Most financial statements were submitted and audits completed by statutory deadlines

The Audit Office completed the audits and issued the audit opinions on all cluster agencies’ financial statements within statutory deadlines, except for the Department. The Department provided signed financial statements to the Audit Office on 29 September 2017, and the audit opinion was issued two business days later on 4 October 2017. The statutory deadline for the Department's audit opinion was 3 October 2017.

Agencies completed early close procedures, but opportunities for improvement noted

Justice cluster agencies complied with Treasury’s mandatory early close requirements with all agencies submitting proforma financial statements, and non-financial asset valuations performed within the due date. However, some agencies can improve the effectiveness of early close procedures by:

• assessing the impact of significant and complex transactions, including machinery of government changes
• reconciling inter-agency balances and transactions with other government agencies
• reconciling and reviewing key account balances
• assessing the impact of new and revised accounting standards, such as the impact arising from related party disclosures.

Some agencies' procedures were impacted by the Department's Justice SAP, and Business Support Centre implementations, such as their ability to reconcile inter-agency balances and transactions, and to reconcile and review key account balances.

Treasury reduced the scope of mandatory early close procedures

Treasury Circular 16/13 'Agency guidelines for the 2016–17 Mandatory Early Close' limited the mandatory early close procedures to non-financial asset valuations and proforma financial statements. Treasury encouraged agencies to maintain the disciplines implemented over the last few years and recommended they complete the additional good practice procedures listed in the circular.

Early close procedures aim to bring forward year-end activities, such as valuing assets and resolving financial reporting issues, to reduce reporting timeframes and improve quality.

Victims of violent crime are entitled to financial support, even if the offender is unknown or not convicted. Restitution orders can be levied against convicted offenders to recover the financial support paid to victims. Levies are paid into the Victims Support Fund.

The NSW Police Force

The cost of the Police Blue Ribbon insurance scheme remains above the statutory target

NSW Police data shows that the cost of the NSW Police Death and Disability scheme (Police Blue Ribbon scheme) for the year ended 30 June 2017 was 5.45 per cent of total NSW Police Officers' remuneration (six per cent in 2016). This cost remains higher than the statutory target of 4.6 per cent.

The cost of the Police Blue Ribbon Scheme premium fell 10.4 per cent to $109 million in 2016–17 ($122 million in 2015–16). The decrease was mainly due to improved claims' experience and Total and Permanent Disability incidence rate. This decrease was partially offset by salary increases.

Despite the recent decrease, the cost of the scheme as a percentage of total NSW Police Officers' remuneration continues to remain above the statutory target rate of 4.6 per cent, as it has since 2012.

The breakdown of NSW Police’s insurance schemes over the past five years is shown below:

In 2016–17, the old Death and Disability scheme continued to recognise net income because recoveries exceeded payouts. The scheme required officers who received Total and Permanent Disability payments to pay back the Partial and Permanent Disability benefits they had previously received.

NSW Police received 32 recoveries from officers in 2016–17 (55 in 2015–16). The average value of each was $408,000 ($409,000), which is 0.2 per cent lower than the previous year. NSW Police Officers contribute up to 1.8 per cent of their salary towards the cost of the Blue Ribbon premium. The remainder is funded by NSW Police. Contributions by Police Officers in 2016–17 totalled $26.4 million ($26.2 million) representing 24.1 per cent (21.5 per cent) of the total premium.

Three insurance schemes cover death and disability for NSW Police Officers:

• Death and Disability Scheme (old scheme)
• Police Blue Ribbon Insurance Scheme (new scheme)
• Self managed income protection (for officers not covered by the insurer).

Monitoring the performance of these schemes is important to ensure adequate funds are available to meet claims, premiums are kept at a reasonable level and NSW Police can budget to meet the costs. In 2011, a statutory target was determined which requires the cost of the Blue Ribbon scheme to fall below 4.6 per cent of NSW Police Officers’ remuneration.

In our recent 2016 performance audit follow up ‘Preventing and Managing Worker Injuries’, NSW Police continued its Workforce Improvement program initiatives and introduced further injury prevention initiatives, improved the quality of performance information and reporting on injured officers and transitioned many initiatives into business as usual practices.

Paid income protection claims continue to grow, according to NSW Police

During 2016–17, the number of income protection claims increased to 583 (467 in 2015–16). The Blue Ribbon scheme paid $14.0 million for claims in 2016–17 ($10.3 million) with an average claim payment of $24,029 ($22,049 in 2015–2016).

Total claim payments are expected to grow over the next few years as existing claims are paid and new claims are received. Claims are paid monthly and may extend to a maximum of seven years under this policy.

NSW Police’s self managed income protection scheme covers NSW Police Officers who did not meet the ‘at work’ test when the new scheme started on 20 January 2012. The scheme's cost decreased to $3.2 million in 2016–17 ($4.0 million in 2015–16).

The average claim paid was $26,049 ($27,257 in 2015–2016). 

Emergency Services

Fire and Rescue NSW Death and Disability Scheme

The death and disability liability has almost doubled over the past five years

The Scheme’s liability is $179 million at 30 June 2017, almost double the $92 million recorded at 30 June 2013. Fire and Rescue NSW advise that the liability is projected to increase to $257 million by 30 June 2022.

