Subject to any statutory provisions to the contrary, the Crown has the prerogative power to restructure the administrative arrangements of central government agencies as it sees fit. This has been referred to as the 'prerogative of agency'⁴. The Crown does not have a similar prerogative authority to change the administrative arrangements of statutory authorities in a way that is inconsistent with the intentions of the Parliament in the enactment that establishes that statutory authority, where the legislative provision displaces, perhaps entirely, the previous prerogative authority that may have existed otherwise with respect to these arrangements.

It is not to be denied that the objective of greater efficiency in the administrative arrangements of government is a highly desirable objective and must be facilitated in the public interest. This objective must, however, be pursued in accordance within the fundamental 'societal value that is at the heart of our system of government', ie the rule of law⁵.

THE AUDIT ROLE

The matter of the adequacy of the controls and the propriety and lawfulness of the financial transactions of the Treasurer and public authorities regarding the expenditure of public monies is a reporting responsibility of the Auditor-General under the Public Finance and Audit Act 1987⁶.

In my opinion, when an administrative restructure tends to defeat the enactment of the Parliament and, that restructure has not been approved in accordance with the established processes of the Parliament, a matter of importance to be drawn to the attention of the Government and the Parliament arises in accordance with subsection 36(1)(b).

BACKGROUND

In October 1997, the Government decided to restructure the public service. Amongst other steps, it abolished a number of administrative units under the Public Sector Management Act 1995, and established ten new 'portfolio' based agencies. The Government's stated strategy was to align key government administrative units with Ministerial portfolios, and streamline those portfolios. Its stated objectives included more efficient administration.

One of the new administrative units was the Department of Human Services. Employees of the (former) Department for Family and Community Services, and some employees of the Department of Housing and Urban Development, were transferred to the new Department.

In the months following, the Government considered submissions from the Minister for Human Services relating to staffing arrangements within the Human Services portfolio. Those arrangements related to various of the statutory authorities for which the Minister was responsible, and their employees.

As a result, on 2 April 1998, by proclamation (effective from 25 April 1998) under section 7 of the Public Sector Management Act 1995, the Government incorporated a number of public sector employees into the Department of Human Services.

The public sector employees affected by the proclamation included:

• all public sector employees of the South Australian Health Commission, with some exceptions, eg the Chief Executive Officer and the Deputy Chief Executive Officer of the Commission;
• all public sector employees of the South Australian Housing Trust;
• all public sector employees of the South Australian Community Housing Authority;

employed prior to the effective date of 25 April 1998.

The proclamation did not affect those who were at the effective date employed on an hourly, daily, weekly or piece work basis, or officers and employees of an incorporated hospital or health centre under the South Australian Health Commission Act 1976.

The Government's stated objectives for this transfer⁷ included 'to create a more flexible work force by bringing people into the broader portfolio of Human Services ·'. It also sought 'to improve access and delivery of services ·', and in that context, declared 'In addition to improved service delivery, one department will maximise value and effectiveness as well as more efficient administration in meeting the needs of South Australians.'

The letter to affected staff proposing the transfer indicated that there would be 'no change' in the role of Boards of statutory authorities. Nor would the proposed transfer '· in any way affect the work performed by staff in assisting the Boards to carry out their statutory functions'.

Affected staff were assured that '· transferred employees would be public servants employed under the Public Sector Management Act 1995 and your current terms and conditions of employment would be preserved.'

THE STATUTORY CONTEXT

The Housing Trust, the Health Commission and the Community Housing Authority are statutory authorities incorporated or continued in existence under specific legislation.

Each Act makes slightly different provision for the employment of staff.

The South Australian Health Commission employed staff under the South Australian Health Commission Act 1976. That Act establishes the Commission. It confers upon it a number of functions, including its primary function of promoting the health and well being of the people of the State. It gives the Commission full power to perform any act necessary or expedient for the performance of its statutory functions. It requires that there be a Chief Executive and a Deputy Chief Executive of the Commission, who cannot be public service employees.

