Volume Three 2011

The Auditor-General, Mr Peter Achterstraat, today released his Volume Three Report to Parliament on the 2010-11 NSW Total State Sector Accounts. The audited budget surplus was $1,340 million.

The Auditor-General issued a qualified independent auditor’s opinion as the State could not identify the full extent and value of its land and infrastructure holdings for the eighth year in a row.

‘I am disappointed that after eight years the Government still has not addressed this issue,’ said Mr Achterstraat. ‘It is a matter of priority for the Government to identify the complete extent and value of State-controlled land and infrastructure.’

The quality and timeliness of financial reporting continues to concern the Auditor-General.

‘I found no significant improvements in the quality and timeliness of financial reporting from last year with almost half of all government agencies delivering late financial information to Treasury and there was no reduction in the number of errors,’ he said.

‘I am encouraged that agencies weathered the “accounting perfect storm” with the financial reporting process occurring at the same time as the Budget process and following significant agency restructures,” said Mr Achterstraat. ‘However, I am concerned that the NSW Government, an entity as large as any organisation listed on the stock exchange, employing more than 380,000 people with assets over $290 billion, and annual revenue of over $65 billion, does not have appropriate financial systems and processes to deliver quality and timely financial reports,’ he added.

The Auditor-General believes more can be done by the Government to address recent recommendations made by the Public Accounts Committee to achieve reporting improvements, including the Treasury mandating ‘early close procedures’ and developing better monthly reporting processes for government departments.

‘I have made a number of recommendations to improve the quality and timeliness of financial reporting across the sector,’ said Mr Achterstraat, ‘and I urge the Government to consider these recommendations as a priority.’

Further strategies for improvement should include more accountability from CEOs in delivering accurate and timely financial reporting and updated minimum qualifications for Chief Financial Officers.

‘I would also like the NSW Government to establish an independent Audit and Risk Committee for the whole-of-government,’ said Mr Achterstraat. ‘This committee would monitor the appropriateness and effectiveness of central agency directives in achieving the government’s policy intentions and follow up on whole-of-government recommendations.’

While the State maintained its AAA credit rating the Auditor-General warned against complacency.

‘It is important the Government maintains fiscal discipline if it wishes to hold on to its existing credit rating,’ he said.

Further information

Emily Watson, Governance Manager, on 02 9275 7108 or 0425 329 363 and email emily.watson@audit.nsw.gov.au