The scheme liability is expected to increase each year as new claims are made and those claims result in pensions, which on average are payable for 15 years. Therefore, the cost of new claims incurred each year exceeds payments for existing claims.

Fire and Rescue NSW's projections over the next five years are shown in the following graph:

The Fire and Rescue NSW Death and Disability Scheme was established in 2003, to fund death, total and permanent incapacity and partial and permanent incapacity benefits for permanent and retained firefighters. Partial and permanent incapacity payments are paid by Fire and Rescue NSW while death and total permanent incapacity payments are paid by the Crown Employees (NSW Fire Brigades Firefighting Staff Death and Disability) Superannuation Fund (Crown Fire Fund).

The Office of the NSW Rural Fire Service will implement ‘valued’ inventory controls on 1 July 2018

The Office of the NSW Rural Fire Service advises it will revise its accounting practices and commence recognising and valuing inventory in its balance sheet, and expensing it when it is consumed from 1 July 2018.

Currently these inventories, which are warehoused until required in emergencies, are expensed when they are purchased. In 2015, the Independent Commission Against Corruption recommended the Office of the NSW Rural Fire Service account for its inventories to help prevent further frauds. Two of the four corruption prevention recommendations have been implemented. The remaining two recommendations, dealing with inventory are planned for implementation on 1 July 2018. 

Staffing levels in the Department, the Legal Aid Commission of New South Wales, and the Office of the Director of Public Prosecutions increased in response to activity within the Justice cluster, such as increases in the number of inmates, increased court registrations, and initiatives to address the District Court backlog.

NSW Trustee and Guardian's salary and wages fell by 6.4 per cent, following redundancies associated with the operational changes referred to below. The full time equivalent positions in the Police Integrity Commission also decreased following administrative changes.

The Office of the NSW State Emergency Service increased their staffing levels to fill vacant positions, and to work on corporate projects. The increase in salary and wages was within the Office's approved budget.

The NSW Trustee and Guardian’s service fees fell by 8.1 per cent

The NSW Trustee and Guardian implemented a new fee structure from 1 July 2016, following recommendations from the Independent Pricing and Regulatory Tribunal (IPART) in October 2015.

Under the new structure, NSW Trustee and Guardian's service fees decreased by $5.3 million or 8.1 per cent to $60.0 million in 2016–17. This was offset by NSW Government contributions of $15.1 million ($941,000 in 2015–16), including a one-off $9.0 million reimbursement of redundancy payments.

The new structure reduced investment management fees by 40 to 65 basis points to 10 basis points (0.10 per cent), and increased the management fee on directly managed Financial Management clients by 30 basis points (0.30 per cent) to 1.4 per cent.

The NSW Trustee and Guardian responded to the new fee structure by changing aspects of its operations to generate efficiencies. Changes included a new business model involving a centralised Service Centre and revised branch and specialist services. The new business model is expected to enable NSW Trustee and Guardian to break even over the next two years.

The number of FTE employees with annual leave balances above the State's target: 

• decreased in the Department by 177 employees (4.8 per cent)
• decreased at NSW Police by 466 employees (5.2 per cent)
• increased in emergency services agencies by 89 employees (3.6 per cent).

NSW Police advise:

• recent improvements in its leave management system allows Commands to enter annual leave into the system in advance. Staff can now view projected leave balances and receive automated notifications of their excess leave balances. This allows NSW Police to better manage annual leave
• that they report against the categories of 'sworn' and 'unsworn', rather than frontline and administrative staff. This terminology is consistent with how NSW Police reports as an organisation to avoid confusion between Police and Administrative Officers.

The implications of excessive leave balances include:

• possible work health and safety issues
• disruptions to service delivery when key employees take lengthy periods of leave
• employee fraud remaining undetected
• an increasing financial liability over time as salaries increase.

Front line staff in NSW Police and the Department had over 70.0 per cent of the cluster's leave balances which were above the State's target at 30 June 2017. Agencies advise the target is more difficult to achieve for front line staff, because they are entitled to more than 20 days of annual leave per annum. The higher accrual rate recognises that front line staff need more leave than administrative staff, due to the nature of their work. The Department and NSW Police are the highest employers of frontline staff in the cluster.

The Corrective Services NSW division of the Department continues to be impacted by increasing inmate numbers in the NSW prison system. This reduces the opportunity for frontline staff to take annual leave.

Treasury Circular TC16/03 ‘Managing Accrued Recreation Leave Balances’ requires agencies to manage accrued employee recreation leave balances to a maximum of 30 days or less on an ongoing basis, within the constraints of relevant industrial instruments and legislation.

Sick Leave

A 2012 report by the NSW Auditor-General reported that the New South Wales public sector takes more sick leave than any other jurisdiction in Australia. This year agencies in the cluster recorded increases in leave taken.

Sick leave taken by Justice cluster employees increased by 2.9 per cent

Justice cluster data shows that sick leave across the cluster increased by two hours per full time equivalent employee (two per cent) in 2016–17. The total cost of sick leave was estimated at $150.2 million in 2016–17 ($146.2 million in 2015–16).