As to its staff generally, section 20 provides:

1. The Commission may appoint, upon terms and conditions fixed by the Commission with the approval of the Commissioner for Public Employment, such officers and employees of the Commission as it thinks necessary or desirable.
2. The Commission may, with the approval of the Minister administering any department of the Public Service of the State, upon terms and conditions mutually arranged, make use of the services of any officer, or use any facilities or equipment, of that department.

Although the Act also provides that in the exercise of its functions, the Commission is subject to the 'control and direction' of the Minister, in my opinion, section 20 establishes that primary responsibility for the employment of staff rests with the Commission.

This Act continues in existence the South Australian Housing Trust (SAHT). It does not exhaustively define SAHT's functions, but indicates that they include providing housing and managing public housing assets, and being the principal property and tenancy manager of public housing in the State.

SAHT is managed by a Board of Management, the members of which are appointed by the Governor. It is subject to the direction and control of the Minister.

So far as its staffing arrangements are concerned, section 17 of the Act provides:

1. The Minister will, after consultation with the Chief Executive of the Department [responsible for the Act] and SAHT, determine the staffing arrangements for SAHT · (and such staff will, subject to this Act or unless the Minister otherwise determines, be persons who are appointed and hold office under the Public Sector Management Act1995).
2. SAHT may, with the approval of the Minister, engage agents or consultants, and enter into other forms of contract for the provision of services.
3. SAHT may, by arrangement with the appropriate authority, make use of the services, facilities or staff of a government department, agency or instrumentality.

The apparent intention is that the Minister, not SAHT, is primarily responsible for determining staffing arrangements.

This Act continues in existence the South Australian Cooperative Housing Authority as the South Australian Community Housing Authority. It has advisory and other functions in relation to the cooperative and community housing sector in South Australia.

Section 18 is in terms similar to section 17 of the South Australian Housing Trust Act:

1. The Minister will, after consultation with the Chief Executive of the Department [responsible for the Act] and the Authority, determine the staffing arrangements for the Authority (and such staff will, subject to this Act or unless the Minister otherwise determines, be persons who are appointed and hold office under the Public Sector Management Act 1995).
2. The Authority may, with the approval of the Minister, engage persons as agents or consultants.
3. The Authority may, by arrangement with the appropriate authority, make use of the services, facilities or employees of a government department, agency or instrumentality.

Again, the apparent intention is that the Minister, not the Authority, is primarily responsible for determining staffing arrangements.

Thus, so far as its staffing arrangements are concerned, the Health Commission is in a different legal position from that of SAHT or the Community Housing Authority. The Health Commission is primarily responsible for its staffing, and the legislation contemplates that the Health Commission is the employer of its staff. By contrast, SAHT and the Community Housing Authority appear to have a secondary responsibility, subordinate to that of the Minister. The Minister responsible for SAHT and the Authority must exercise his or her power to make staffing arrangements subject to consultation with SAHT and the Authority (and the Chief Executive of the Department through which the staff are to be provided), and only for the purposes of the relevant Act in each case.

The Human Services portfolio is a very significant one, by any measure. Whether regard is had to its share of the total budget outlays, or staff employed, or services provided, it is of considerable importance, both within Government and to the broader South Australian community.

In light of that, and the extent of the restructuring undertaken within the portfolio, on 14July1998, I wrote to the Chief Executive of the Department of Human Services, seeking to better inform myself as to certain key matters concerning the restructuring, particularly in connection with the changed staffing arrangements.

Specifically, I sought details of:

• the legal advice sought and obtained in connection with those arrangements;
• the consultation undertaken with relevant statutory authorities and affected employees;
• the steps taken following that consultation;
• appointments to certain public offices.

The Chief Executive responded and provided documentation, including copies of legal advice and correspondence evidencing some of the consultation undertaken. I asked for further information. Some of that further information, particularly that relating to the South Australian Health Commission, was obtained close to the date upon which this report had to be submitted for publication, so only preliminary views about it could be formed. It may be that further comment upon it will be required at a later date.

I have reviewed the documentation provided to me by the Chief Executive. Several important issues arise.

Before transferring the staff of the various authorities, the Government sought the advice of the Crown Solicitor's Office as to the best means to achieve the transfer.

