Australian audit highlights governance gaps in public-sector AI
The audit said AI governance at IP Australia has matured but needs further refinement.
The Australian National Audit Office has found that IP Australia’s use of AI in the patent rights process is largely effective, while calling for stronger cybersecurity governance, monitoring and strategic oversight.
Auditor-General Report No. 43 of 2025–26 examined whether IP Australia has effective arrangements to support AI adoption in the patent rights process. IP Australia administers intellectual property rights, including patents, trade marks, design rights and plant breeders’ rights.
The agency deployed its first AI tool for patent examination in 2018 and now uses four AI tools in the process. The tools are designed to provide examiners with information to support better decisions, rather than to decide patent applications themselves.
The ANAO said IP Australia has been an early adopter of AI and has progressively improved its governance arrangements. The agency has introduced an AI governance policy, risk-scaled assessment mechanisms and clearer enterprise accountability roles.
However, the audit found that strategic oversight of AI implementation and related benefits is not yet fully established. It said IP Australia’s AI inventory, committee roles and use-case ownership remain works in progress.
Monitoring and reporting were assessed as only partly effective. The ANAO said benefits have been inconsistently defined and measured, making it harder to demonstrate the ongoing effectiveness of AI tools and manage emerging risks.
The ANAO made two recommendations, urging IP Australia to review cybersecurity governance controls for AI and establish clearer risk-based monitoring and reporting arrangements. IP Australia agreed to both recommendations.
The audit said public-sector agencies should regularly reassess AI governance frameworks as they move from experimentation to wider use.
Why does it matter?
The audit shows how AI is moving from experimentation into routine public-sector decision support. IP Australia’s experience points to the benefits of AI in improving efficiency and quality, but also shows that governance must evolve as tools become embedded in official processes. Cybersecurity, accountability, monitoring and measurable benefits are becoming central to responsible AI use in government.
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