Auditor-General's Introduction
The Audit Office holds a privileged position as one of a small number of independent agencies that provide checks and balances integral to our system of government.
While our core business is the conduct of audits, our aim is to provide the entities we audit and Parliament with broader insights that inform and challenge government to improve outcomes for citizens.
Like any agency, we don’t have unlimited resources and must target our efforts to make the most of the resources at our disposal. The purpose of this audit work plan is to explain how we decide what to focus on, and what we intend to cover in the next year. It is also intended to give Parliament, the entities we audit and the broader community some certainty over future topics and the timing of our reports. That said, if circumstances change, or I receive requests for an audit, I reserve the right to add new audits or change the timing of planned audits.
We would welcome any comments you may have to improve either the audit work plan, the processes we adopt, or our decisions. We promote continuous improvement among the entities we audit, and therefore also want to continuously improve the things we do and way we do them.
Margaret Crawford
Auditor-General
31 July 2018
Our role
What we do
The Auditor-General reports to the NSW Parliament and is responsible for audits and related services. The Audit Office conducts financial and performance audits, principally under the Public Finance and Audit Act 1983 and the Local Government Act 1993, and examines allegations of serious and substantial waste of public money under the Public Interest Disclosures Act 1994.
In 2016–17, the Auditor-General’s mandate was extended to include local councils. This change was part of the NSW Government’s broader local government reform agenda, which aimed to create a modern system of local government with strong performing councils.
Financial Audits
Our financial audits provide an objective and independent opinion on the financial statements of NSW Government agencies, universities, local councils, and their controlled entities. They identify whether their financial statements comply with accounting standards, relevant laws, regulations and government directions.
As well as our statutory financial audits, we also perform additional assurance engagements, including providing assurance over Commonwealth grants and payments to the NSW Government and local government under Commonwealth legislation. In total, we issue over 1,300 assurance opinions each year.
Our financial audits also play an important role in effective public sector governance as we are required by Australian Auditing Standards to assess the adequacy of the financial reporting control environment of the entities we audit. The Public Finance and Audit Act 1983 also provides us with the mandate to report any waste or lack of probity or financial prudence in the management of public resources identified during the conduct of our audits.
Each year our financial audits will also examine a small number of specific topics across entities. We are in a unique position to look across the sectors we audit to identify common themes, issues or areas for improvement.
Reports on the results of each financial audit are provided to those charged with governance of the entity. Sector-wide reports are provided to Parliament through the Auditor-General’s Reports to Parliament. In the case of local councils, reports are also provided to the Chief Executive of the Office of Local Government.
| 600 audits | 1,300 assurance opinions | 12 reports to parliament |
Performance Audits
Our performance audits determine whether particular activities in NSW Government agencies and local councils are carried out effectively, economically and efficiently, and in compliance with all relevant laws.
The activities examined by a performance audit may include a government program, project, or service, all or part of an audited entity, or more than one entity. Performance audits can also consider issues which affect the whole state sector or local government sector.
Under the Government Advertising Act 2011, we are also required to conduct a performance audit of at least one government advertising campaign each year.
For NSW Government agencies, the results of each performance audit are reported to the head of the entity concerned, the responsible Minister, the Treasurer, and Parliament.
For local councils, the results of each performance audit are reported to the local council concerned, the responsible Minister, the Chief Executive of the Office of Local Government, and Parliament.
Agencies and local councils have the opportunity to provide a formal response to each performance audit of their activities, which is included in the Auditor-General’s Report to Parliament.
| 20 audits |
Compliance Reviews
Each year we conduct at least two compliance reviews to confirm that specific legislation, directions and regulations have been adhered to. One is at the discretion of the Auditor-General, and the other reviews whether Members of NSW Parliament complied with certain requirements outlined in the Parliamentary Remuneration Tribunal’s Determination.
| 2 reviews |
Focusing our efforts
There are a multitude of government activities and programs which we could audit. Our resources are limited, so we undertake a robust risk-based approach to identify and prioritise areas of focus, to deliver on our mandate. The diagram below details our internal processes for identifying and selecting performance audit topics and financial audit focus areas for the coming year.