The Crown Solicitor's advice was to the effect that it would be more appropriate to make use of subsection 7(3)(b) of the Public Sector Management Act 1995 to effect the transfer, than to use the provisions quoted in the enabling Acts, at least in respect of the SAHT and the Community Housing Authority.

The legal position in respect of the Health Commission was clearly more problematic, but the Crown Solicitor was able to conclude that section 7 could also be used in respect of the transfer of Health Commission employees, with some qualifications, including that:

• The Chief Executive and Deputy Chief Executive of the Health Commission must still be able to continue to give directions to the staff assigned to the functions of the Health Commission.
• The Chief Executive of the Department of Human Services could not give a direction to those staff as to the carrying out of a statutory function or duty of the Health Commission.
• The powers of direction and control by the Chief Executive of the Department of Human Services would be limited to directing the relevant employees to attend at the offices of the Health Commission and comply with the directions of the Chief Executive and the Deputy Chief Executive of the Commission.
• The Chief Executive of the Department of Human Services would have control in relation to issues such as reclassification and similar staffing issues, provided that a sufficient level of staff was available at all times to enable the Health Commission's functions to be properly carried out.

In essence, whilst the advice of the Crown Solicitor was that the proposed use of section 7 of the Public Sector Management Act 1995 was lawful, certain consequences and limitations flowed from its use. For example, it gave rise to a legal obligation on the part of the Government to consult with the affected employees and recognised industrial organisations. It avoided the legal requirement to consult with the affected statutory authorities.

Whilst the use of section 7 avoided the explicit legal obligation to consult with the boards of the affected statutory authorities, such consultation in fact took place. Issues and concerns were raised by the statutory authorities, including, in particular, by the Board of SAHT. Those concerns included questions as to SAHT's ability to meet its statutory responsibilities, its accountabilities in a context where it lacked a direct legal relationship (as employer) with the human resources allocated to it, and the need (or otherwise) for a documented arrangement with the Chief Executive of the Department of Human Services as to the use of the former SAHT staff.

The Crown Solicitor's Office responded directly to SAHT. SAHT had asked how it could meet its obligation under section 16 of its enabling Act to ensure as far as practicable that appropriate strategic and operational plans and targets are established, and that there be appropriate management structures and systems for monitoring management performance against those plans and targets, and that corrective action is taken when necessary, when it was not the employer of its staff.

The Crown Solicitor's letter assured the SAHT that SAHT's Act did contemplate that SAHT may be staffed by persons employed within an administrative unit of the public service. However, it also indicated that SAHT retained a 'principal responsibility' for ensuring an appropriate management structure was in place, and that that responsibility would encompass the determination of a hierarchical structure in the nature of an organisational chart. By way of explanation, it indicated:

• the SAHT Board would have primary responsibility for determining how many managers there would be within each level of the hierarchy, but that the Chief Executive of the Department would have the authority to determine remuneration and other conditions of employment as permitted under the Public Sector Management Act 1995;
• at the end of the day, if there were disagreement between the Board and the Chief Executive of the Department as to the number of managers at a particular level in the hierarchy, the Board would be relieved of its statutory responsibility, because in terms of section 16, it would no longer be 'practicable' for it to achieve its desired outcome⁸.
• the Chief Executive of the Department would have to ensure that SAHT has adequate resources to carry out its functions.
• The Crown Solicitor declined to advise as to the necessity to document an arrangement under which staff would be provided by the Department to SAHT, as the matter was one of administration rather than law, but suggested the matter was one that the Board may wish to take up with the Chief Executive of the Department⁹.

I do not know the ultimate outcome of this process of consultation. At the time of writing, I await details of subsequent correspondence. Nevertheless, the Crown Solicitors' view has obvious implications for the future structure and operation of the Department of Human Services.

