceptual and practical level of Aboriginal approaches to accountability that can be combined with
conventional approaches.
8
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