Understanding the changing government landscape
PERFORMANCE AUDIT |
FINANCIAL AUDIT |
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In designing our program of performance audit topics, we consider the risks and challenges facing government, and opportunities for improved public sector accountability, governance and performance. We identify these risks and opportunities through research and consultation, and continuously scan the environment for emerging issues. The current areas of focus are: Planning for the future Governments play an important stewardship role. Their decisions need to consider intergenerational equity by ensuring that investment strategies are sustainable. Governments also need to consider the impact of their decisions on different parts of the community. Meeting community expectations for key services State and local governments exist to provide services to citizens, and citizens are playing a greater role in defining what services they want or need. Expectations about consultation, ease of access, timeliness, and customisation of services are rising. Governments face challenges to continually improve the way they plan and deliver services to meet these expectations and are increasingly moving to commissioning and partnership models with external providers. Governments also need to provide quality services for a growing and ageing population whilst working within a constrained financial environment. The scale of investment in infrastructure The NSW Government will invest $87.2 billion* in infrastructure over the next four years. Infrastructure investment of this size creates significant opportunities and risks. Competition for resources is high and maintaining the capability to manage and deliver projects effectively is challenging. Governments also need to plan effectively to ensure infrastructure built today will meet future needs. Managing the environment and natural resources Governments face challenges in balancing the use of natural resources to meet diverse interests, while ensuring resources are used sustainably into the future. Governments need to supply communities with water, produce energy, and manage threats to the environment and human health. They also need to support farming, industry and economic development. Ensuring good governance and transparency A range of checks and balances is needed to support public confidence in government decision making. To maintain trust, government agencies and local councils should act transparently, and in accordance with relevant legislation and policy. This is particularly important as the public sector increasingly engages with external partners to deliver services and provide a more contestable environment. Good governance arrangements should result in improved service delivery and more effective and efficient use of resources. Responding to digital disruption Global trends in digital technology provide governments with opportunities to interact with citizens in more immediate and responsive ways than was previously possible. Data is used to predict future demand for services, target interventions, respond to crises, and evaluate outcomes. When doing this, governments need to maintain secure digital environments that protect citizen interests, privacy, and autonomy. |
While we look for opportunities to improve public sector accountability, governance and administration, we also consider the risks and challenges to reporting the true financial position and performance of the State and local councils and how these may be addressed during our audits. Current risks or challenges that may impact financial reporting include: Valuation of non financial assets Some of the largest entities we audit will perform full physical asset revaluations during 2017–18. Risks and challenges to financial reporting include:
Valuation of actuarially assessed balances A large proportion of the entities we audit report provisions for employee benefits such as superannuation, which are actuarially assessed. Risks and challenges to financial reporting include:
Commercial transactions The NSW Government’s asset recycling strategy is set to continue with the proceeds from the sale of government assets used to help fund its infrastructure investment program. The NSW Government is at varying stages of completion of the following commercial transactions:
Risks and challenges to financial reporting include:
Impact of new accountings standards Over the next two years, the following new accounting standards will come into effect and are likely to have a significant impact on all sectors:
Risks and challenges to financial reporting include:
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Our plan for 2018-19
Performance Audits
The following performance audits are planned for completion in 2018–19. Our aim is to complete 20 audits*.
July to September 2018 quarter
- Antisocial behaviour in social housing (Family and Community Services (FACS) cluster)
- Property asset utilisation (Finance, Services and Innovation (FSI) cluster)
- Premier’s and State priorities – assessing performance (Premier and Cabinet (PC) cluster)
- Mobile speed cameras (Transport cluster)
October to December 2018 quarter
- Newcastle urban transformation and transport program (Transport cluster)
- Government advertising (PC cluster)
January to March 2019 quarter
- Supply of secondary teachers in STEM‑related disciplines (Education cluster)
- Management of the NSW firearms licensing and registration scheme (Justice cluster)
- Access to transport for people with a disability (Transport cluster)
- Waste management in local government (Local government)
- Councils management of an activity (Local government)
- Mental health support services in schools (Education cluster)
April to June 2019 quarter
- Amalgamation: Managing staffing implications (Local government)
- Managing the growth of the NSW prison population (Justice cluster)
- Grants to non‑government organisations by the Department of Family and Community Services (FACS cluster)
- Ensuring contract management capability in government (FSI cluster)
- Aboriginal health plan (Health cluster)
- Management of native vegetation (Planning and Environment cluster)
- Biosecurity risk management (Industry cluster)
Financial Audits
We will carry out almost 600 statutory financial audits of NSW Government agencies, universities and local councils financial statements, issuing over 1,300 assurance opinions. We will comment on the results of these engagements and our examination of Cluster‑specific* and across‑the‑board focus areas in the following Auditor‑General’s Reports to Parliament:
Report on State Finances (October to December 2018 quarter)
This report will focus on the State’s 2017–18 consolidated financial statements, and will comment on the key matters that have been the focus of our audit and highlight significant factors that have contributed to the State’s financial results.