In relation to the matters of the provision of human resources to the statutory authorities to enable them to fulfil their respective statutory functions, the Chief Executive advised:

• that she has given the Board of SAHT an undertaking that she will consult with SAHT in determining any change to the staffing levels for SAHT, and in making any such determination, she will ensure that services provided to the Board are sufficient to enable it to carry out its statutory roles and functions;
• that she will consult with the Community Housing Authority's Board in determining any change to the staffing levels for it, and in making any such determination, ensure that services provided to the Board were sufficient to enable it to carry out its statutory roles and functions;
• that a Memorandum of Understanding is being prepared (since completed) for consideration of the Minister, SAHC, the Department of Human Services and its Chief Executive, which is expected to provide that SAHC can make use of such services of her Department's staff as are necessary to enable it to carry out its statutory functions and responsibilities.

In Audit's view, having regard to the issues raised by the restructure, a formal instrument clearly setting out the protocols to be observed in light of the roles, responsibilities and accountabilities of all involved (the Minister, the Chief Executive, her Department and the Statutory Authorities) is required in the case of each of the statutory authorities concerned. These issues include the significance of the portfolio; the number of affected employees; the legislatively defined roles and responsibilities of the affected statutory authorities; the concerns raised by the statutory authorities (and indeed the affected employees); the legal advice received as to constraints affecting the use to be made of the employees transferred to the Department; and the accounting and liability issues that arise.

Audit sees no particular justification for such an instrument (regardless of its nature) being put in place only for the South Australian Health Commission, notwithstanding its peculiar statutory position.

However certain issues arise as a result of the Audit examination that are peculiar to the Commission, and they are discussed in the next section.

Mr Ray Blight was until recently Chairman and Chief Executive officer of the Health Commission. He resigned with effect from 14 April 1998.

On 30 March 1998, the Health Commission held a special meeting to consider future arrangements in light of that resignation. Ms Christine Charles, Chief Executive of the Department of Human Services, was invited to attend that meeting, and did so.

Ms Charles tabled a minute from the Minister for Human Services dated 30 March 1998 advising the members of the Commission that he:

• intended to recommend to Cabinet that Ms Charles be appointed Chairman of the Commission;
• strongly recommended that Ms Charles be appointed as Acting Chief Executive of the Commission.

The Commission resolved that Ms Charles be appointed as acting Chairman and as Acting Chief Executive Officer for 12 months, subject to legal advice as to the acting nature of the appointment.

On 16 April 1998, Executive Council appointed Ms Charles to be a member and Chairman of the Health Commission for 3 years, in each case.

Section 19A of the South Australian Health Commission Act 1976 requires that there be a Chief Executive Officer (CEO) and a Deputy Chief Executive Officer of the Health Commission, neither of whom may be Public Service employees.

Prior to the appointments, the Department of Human Services sought legal advice as to the procedures that should be followed to appoint a new CEO and Chairman of the Health Commission. The Department received that advice on 26 March 1998. The advice pointed out the need for a public servant who is proposed to be appointed to the position of Chief Executive Officer of the Commission to first resign from the public service (ie to ensure compliance with section 19A). Dealing specifically with the proposal that Ms Charles be appointed as CEO of the Commission:

Audit examination suggests that at the time of writing, Ms Charles is acting in the position of Chief Executive Officer of the Health Commission whilst still a public servant as Chief Executive of the Department of Human Services.

I have drawn this unsatisfactory situation to the attention of the Department. I expect the situation to be rectified as necessary as a matter of urgency. I have also asked the Department to investigate why the legal advice of 26 March 1998 which addressed the various statutory requirements was apparently not drawn to the attention of the Minister, Cabinet, Executive Council or the Health Commission at the time relevant decisions were being made.

On 10 September 1998, I was advised by the Crown Solicitor's Office representative in the Department that the Crown Solicitor's view was that the Constitution Act 1934 (section 68) requires that the Governor make appointments to the office of Chief Executive Officer of the South Australian Health Commission, and that no such appointment had been made in respect of Ms Charles. I was also advised that Ms Charles' appointment would be 'regularised'.

The fact is that Ms Charles has, for some months, performed the duties of (and no doubt, exercised the powers attaching to) the position of Chief Executive Officer. I respectfully suggest that in regularising the position, the advice of the Crown Solicitor's Office be sought as to the status of actions taken during that period, so that any issues that arise as a result of her having done so are addressed as required.

