An official report says the public sector frequently fails to comply with both the intent and the requirements of legal and regulatory frameworks.

“Complying with the letter of the law while ignoring the intent does not cut it,” says chair of the Joint Committee of Public Accounts and Audit, Julian Hill MP.

Hill highlighted a concerning trend: the public sector often falls short of the high standards of professionalism expected. 

He noted that there is an unacceptably high risk tolerance for non-compliance, where “getting things done”, even through cutting corners, has sometimes overshadowed adherence to the law.

A particularly troubling finding during the inquiry was that officials acting contrary to finance law were often defended by citing a “lack of malintent” or “acting in good faith” to deliver on government decisions. 

“This is plainly and unambiguously wrong,” Hill said. 

A notable example involved officials in the Department of Health receiving corporate “congestion busting” awards for a hospital grants project under former Minister Greg Hunt, which breached finance laws. 

Hill says public money was paid without legislative authority and in defiance of legal advice. “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 make clear it’s not,” he said

The report observed a persistent resistance to accountability across the public sector. 

Hill pointed out that agency heads often lack the frameworks to ensure their officers act according to both the letter and the intent of the law, thereby demonstrating probity.

To foster a public sector characterised by probity and integrity, the Committee recommends focusing on three critical and interdependent aspects: frameworks, culture, and accountability.

“The key, however, to ensuring the public sector acts with probity and integrity is overwhelmingly not the rules per se—it is ethical leadership: the ‘golden thread’ that binds and animates the system in a positive direction. Ethical leadership must be demonstrated at all levels, especially by accountable authorities and senior officers,” Hill said.

The Committee made 11 recommendations aimed at embedding probity and ethics into public sector accountability systems. 

The Australian Public Service Commission (APSC) is tasked with developing guidance that defines culture and metrics to build, measure, and assess organisational culture as it applies to probity. Additionally, all entities are required to develop and maintain an overarching Integrity Framework.

The full report is available for download from the inquiry website. 

The inquiry's terms of reference included examining systemic factors contributing to poor ethical behaviour and identifying opportunities to strengthen government integrity and accountability. 

It specifically considered matters connected to several Auditor-General Reports, including those on the Australian Prudential Regulation Authority, Australian Securities and Investments Commission, Australian Competition and Consumer Commission, and the Department of Health and Aged Care, among others.