Internal Controls and Governance (October to December 2018 quarter)
This report will bring together the findings and recommendations from our 2017–18 financial audits that relate to the internal controls and governance of the 40 largest NSW Government agencies.
Eight State Sector Cluster Reports (October to December 2018 quarter)
Our cluster based reports will analyse the results of the 2017–18 financial statement audits of NSW Government agencies and will comment on internal controls and areas of particular interest in order to provide insights. Our cluster reports cover the audits of:
- Central Agencies (Treasury, Premiers and Cabinet, and the Finance, Services and Innovation clusters)
- Education
- Family and Community Services
- Health
- Industry
- Justice
- Planning and Environment
- Transport.
Local Government (January to March 2019 quarter)
This report will bring together findings and recommendations from our 2017–18 financial audits of local councils and will comment on financial reporting and sustainability, internal controls and governance, and areas of particular interest in order to provide insights.
Universities (April to June 2019 quarter)
This report will analyse the results of the financial statement audits of the ten NSW universities and their controlled entities for the year ended 31 December 2018. It will comment on financial reporting and performance, internal controls and governance, and areas of particular interest in order to provide insights.
Compliance Reviews
The following compliance reviews are planned for completion in 2018–19:
Use of consultants (July to September 2018 quarter)
This compliance review will:
- assess whether NSW Government agencies are complying with consultancy disclosure requirements in their annual report
- evaluate whether they comply with NSW procurement guidelines when procuring consultancy services
- assess the effectiveness of the NSW Procurement Board in fulfilling its functions to support and oversee agencies’ procurement of consultancy services.
Members’ Additional Entitlements (July to September 2018 quarter)
We conduct and report to Parliament on an annual external review of whether Members of NSW Parliament complied with certain requirements outlined in the Parliamentary Remuneration Tribunal’s Determination.
All clusters - Financial audit
As well as providing an opinion on the financial statements of the entities we audit, we will examine and report on several across-the board audit focus areas in the Auditor-General's Reports to Parliament. We will also examine and report on cluster-specific audit focus areas. These are detailed in the next section of this work plan.
AUDIT FOCUS AREAS* |
WHY FOCUS ON THIS TOPIC? |
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Infrastructure delivery |
Delivering infrastructure is one of the key Premier’s priorities. Potential risks include:
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Asset maintenance |
Maintenance planning is central to managing long lasting assets over their intended life spans. Potential risks of poor asset maintenance include:
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Use of credit cards** |
The volume of credit card transactions and travel claims has increased over the past five years. While there are considerable management savings from their use, potential risks include:
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Management of IT service providers** |
Agencies oversight of outsourced IT service providers. Potential risks include:
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** Commentary on this area of focus will be included in the report on Internal Controls and Governance.
Areas of focus for each cluster
Education cluster
The Education cluster delivers and regulates education services for NSW students from early childhood to secondary school and works closely with the non-government school sector. The cluster also works to advance the wellbeing of Aboriginal people.