In my 1995-6 report, I raised the issue of the holding of incompatible offices by public employees, that is, two offices where the duties attaching to them are or may be in conflict. I drew attention to the self executing nature of the prohibition at common law on the holding of such offices - the first office is vacated.

Since that report, Parliament has enacted the Public Sector Management (Incompatible Public Offices) Amendment Act 1998. New section 70A provides, in effect, that there is no longer any automatic vacation of the first held of two incompatible public offices, and makes provision for directions to be given by the Governor that address how Executive Government expects any conflicts of duty to be resolved. If such directions are complied with, the holder of the relevant offices is excused from the consequences of any 'necessary' breach of duty.

If government proposes to address the situation referred to in the preceding subsection by having Ms Charles resign from the Public Service and, making use of section 13 of the Public Sector Management Act 1995 as suggested by the Crown Solicitor, then before doing so, it should, in my opinion, first obtain advice and consider whether the two offices are compatible in the relevant sense, particularly in light of the issues that will arise in consequence of the transfer of Health Commission staff that has occurred. For example, it is difficult to see how Ms Charles can not have had a conflict of duty in negotiating the Memorandum of Understanding¹⁰ in one capacity as Chief Executive of the Department of Human Services, and in another capacity as Chief Executive (and for that matter Chairman) of the Health Commission. Other conflicts may arise, for example, at budget time. Indeed it may be that the duties of the various offices are inherently in conflict. The statutory requirement that the Chief Executive Officer of the Commission not be a public servant would suggest that this was considered when Parliament enacted the Health Commission Act.

If there is necessary conflict, but the Government decides nevertheless to confirm or regularise Ms Charles appointments, then there may be (if only in Ms Charles' interests) a need for directions to be given under the new section 70A. Those directions may only be capable of applying prospectively, to actual or potential conflicts arising after the date the directions are made. More fundamentally, it is difficult to see how the power to give those directions could be used to require that the conflict be resolved in any manner other than in favour of the relevant statutory duty. I assume the Government will seek legal advice on this issue.

At the time of writing, I have not been advised what steps have been, or are, to be taken, to deal with this issue.

On 18 August 1998, the South Australian Health Commission met and approved the terms of a Memorandum of Understanding with the Department 'relating to the provision of financial, administrative, management and other services as required by the Health Commission to perform its statutory duties and functions', subject to the approval of the Minister. On 31 August 1998, an amended version of the memorandum was approved.

The legal advice given in connection with the Memorandum of Understanding characterised the memorandum as 'effectively propos[ing] that SAHC relinquish its whole budget for the current financial year to [the Department]'. In fact, the memorandum characterises the budget as a 'service fee', payable by the Commission to the Department.

In my opinion, a number of aspects of the arrangements set out in the memorandum are, or may be, contrary to law:

• The South Australian Health Commission Act 1976 explicitly provides for a budgetary process applicable to the Commission. This issue is discussed in the next subsection.
• The revision of the memorandum at the second meeting of the Commission actually removed a provision that required the Department 'to act in accordance with relevant legislation and regulations, SAHC policy and the instructions of SAHC or its delegate in providing services to SAHC'¹¹. It is difficult to see how SAHC can, consistently with its statutory obligations, effectively relinquish its budget in favour of the Department without such a provision.
• Moreover, the memorandum purports to give the Department of Human Services (DHS) permission 'to use SAHC assets and facilities for both SAHC and DHS purposes.' In my opinion, this is contrary to law. I am not aware of any provision of the South Australian Health Commission Act 1976 which permits the Commission to enter into such an arrangement in relation to its assets¹². To the contrary, in my opinion, the Commission can only provide for the use of its assets for the purposes set out in its enabling Act. Those purposes do not include central government Departmental purposes unrelated to that Act. Such an arrangement gives rise to the prospect of funds appropriated for the Health Commission being applied for other purposes.
• In my opinion, the power of the Health Commission to enter into a 'service agreement' in the terms of the memorandum is far from clear. Even if it were, there would be an issue as to the calculation of the quantum of the service fee, which would probably need to be determined with reference to the actual costs incurred by the Department in providing services to the Commission for the performance of its statutory functions.

