The Office of the Auditor-General (OAG) is concerned there is less scrutiny over Government spending after an increase in multi-year appropriations (MYAs) in the past eight years.
A report into the appropriations, released on Friday, called on Government departments and the Treasury to review their use and consider whether the current MYAs are all justified.
MYAs allow spending for up to five years. They give flexibility to Government departments for spending on projects where there is uncertainty about the pattern of expenditure, such as large construction projects like new hospitals.
However, MYAs are a looser form of control over public spending compared to fixed annual sums, as they are subject to less scrutiny, OAG said.
"MYAs by their nature reduce Parliament's control of the public purse in the sense that several years of spending are authorised at once, rather than authorising each year for one year at a time," the OAG report said.
"In our view, any device that loosens Parliament's control of the public purse should be used carefully."
Treasury guidelines said MYAs should be used sparingly and not when an annual appropriation should be used instead.
However, the report found MYAs were being used by spending that should have been covered by annual apportions instead. The OAG said there had been examples where MYAs were not appropriately being used to authorise spending on policy, financial and ministerial advice.
OAG found the number of MYAs used has risen from 7 percent to 19 percent of all appropriations during the past eight years and covers many billions of dollars the Government is spending.
Since MYAs were set up in 1994/95 financial year to Budget 2008, there were 20 MYAs - increasing to 59 in 2015/2016. Since then, they have jumped significantly to 167 in 2022/2023.
As of Budget 2023, about $44 billion of public spending was authorised through MYAs, compared to $133 billion through annual appropriations. However, the OAG noted the two figures are not directly comparable because the MYA figure covers spending intended to be incurred during several financial years.
The OAG also found MYAs are also increasingly being set up outside the main annual Budgets, with about four to five times as many in the last five years when compared with the previous five years. MYAs established outside Budgets have "less opportunity for scrutiny", OAG said.
"In our view, decisions to use MYAs should not be made lightly and... should be authorised only when justified," the OAG report said.
"We consider it timely for Government departments and the Treasury, as part of their Budget process, to review the use of MYAs and confirm that this mechanism for providing flexibility in public spending is being used appropriately."
However, the findings won't likely affect this year's Budget - which is due to be released in two weeks.