PERFORMANCE AUDIT PROGRAM
RISK AND CHALLENGES |
PLANNING AUDITS TO 30 JUNE 2019 |
PLANNED
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Meeting community expectations on delivering key services |
Mental health support services in schools Schools play a critical role in helping children and young people engage with the world around them. The $167 million Supported Students, Successful Students initiative commenced in 2015. Some of the additional resources under the initiative included 236 new school counselling/psychology positions, $51 million for wellbeing services equivalent to an additional 200 Student Support Officers, 500 graduate scholarships to boost the recruitment of school counsellors, psychologists and wellbeing officers. We will consider whether these additional resources effectively support the mental health and wellbeing of students when determining the scope of this audit. |
January 2019 quarter |
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Planning for the future |
Supply of secondary teachers in STEM‑related disciplines Over recent years, Governments have paid increasing attention to student learning in the Science, Technology, Engineering and Mathematics (STEM) disciplines. Quality teaching is seen as key to lifting student engagement and performance in these areas. The NSW Department of Education’s most recent publicly available workforce planning projections identified shortages in secondary teachers qualified in STEM‑related disciplines across the state. Our audit will examine the Department’s approach to workforce planning and its administration of incentive programs to attract teachers to STEM‑related disciplines. |
January 2019 quarter |
RISKS AND CHALLENGES |
PLANNED AUDITS POST 30 JUNE 2019 |
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Ensuring good governance and transparency |
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Planning for the future |
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FINANCIAL AUDIT
RISK AND CHALLENGES |
PLANNING FOCUS AREAS FOR 2017-18 FINANCIAL AUDITS |
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Migration of payroll data to a new IT system |
The Department of Education’s new HR/payroll IT system will be rolled out in four progressive releases in 2018 and was initially expected to conclude by June 2018. Release of the last two stages is planned to be completed by August 2018. We will review the internal controls in place that ensure the completeness and accuracy of migrated payroll data to the new system. |
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Valuation of the Department’s |
The Department conducted a life cycle costing project to prepare for the full revaluation of its land and building assets in 2017–18. We will review how the results of the life cycle costing project informed the revaluation process to ensure the Department’s assets are recorded at fair value. |
Family and Community Services cluster
The Family and Community Services cluster supports people with disability, vulnerable and disadvantaged children, young people and families. The cluster directly supports people across New South Wales through its own services and through funding non‑government organisations to deliver specialist support services.
PERFORMANCE AUDIT PROGRAM
RISK AND CHALLENGES |
PLANNING AUDITS TO 30 JUNE 2019 |
PLANNED
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Meeting community expectations on delivering key services |
Antisocial behaviour in social housing In 2015, the NSW Parliament made amendments to the Residential Tenancies Act 2010 (NSW) to address antisocial behaviour through a ‘strikes’ approach. This approach aims to balance the responsibilities of tenants with the rights of neighbours and the broader community while creating a better social housing experience and safe, stable communities. Our audit will examine how effectively the Department manages antisocial behaviour in public housing. |
July 2018 quarter |
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Ensuring good governance and transparency |
FACS provides grants to NGOs to deliver many of its services, including services for people with disabilities, vulnerable children and young people, homeless people, and people using social housing. FACS is increasingly transferring responsibility for delivering services to NGOs, but it retains responsibility for ensuring these services are high quality and help people achieve good outcomes. The scope of our audit will include an examination of how the Department ensures good outcomes through the use of NGOs to deliver services. |
April 2019 quarter |
RISKS AND CHALLENGES |
PLANNED AUDITS POST 30 JUNE 2019 |
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Meeting community expectations on delivering key services |
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Planning for the future |
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FINANCIAL AUDIT
RISK AND CHALLENGES |
PLANNING FOCUS AREAS FOR 2017-18 FINANCIAL AUDITS |
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Reducing corporate costs in line with the reduction in front line service delivery |
We will assess the financial impact of FACS’ commissioning approach including, moving to a smaller and different workforce and the corporate support needed for the future. |
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Escalating costs to maintain social housing |
New maintenance contracts commenced in April 2016. We will analyse the impact of these new arrangements on maintenance costs. |
| Implementing a new IT system (ChildStory) | ChildStory is an IT system used to manage operational and financial processes for supported children and young people. We will review the controls in place that ensure the security of child protection data. |
Finance, Services and Innovation cluster
The Finance, Services and Innovation cluster is responsible for customer and government service delivery, property and asset management, regulation services, revenue administration, as well as information and communications technology, digital government and innovation.