Aside from the issue of its lawfulness, this memorandum raises important issues of public interest concern in the transparency of government financial transactions. It is, at the very least, an unorthodox arrangement.

Section 23(1) of the South Australian Health Commission Act 1976 requires that the Commission advise its Minister of its estimated financial requirements annually. Section23(2) requires the Treasurer out of monies appropriated by Parliament for the purpose, pay the Commission the amounts that in the Treasurer's opinion are necessary to enable the Commission to meet its statutory obligations.

No monies were explicitly appropriated for the South Australian Health Commission by the Appropriation Act 1998. This is a matter upon which the Department sought advice from the Crown Solicitor's Office.

That advice was provided on 16 July 1998. It was to the effect that section 23(2) did not have the effect of requiring a specific line of expenditure allocated to SAHC in the Appropriation Act. However the advice also made it clear that:

• the portion of the appropriation for the Department that related to the performance of SAHC's functions should be paid by the Treasurer to the SAHC;
• a service agreement entered into by SAHC with the Department for the use by the Commission of the services of the Department could be entered into by the Commission with its Ministers approval (my emphasis);
• such an agreement 'cannot disregard the statutory duties which must be performed by the SAHC ·' (my emphasis);
• section 23(2) of the South Australia Health Commission Act 1976 requires the Treasurer to pay to the SAHC money required for the performance of its functions;
• the core functions identified in section 16 of the South Australia Health Commission Act 1976 remain the legal responsibility of the SAHC and funds required to perform those functions must be paid to the SAHC by the Treasurer and maintained in a deposit account established under section 21 of the Public Finance and Audit Act1987 rather than in a special deposit account conducted for the purposes of the Department;
• monies required for the employment of staff may be paid direct to the Department.

It is very difficult to see how the Memorandum of Understanding that was subsequently entered into can be said to properly address the issues to which this advice gives rise.

At the time of writing, the impact (if any) of this restructuring generally, and the matters discussed in this chapter in particular, regarding any proscribed use on the Commonwealth's grants to the State for the health sector had not been clarified and could raise further issues on State fiscal responsibility that have not yet emerged.

Audit examination of matters that have arisen in the context of the changed staffing arrangements in the Human Services portfolio, and in particular, those arrangements affecting the South Australian Health Commission, the South Australian Housing Trust and the South Australian Community Housing Authority, raise issues of financial and legal accountability that go to the heart of government of the State according to law.

Using the South Australian Health Commission as an example, neither the transfer of its staff by the proclamation under section 7 of the Public Sector Management Act 1995, nor the failure to explicitly appropriate funds for the Health Commission in the Appropriation Act1998, make any difference to the duty of all involved to ensure that Parliament's intentions in enacting the South Australian Health Commission Act 1976 are not defeated.

The proclamation made under section 7 of the Public Sector Management Act 1995 can do no more than contemplated by section 7 ö that is, effect the transfer of staff. It does not change the law. It does not provide a mandate for the disregard of the provisions of the enabling legislation of the affected statutory authorities.

Likewise, the absence in the Appropriation Act 1998 of an explicit appropriation of funds for the South Australian Health Commission makes no difference to the legal requirement to provide to the Health Commission funds for the performance by the Commission of its statutory functions in accordance with its enabling Act. Appropriation Acts are a special form of legislation¹³. The Appropriation Act 1998 in no way diminished the statutory role, functions and responsibilities of the Commission, its Chairman, its Chief Executive Officer or its Minister under the South Australian Health Commission Act 1976. The annual Appropriation Act is a form of temporary provision made for the overall financing of government. 'Tacking on' of other legislative initiatives is not permitted¹⁴. The short but significant point is that the ordering of financial arrangements in annual appropriations does not otherwise affect the nature or working of other statute law.

The administrative arrangement put in place as between the Health Commission and the Department of Human Services, to the extent that it tends to defeat the intention of Parliament in enacting the Health Commission's enabling Act is in my view contrary to public policy (as articulated in that Act). The result may be that it is an unlawful arrangement.

