Finance, Services and Innovation 2016

The quality of financial reporting remains high despite significant control deficiencies at the two organisations that provided information technology and transactional services to the Finance, Services and Innovation cluster. These are the key findings of a report released today by the New South Wales Auditor-General, Margaret Crawford.

The Finance, Services and Innovation cluster is responsible for customer and government service delivery, property and asset management, regulation and insurance services, revenue administration, and ICT, digital government and innovation.

Quality financial reporting remains high

Unqualified audit opinions were issued on all cluster agencies’ reports. Cluster agencies substantially completed early close procedures but some agencies using the services of GovConnect were unable to provide all working papers by due dates.

Ineffective controls at service providers

The Department of Finance, Services and Innovation did not maintain an effective system of internal control at ServiceFirst nor did it effectively manage the transition from ServiceFirst to GovConnect, which occurred during 2015-16. GovConnect, and previously ServiceFirst, provided information technology and transactional services to agencies within the NSW Public Sector.

‘The Department will need to closely monitor GovConnect’s remedial actions and resolve any remaining transition issues between ServiceFirst and GovConnect’ said the Auditor-General . ‘They should also re-examine the significant transition breakdowns from ServiceFirst to GovConnect and apply learnings to projects currently being transitioned to the private sector.’

Agencies using GovConnect services were unable to rely on controls over financial transactions and information, increasing the risk of fraud, error and  inappropriate access to information. This increased audit risks, resources and costs in auditing the financial statements of user agencies.

Sustainability of home warranty scheme at risk with funding shortfall

The Home Building Compensation Fund reported a significant funding shortfall because premiums have been consistently less than expected claims costs. The scheme requires urgent strategies to address the funding shortfall or strengthen oversight processes to reduce claim costs. Claims have increased 46 per cent from $81.4 million in 2011 to $119 million in 2016. 

Further information

Please contact Barry Underwood on 9275 7220 or 0403 073 664; email