PERFORMANCE AUDIT PROGRAM
RISK AND CHALLENGES |
PLANNING AUDITS TO 30 JUNE 2019 |
PLANNED
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Meeting community expectations on delivering key services |
In response to recommendations of the Property Asset Utilisation Taskforce the NSW Government set out in 2012 operational and guiding property principles that Property NSW and NSW Government agencies must follow. Property NSW was assigned the mandate to improve the management of the NSW Government's owned and leased real property portfolio. Our audit will examine the effectiveness of Property NSW in managing the NSW Government’s property portfolio. |
July 2018 quarter |
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Ensuring good governance and transparency |
Ensuring contract management capability in government NSW Government agencies are increasingly delivering services and projects through contracts with third parties. These contracts can be complex and governments face challenges in negotiating and implementing them effectively. A robust contract management framework helps ensure all parties meet their obligations, contractual relationships are well managed, agencies achieve value for money and deliverables meet the required standards and agreed timeframes. Our audit will examine the contract management capabilities in one or more NSW Government agencies. |
April 2019 quarter |
RISKS AND CHALLENGES |
PLANNED AUDITS POST 30 JUNE 2019 |
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Responding to digital disruption |
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FINANCIAL AUDIT
RISK AND CHALLENGES |
PLANNING FOCUS AREAS FOR 2017-18 FINANCIAL AUDITS |
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Achieving State revenue targets |
Revenue NSW supports the State’s finances by collecting state taxes, duties and fines, which totalled $29.4 billion in 2016–17. We will assess the controls in place that ensure the complete and accurate recording of the State’s largest revenue streams and assess the performance of Revenue NSW against key performance information. |
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Migration of agency finance data to a new IT system |
During 2017–18, as part of a staged migration program, business units within the Department of Finance, Services and Innovation and cluster agencies migrated their finance data to SAPConnect (managed by GovConnect). We will review the internal controls in place that ensure the completeness and accuracy of data migrated to the new system, as well as aspects of project governance. |
| Implementing government reforms | Service NSW is administering the refund of an estimated $265 million to CTP policy holders on behalf of the State Insurance Regulatory Authority. We will evaluate the controls over this process. |
Health cluster
The Health cluster works to protect, maintain and improve the health and wellbeing of residents in New South Wales.
PERFORMANCE AUDIT PROGRAM
RISK AND CHALLENGES |
PLANNING AUDITS TO 30 JUNE 2019 |
PLANNED
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Ensuring good governance and transparency |
Governance of local health districts In 2011, NSW Health established local health districts, speciality health networks and local health district boards to support devolving the management and governance of the State’s public healthcare services and empower local services. Local health districts and speciality health networks were made responsible for determining how to deliver healthcare services within the framework of a Service Agreement with the Ministry of Health. Our audit will examine the effectiveness of governance arrangements between the Ministry and local health districts. |
January 2019 quarter |
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Meeting community expectations on delivering key services |
The Aboriginal Health Plan is a result of the NSW Government's commitment to close the health gap between Aboriginal and non‑Aboriginal people in NSW. The strategic directions of the Plan consider key issues, such as how to build respectful, trusting and effective partnerships between NSW Health and the Aboriginal communities it serves. The Plan contains a strong focus on strengthening performance monitoring, management and accountability. The scope of our audit will include an assessment of whether NSW Health has established effective partnerships to deliver the objectives of the Plan. |
April 2019 quarter |
RISKS AND CHALLENGES |
PLANNED AUDITS POST 30 JUNE 2019 |
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Meeting community expectations on delivering key services |
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| Ensuring good governance and transparency |
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FINANCIAL AUDIT
RISK AND CHALLENGES |
PLANNING FOCUS AREAS FOR 2017-18 FINANCIAL AUDITS |
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Procurement practices |
We will evaluate the design and implementation of controls in the procurement and vendor management processes for high value/high volume vendors. |
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Capital projects and asset maintenance |
Health Infrastructure manages the planning, design and delivery of health infrastructure capital works in NSW. We will review the governance and internal controls over the delivery of selected projects. |
| Valuation of property, plant and equipment | Health entities manage significant land, building and infrastructure assets. Seven health entities will perform comprehensive revaluations in 2017–18. We will review the health entities’ governance and internal controls that ensure the values are accurately reflected in the financial statements. |
Industry cluster
The Industry cluster leads the State’s promotion of New South Wales as the place to invest and produce goods and services. The cluster is responsible for developing a skilled workforce, bringing new investors to New South Wales, and managing land and natural resources to grow primary and other industry sectors.