To put the matter at its lowest, my examination indicates that the use made of section 7 of the Public Sector Management Act 1995 in the circumstances of the restructuring of the staffing arrangements within the Human Services portfolio appears to have given rise to issues that were not properly identified or considered prior to the making of the relevant proclamation.

The legislation applicable to the South Australian Health Commission, the South Australian Housing Trust and the South Australian Community Housing Authority was not amended to facilitate the restructuring of the Human Services portfolio in the manner that the restructuring has occurred.

One result of not amending the existing statutory arrangements is that management of the Department of Human Services consistently with the Government's stated objectives in establishing the department and transferring the staff on the one hand and the statutory and other legal constraints in servicing and dealing with the statutory authorities on the other, will be very difficult.

Those constraints will need to be paramount in the thoughts and actions of departmental management. If the administrative intermingling of the Department's resources with those from the statutory authorities precludes the statutory authorities exercising their powers or fulfilling their duties in accordance with their enabling legislation, including with the degree of independence contemplated by that legislation, then the intention of the Parliament will have been defeated.

The Memorandum of Understanding that has been signed as between the Chief Executive of the Department of Human Services and the Health Commission points to such an intermingling.

In my opinion, the arrangements currently adopted raise serious questions as to the legality and propriety of the financial arrangements for the expenditure of public monies¹⁵.

I respectfully suggest that Government urgently review the arrangements put in place, and either seek Parliamentary endorsement of them, to the extent required, or regularise them to the extent necessary to respect the statutory and accompanying framework of legally required accountability that is applicable having regard to the enabling legislation together with the other requirements that may be relevant as outlined in this Report.

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⁴ M Freedland; 'Government by Contract and Public Law' (1994) PL 86 at p.94.back

⁵ This was succinctly stated by the Full Court of the Federal Court of Australia in Patrick Stevedores Operations No 2 Pty Ltd and Ors v Maritime Union of Australia (24 April 1998): ' · it sometimes happens that desirable ends are pursued by unlawful means.'back

⁶ Public Finance and Audit Act 1987; subsection 36(1)(a)(iii).back

⁷ Letter of 23 February 1998 from Christine Charles, Chief Executive of the Department of Human Services, on behalf of 'the Premier in his capacity as Minister responsible for the Public Sector Management Act 1995', outlining the then proposed transfer of staff.back

⁸ Depending on the factual circumstances, such an outcome, in my opinion, could, in substantive effect, be a suspension of the operation of the South Australian Housing Trust Act 1995, without Parliament's consent. This would be contrary to the fundamental constitutional principles established by the Bill of Rights 1689 that it is illegal for the Crown to suspend the operation of an Act of Parliament without the latter's consent (clause 2 of the Bill of Rights 1689 ).

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⁹ I note the view taken by the Crown Solicitor on this point. Whilst I respect the opinion of the Crown Solicitor, I query whether it is not within the remit of the Crown Solicitor to pursue this point in light of the issues of statutory compliance raised in the opinion itself and in the surrounding discussion in this Report.back

¹⁰ The Memorandum of Understanding is discussed in the next following section of this commentary.back

¹¹ Section 17 of the South Australian Health Commission Act 1976 relates to the delegation of its powers and functions by the Commission. If the Memorandum is a delegation by the Health Commission under this section, it seemingly cannot bind itself to relinquishing its authority in a way that the memorandum seems to envisage. Not only must all delegations be reviewed 'at least once in each year' (section 17(2)) but any delegation is 'revocable at will' (subsection 17(3)(a)) and 'does not derogate from the power of the Commission to act in any matter itself (subsection 17(3)(b)).back

¹² c.f. section 20(2) which empowers the Commission, with the Minister's approval, to make use of the 'facilities or equipment' of a department of the Public Service.back

¹³ By Parliamentary tradition and under the terms of the Constitution Act 1934; Appropriations Acts are a special form of legislation of temporary duration only and cannot ordinarily amend existing laws.back

¹⁴ See section 63, Constitution Act 1934. See also B Selway; 'The Constitution of South Australia'; (1995) Federation Press 4.6.5 at footnote 67.back

¹⁵ Section 36(1), Public Finance and Audit Act 1987.back