Governance and project management issues on the rise

Auditor-General's Report to Parliament

26 February 2013

Governance and project management issues on the rise

The taxpayer is being exposed to unnecessary financial risks with some key decisions and projects proceeding without proper governance and project management. Projects sometimes proceed with no business case and with poor risk management. Some service providers are being engaged with no service level agreements.

“Governance and project management need more focus. There was a significant increase in the number of recommendations I made in this area in 2012. Effective project governance is critical to ensuring project success and prudent use of taxpayer money,” said Mr Achterstraat.

On a positive note, government agencies are addressing significant recommendations in previous financial audit reports to Parliament.

“I am pleased to note that more than 85 per cent of the recommendations in my 2011 financial audit reports to Parliament were implemented in 2012. Whilst this is less than 100 per cent, NSW government agencies clearly acted on my significant recommendations,” said Mr Achterstraat.

However, NSW government agencies need to do more to follow up more detailed recommendations that are made directly to management.

Common issues included:

  • poor review of assets useful lives
  • failure to physically verify an asset’s existence and condition
  • incomplete property, plant and equipment registers
  • excessive annual leave balances
  • excessive overtime
  • incorrect leave balances

“One in three of my 2011 management letter recommendations were not actioned by agencies in 2012. This must improve. Agencies need to have the same level of commitment to addressing these recommendations as those reported to Parliament,” said Mr Achterstraat.

Further information

Barry Underwood, on 9275 7220 or 0403 073 664 and email barry.underwood@audit.nsw.gov.au.

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