Donation disclosure system flawed: report

An audit report has described the AEC's work in scrutinising disclosures as
An audit report has described the AEC's work in scrutinising disclosures as "partially effective".

Australia's electoral watchdog has been told to lift its game when it comes to scrutiny of financial disclosures from political parties, candidates and donors.

The auditor-general on Thursday released a report into the Australian Electoral Commission's handling of $5.2 billion in financial disclosure returns over the past four years.

The disclosure scheme was set up in 1983 to inform the public about the financial dealings of political parties, candidates and others involved in the election process.

The audit report described the AEC's work as "partially effective", pointing out that not all required returns had been obtained, there had been limited analysis of the returns that are obtained and evidence showed some returns are incomplete.

"Across the four-year period examined, while the AEC has obtained 5882 annual and election returns, as at 30 June 2020, 75 returns have not been obtained," the report said.

"There have also been delays with the submission of returns to the AEC with 22 per cent of annual returns and 17 per cent of election returns lodged after the legislated due date."

It found the AEC does not make effective use of available data sources to identify entities that may have a disclosure obligation that have not submitted a return.

And there is "insufficient evidence that the returns that have been provided are accurate and complete".

Even with those returns that were obtained "there is limited analysis undertaken", the audit found.

However, the AEC rejected the audit's approach, saying the report contained errors of fact and "superficial analysis".

"The ANAO's decision to conduct this audit prematurely - before recent legislative changes have had a chance to take effect - is akin to a building inspector assessing a two-storey house after only the first level had been completed," the AEC said.

"The AEC has not detected systemic issues, wilful or large scale non-compliance with the legislation."

The audit found since 2015 only two prosecutions over breaches had proceeded, with a total of $2000 in penalties applied - both of which took over 600 days to settle.

The commission denied there was a need for a more heavy-handed approach to enforcement, saying it had found incomplete or incorrect disclosures were often due to administrative mistakes or misunderstandings, which were quickly rectified.

Australian Associated Press