PERFORMANCE AUDIT PROGRAM
RISK AND CHALLENGES |
PLANNING AUDITS TO 30 JUNE 2019 |
PLANNED
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Managing the environment and natural resources |
A strong biosecurity system is vital for protecting our primary industries, our economy and our community. In 2013, the NSW Government released the NSW Biosecurity Strategy 2013–2021, that is based on the principle that biosecurity is a shared responsibility between governments, industries and individuals. The Strategy outlines how government, industry and the community need to work together to identify, prevent, eradicate, minimise, respond to and manage biosecurity risks. Our audit will examine how effectively the Department of Primary Industries has implemented the Strategy. |
April 2019 quarter |
RISKS AND CHALLENGES |
PLANNED AUDITS POST 30 JUNE 2019 |
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Ensuring good governance and transparency |
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FINANCIAL AUDIT
RISK AND CHALLENGES |
PLANNING FOCUS AREAS FOR 2017-18 FINANCIAL AUDITS |
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Accounting for stadium assets |
The NSW Government has announced significant investment in new stadia and the potential demolition of Allianz stadium. We will review the impact of the government’s announcements on the value of existing stadiums. |
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Recognition of Crown Land |
We will review whether Crown Land is accurately recognised as an asset by the appropriate entity. |
| Financial reporting by Crown Reserve Trusts (including cemetery trusts) | Approximately 700 reserve trusts managed by Trust Boards do not prepare the financial statements required under the Public Finance and Audit Act 1983. To remedy this, the Treasury and the Department are working to clarify the financial reporting obligations for these trusts. We will review progress on resolving this issue. |
Justice cluster
The Justice cluster delivers legal, law enforcement and emergency services across the State and plays the lead role in commemorating the legacy of servicemen and woman.
PERFORMANCE AUDIT PROGRAM
RISK AND CHALLENGES |
PLANNING AUDITS TO 30 JUNE 2019 |
PLANNED
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Meeting community expectations on delivering key services |
Management of the NSW firearms licensing and registration scheme The Firearms Act 1996 aims to establish an integrated licensing and registration scheme for all firearms. The NSW Police Force, responsible for administering the Firearms and Prohibited Weapons legislation, manage the Firearms Registry. The scope of our audit will include an assessment of how effectively NSW Police is implementing the scheme, including how applicants are assessed against its requirements. |
January 2019 quarter |
| Planning for the future |
Managing the growth of the NSW prison population Between 2011 and 2016, the prison population in NSW rose by over 30 per cent. This placed significant pressure on existing prison infrastructure. Whilst the growth in the State’s prison population is now slowing, the prison system continues to operate at close to capacity. In the 2016–17 Budget, the NSW Government announced $3.8 billion over four years for the Prison Bed Capacity Program to address the increased population. Our audit will examine how well the government is predicting and managing prison bed capacity. |
April 2019 quarter |
RISKS AND CHALLENGES |
PLANNED AUDITS POST 30 JUNE 2019 |
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Meeting community expectations on delivering key services |
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FINANCIAL AUDIT
RISK AND CHALLENGES |
PLANNING FOCUS AREAS FOR 2017-18 FINANCIAL AUDITS |
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Rectification of identified IT control issues |
In 2016–17, the Department of Justice implemented a new SAP finance and payroll system and significant control deficiencies were identified. We will review the internal controls implemented that support the reporting of reliable and accurate financial and payroll data. |
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Project management |
The Justice cluster is budgeted to spend $975.8 million on capital projects in 2017–18. For a selection of projects, we will review project cost allocation, and will report whether these projects are being delivered on time and on budget. |
| Valuation of land and buildings | The Department is revaluing its land and buildings during 2017–18. We will review the Department’s governance and internal controls that ensure asset registers are complete and the values are accurately reflected in the financial statements. |
Planning and Environment cluster
The Planning and Environment cluster’s key focus areas include addressing housing affordability, improving liveability, cultivating a vibrant arts sector, ensuring energy and water security, and protecting the State’s environment and heritage, while promoting safe development of natural resources.
