Volume Eleven 2014 Focusing on Planning and Environment
The Auditor-General of New South Wales, Grant Hehir, has released his Volume Eleven 2014 Report to Parliament on agencies in the NSW planning and environment cluster.
Financial reporting improves but better financial management is required
The quality of financial reporting in the planning and environment cluster continues to improve with fewer reported misstatements over the last two years. The financial statements of all agencies within this cluster received unqualified audit opinions, except for one small agency where the audit is incomplete.
Many cluster agencies’ actual revenues, expenses, assets and liabilities varied from budget by more than five per cent, suggesting financial management and budgetary controls could be improved.
“Cluster agencies should strengthen budgetary controls and improve financial management to achieve better financial outcomes,” said the Auditor-General.
Contract management needs more attention
Agencies need to ensure that they properly record the effects of significant contracts in their financial statements. In one agency assets would have been significantly overvalued had accounting errors not been identified prior to finalising the audit of the financial statements.
“Agencies entering into complex contractual arrangements need to ensure these transactions are properly reflected in the financial statements,” said the Auditor-General.
“When negotiating complex transactions, agencies should involve a senior member of the finance team to provide advice on the accounting implications of proposed decisions,” he added.
Similar to findings in other Auditor-General’s reports, some agencies did not have a centralised contract register, making it difficult for management to oversee the services provided by external suppliers.
“A centralised contract register is key to effective contract management framework. It helps agencies manage contractual relationships well and achieve value for money outcomes,” said the Auditor-General.
Local councils financial reporting needs further improvement
While there was an improvement in the quality of local councils’ 2012-13 financial statements, seven local councils’ financial statements were qualified and 22 councils did not meet legislative reporting deadlines. Seven councils did not meet the 2013-14 reporting deadlines and four are yet to submit financial statements to the Office of Local Government.
“Local councils need to further improve the quality and timeliness of financial reporting,” said the Auditor-General.
State Plan targets and measures need refining
Some of the NSW Government’s strategic goals and targets that are relevant to planning and environment cluster agencies do not have measures to track progress nor baseline data to report against.
“Measures and baselines for all ‘NSW 2021 – A Plan to Make NSW Number One’ targets need to be developed so agencies can monitor progress and evaluate how well they are tracking against State goals,” said the Auditor-General.
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