The National Broadband Network (NBN) has been one of the Australian government’s most vexed infrastructure projects. Now, it can add the Australian National Audit Office (ANAO) to the list of organisations saying its performance isn’t up to scratch.
A recent audit of NBN Co found the state-owned enterprise’s communication with, and reporting to, shareholder ministers “fell short of mandatory requirements”.
In 2020, the then-government declared the NBN was “fully operational” and that NBN Co would transition to an organisation more focused on the operation than construction of the network, by 2023-2024. The audit assessed NBN Co’s effectiveness in managing the transition.
Auditors Michelle Page, Susan Ryan and Peter Bell said they did not provide complete or accurate information to the board or shareholder ministers about risks and risk management during the transition
“During the transition quarterly progress reports did not include all mandatory content and were provided to shareholder ministers by management rather than the board chair, as required. This was rectified early in 2024 but only after three written requests from shareholder ministers. Information requirements of the shareholder information deed have not been met,” they said.
“Performance reporting is also not included in the [audit and risk] committee’s forward work plan. The audit and risk committee did not meet its PGPA Rule obligation of reviewing the appropriateness of performance reporting during the audit period.
“NBN Co has not met its obligations for communication with, and reporting to, shareholder ministers. During the transition, quarterly progress reports did not include all mandatory content and were provided to shareholder ministers by management rather than the board chair, as required. This was rectified early in 2024, but only after three written requests from shareholder ministers.”
The report makes three recommendations aimed at ensuring specific requests from shareholder ministers were adequately responded to, the Australian government’s expectations were reflected in strategy and performance monitoring and mandatory requirements were met.
NBN Co has accepted all three. The auditors wrote there were important lessons in this for all government agencies.
“Regular and well-designed training and briefing updates provided to government business enterprise directors can ensure that all are kept fully informed of their personal obligations and requirements under the Public Governance, Performance and Accountability Act 2013, the Corporations Act 2001, Ministers’ Statement of Expectations and GBE guidance,” they said.
“A clear framework for how performance information is prepared and reported to the board and shareholder ministers can provide the needed structure, and meaningful context for measurement, to demonstrate how shareholder value has been created and that the GBE had operated efficiently, price efficiently and continues to earn at least a commercial rate of return.”
The ANAO’s audit program for next financial year is scheduled for release in July.
CEO Stephen Rue to depart NBN Co
While the ANAO criticised NBN Co’s reporting, they said the transformation of the organisation more generally was going very well.
This is a credit to Australia’s highest-paid mandarin — CEO Stephen Rue, who announced today he will depart in November to lead telco Optus.
Rue joined NBN Co in July 2014 as chief financial officer. He was made CEO in 2018 and was expected to continue in the role until 2026.
He is one of a number of senior public servants who have been targeted since 2020 for earning several times more than the prime minister. In Rue’s case, around $3 million a year.
Rue is a member of NBN Co’s audit and risk, and finance committees.
Chief financial officer Phillip Knox will be interim CEO until a replacement can be found.
Rue said helping build the National Broadband Network was a source of personal pride.
“It has been an enormous privilege to work alongside a talented team dedicated to connecting Australians to high-quality broadband services across the country,” he said.
“We are transforming Australia’s digital landscape, connecting millions of homes and businesses to high-speed broadband, and laying the foundation for future innovation and data growth.
“We have delivered fast and reliable broadband to even the most remote areas of Australia, continuously working to bridge the digital divide, lifting the digital capability of our nation and empowering communities.
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