PERFORMANCE AUDIT PROGRAM
RISK AND CHALLENGES |
PLANNING AUDITS TO 30 JUNE 2019 |
PLANNED
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Managing the environment and natural resources |
Management of native vegetation The Biodiversity Conservation Act 2016 and Local Land Services Amendment Act 2016 were introduced as part of a package of reforms to allow land owners to:
Transitioning to this new approach commenced in August 2017. The scope of our audit will include an examination of whether the reforms are achieving their intended objectives. |
April 2019 quarter |
RISKS AND CHALLENGES |
PLANNED AUDITS POST 30 JUNE 2019 |
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Managing the environment and natural resources |
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| Meeting community expectations on delivering key services |
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FINANCIAL AUDIT
RISK AND CHALLENGES |
PLANNING FOCUS AREAS FOR 2017-18 FINANCIAL AUDITS |
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Migration of payroll data to a new IT system |
In 2017–18, the Department of Planning and Environment Cluster Corporate Services migrated the payroll data for the Office of Environment and Heritage, the Environment and Protection Authority, the Royal Botanic Gardens Trust and other entities to a new IT system, SAP HR. We will review the internal controls in place that ensure the completeness and accuracy of payroll data migrated to the new system. |
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Valuation of collection assets |
Some of the major cultural institutions such as the Australian Museum and the Library Council of New South Wales are revaluing their collection assets in 2017–18. We will review those agencies governance and internal controls that ensure asset registers are complete and the value of collection assets are accurately reflected in the financial statements. |
Premier and Cabinet
The Premier and Cabinet cluster supports the Premier, Deputy Premier and Cabinet. The cluster supports the delivery of the government’s objectives, coordinates policy and services, and facilitates stewardship of the public service.
PERFORMANCE AUDIT PROGRAM
RISK AND CHALLENGES |
PLANNING AUDITS TO 30 JUNE 2019 |
PLANNED
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Ensuring good governance and transparency |
Premier’s and State priorities ‑ assessing performance The Premier’s Priorities reflect a whole‑of‑government commitment to tackling important issues for the people of New South Wales. The Premier’s Implementation Unit (PIU) oversees reporting of progress on the 12 Premier’s Priorities, and helps drive delivery of targets in collaboration with responsible NSW Government agencies. Our audit will examine progress on the Premier’s Priorities, and how effective the PIU is in helping agencies progress related targets. |
July 2018 quarter |
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Under the Government Advertising Act 2011 the audit office must conduct a performance audit of the activities of one or more NSW Government agencies in relation to government advertising campaigns of the agency in each financial year. The 2017–18 campaign (or campaigns) we will audit include the TAFE NSW Semester 1 student advertising campaign, and the State Insurance Regulatory Authority Green Slip Reform campaign |
October 2018 quarter | |
RISKS AND CHALLENGES |
PLANNED AUDITS POST 30 JUNE 2019 |
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Ensuring good governance and transparency |
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| Planning for the future |
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FINANCIAL AUDIT
RISK AND CHALLENGES |
PLANNING FOCUS AREAS FOR 2017-18 FINANCIAL AUDITS |
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Remediation of the Barangaroo site |
The Barangaroo Development Authority has estimated the cost to remediate the Barangaroo site and a portion of Hickson Road at $281 million. The Authority expects to complete the restoration work by September 2020. We will review project risk management and cost estimations. |
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Grants administration |
The Department of Premier and Cabinet is responsible for monitoring milestones for the $1.3 billion Restart grants along with grants to Regional NSW. We will review the Department’s processes and internal controls over grant payments and any financial reporting implications. |
Transport cluster
The Transport cluster plans, delivers and manages infrastructure and services across all modes of transport, including road,rail, bus, ferry, light rail, cycling and active transport.
PERFORMANCE AUDIT PROGRAM
RISK AND CHALLENGES |
PLANNING AUDITS TO 30 JUNE 2019 |
PLANNED
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Meeting community expectations on delivering key services |
Roads and Maritime, in consultation with the NSW Police Force and the NSW Centre for Road Safety, manages the deployment of mobile speed cameras to ensure the program delivers maximum road safety benefits and supports police enforcement activities. Our audit will examine whether the mobile speed camera program is managed to maximise road safety. |
July 2018 quarter |
| The scale of investment in infrastructure |
Newcastle Urban Transformation and Transport Program The Revitalising Newcastle program involves around $650 million in government funding for a range of urban renewal and transport activities. Our audit will examine administration of this program including consultation, governance, decision‑making and the economy of the approach chosen to achieve the program objective. |
October 2018 quarter |
| Planning for the future |
Access to transport for people with a disability According to the ABS, one in five Australian's have reported living with a disability. Restrictions to accessible and integrated transport infrastructure can limit the participation of a person with a disability in work, education or other community and economic activities and opportunities. Our audit will examine how well NSW public transport agencies are addressing access to public transport for people with a disability. |
January 2019 quarter |
RISKS AND CHALLENGES |
PLANNED AUDITS POST 30 JUNE 2019 |
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Meeting community expectations on delivering key services |
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| The scale of investment in infrastructure |
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| Responding to digital disruption |
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FINANCIAL AUDIT
RISK AND CHALLENGES |
PLANNING FOCUS AREAS FOR 2017-18 FINANCIAL AUDITS |
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Project management |
The Transport cluster is budgeted to spend approximately $11.3 billion on capital projects in 2017–18. For a selection of projects, we will review project cost allocation, budget monitoring, and reporting to steering committees and those charged with governance. |
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Transition of RailCorp to |
RailCorp is expected to transition to the Transport Asset Holding Entity from 1 July 2019. While not expected to have a significant impact on financial reporting for 2017–18, we will continue to monitor developments and report on potential impacts for Transport and the State due to the future change in status from a not‑for‑profit entity to a for‑profit entity. |
| Impairment of Transport assets | The Transport sector is exploring digital and technological advances that could disrupt traditional service delivery models and the useful lives of traditional transport assets. Changing safety expectations and design specifications can also lead to asset useful lives being shortened. We will review Transport’s identification of impaired assets and remaining useful life assessment in the context of this changing environment. |
Treasury cluster
Treasury is the government’s principal financial and economic adviser, providing leadership in financial and risk management across the public sector.
PERFORMANCE AUDIT PROGRAM
RISKS AND CHALLENGES |
PLANNED AUDITS POST 30 JUNE 2019 |
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Ensuring good governance and transparency |
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FINANCIAL AUDIT
RISK AND CHALLENGES |
PLANNING FOCUS AREAS FOR 2017-18 FINANCIAL AUDITS |
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Implementing new IT systems |
The Treasury has implemented PRIME, a new whole‑of‑government financial management and budgetary system. We will review the internal controls in place that ensure the completeness and accuracy of data migrated to the new system, as well as aspects of project governance. |
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Managing the State’s liquidity |
The State is reforming cash and liquidity management. We will review the governance and controls over whole‑of‑government liquidity management. |
| Sale of Snowy Hydro Limited and Sydney Motorway Corporation |
The State is in the process of selling its stake in Snowy Hydro Limited to the Commonwealth Government and 51 per cent of Sydney Motorway Corporation. We will review any transactions completed in 2017–18. |
Local Government sector
New South Wales has 128 local councils servicing a specific geographic area, and ten county councils formed for specific purposes, such as water supply, flood plain management or the eradication of noxious weeds. Each council provides a unique range of services to meet its communities’ needs. The mix is influenced by a range of factors including population density, demographics, the local economy, and geographic and climatic characteristics.
PERFORMANCE AUDIT PROGRAM
RISK AND CHALLENGES |
PLANNING AUDITS TO 30 JUNE 2019 |
PLANNED
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Meeting community expectations on delivering key services |
Waste management in local government Communities expect local councils to collect and dispose of their household waste effectively and economically. They also expect local council waste services to include recycling, reuse, green waste, declining land fill and safe handling of toxic waste. Our audit will examine how selected councils are managing their waste services. |
January 2019 quarter |
| Ensuring good governance and transparency |
Council’s management of an activity Our audit will examine in‑depth, an activity of a local council to assess its efficiency, effectiveness or economy. The selected activity will be of particular importance or relevance to that council and its local communities. |
January 2019 quarter |
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Amalgamation: Managing staffing implications Local councils have faced a range of challenges in ensuring amalgamations progress smoothly. One such challenge is in ensuring they carefully balance the opportunity to create efficiencies and economies with the rights and welfare of council staff. Our audit will examine how selected councils have addressed these challenges. |
April 2019 quarter | |
RISKS AND CHALLENGES |
PLANNED AUDITS POST 30 JUNE 2019 |
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The scale of investment in infrastructure |
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| Meeting community expectations on delivering key services |
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| Ensuring good governance and transparency |
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FINANCIAL AUDIT
RISK AND CHALLENGES |
PLANNING FOCUS AREAS FOR 2017-18 FINANCIAL AUDITS |
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Procurement practices and contract management |
We will review a selection of local councils’ governance and internal controls over procurement and contract management. |
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Valuation of infrastructure, property, plant and equipment |
Local councils manage significant infrastructure assets and conduct revaluations on a regular basis. For those local councils performing a revaluation in 2017–18, we will review whether their asset registers are complete and the values are accurately reflected in the financial statements. |
| Controls over IT systems |
We will review local councils’ response to IT risks relevant to financial reporting processes, in particular those that address:
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