Effectively managing sick leave is challenging for many agencies. Each FTE employee in the cluster took an average of 72.3 hours sick leave in 2016–17 (70.3 hours in 2015–16). This exceeds the 2015–16 public sector average of 67.1 hours per FTE employee referred to in the Public Service Commission's 'Workforce Profile Report 2016'.
 

Sick leave taken by NSW Police administrative staff increased by 7.9 per cent

NSW Police data shows that sick leave taken by their administrative employees increased 5.2 hours (7.9 per cent) per FTE employee from the prior year, the first increase since 2014.

Administrative employees' sick leave decreased in the Department by 8.6 hours (13.7 per cent) from the prior year.

The table below shows sick leave taken by administrative staff in the Department and NSW Police, which are the biggest employer agencies in the Justice cluster. 

Sick leave taken by emergency services employees increased by 2.6 per cent

Emergency services employees took on average 3.6 hours more sick leave in 2016–17 than in the previous year. The average sick leave taken per FTE employee was 90.4 hours in 2016–17 (86.8 hours in 2015–16). It is not unexpected for agencies with front line staff to have a higher level of sick leave than the public-sector average.

In 2016–17, average sick leave rose by 5.2 per cent at Fire and Rescue NSW, 2.4 per cent at the Office of the NSW State Emergency Service, but fell by 3.1 per cent at the Office of the NSW Rural Fire Service.

TC14/13 ‘Managing Sick Leave Policy’ allows agencies to adopt a range of strategies that suit the workplace to help address genuine illness and sick leave abuse by employees. The strategies include:

• using information management systems to monitor, measure and analyse sick leave data/information
• identifying options, strategies and support available to manage absences when they occur
• developing return to work plans and conducting effective return to work interviews.

Sick leave taken by frontline staff in the Department and NSW Police decreased

Data from the Department and NSW Police shows that sick leave taken by frontline staff at the Department decreased by 11.4 hours (11.4 per cent) and at NSW Police by 1 hour (1.5 per cent) from the prior year.

NSW Police advise that their Workforce Program Improvement Initiatives have helped reduce the extent of sick leave taken by frontline staff.

Sick leave taken by the Department’s frontline staff, mainly custodial officers within the Corrective Services NSW and Juvenile Justice divisions, was 30.8 per cent more than the 2015–16 public sector average of 67.1 hours. Given the nature of the custodial officer role, a higher rate of sick leave than the public-sector average is not unexpected.

Employee injury rates in the Corrective Services NSW division, which includes prison officers, is the highest in the Department. The division's claims represent 67.6 per cent of all Department claims in 2016–17 (68.6 per cent in 2015–16). The most common cause of claims for prison officers is injuries sustained while forcefully dealing with and restraining inmates, during physical training exercises or while responding to incidents.

The Department is implementing the following initiatives to reduce workplace injuries to prison officers: 

• rolling out a Workplace Health and Safety Management System modular training package across Corrective Services Industries
• conducting information sessions covering alcohol, tobacco and other drugs, emotional survival, metal health, resilience, 'get health' support and critical incident support
• continuing its Peer Support Program
• health and safety representative training.

Parliamentary inquiry into bullying, harassment and discrimination

A parliamentary committee is holding an inquiry into bullying, harassment and discrimination within emergency services agencies, including Fire and Rescue NSW, Office of the NSW Rural Fire Service, Office of the NSW State Emergency Service and NSW Police. Hearings were held between September and November 2017.

The committee will inquire into and report on whether emergency services agencies have:

• effective protocols and procedures to manage and resolve complaints of bullying, harassment and discrimination
• support structures to assist victims of workplace bullying, harassment and / or discrimination
• effective support services for workers and volunteers to assist with mental health issues resulting from workplace trauma.

For details, refer to the Parliament of New South Wales website.

NSW Police Force

Lost hours due to workplace injuries in NSW Police continue to increase

NSW Police data shows that frontline staff recorded average workplace injury leave of 65.6 hours per FTE employee in 2016–17 (57.9 hours in 2015–16), a 13.1 hour (25.0 per cent) increase over the last four years.

NSW Police lost 118.7 hours per FTE employee in 2016–17 (112.9 hours in 2015–16) for sick leave and workplace injury leave across frontline and administrative staff.

Workplace injury leave includes workers’ compensation leave and any other leave (other than sick leave) for workplace injuries. 

The rate of repeat domestic violence assaults in 2016–17 also decreased slightly according to NSW Police, who refer to a 0.2 percentage point fall.

In August 2016, the NSW Government launched the ‘NSW Domestic and Family Violence Blueprint for Reform 2016–2021: Safer Lives for Women, Men and Children’. This is a five year plan to reform the domestic violence system in New South Wales, and includes directions and actions to: 

• prevent domestic and family violence
• intervene early in vulnerable communities
• support victims
• hold perpetrators accountable
• deliver quality systems
• improve the system.

Further information can be found at: http://domesticviolence.nsw.gov.au/publications/blueprint.

The 2016–17 State Budget allocates $44.0 million over the next four years to help meet the Premier's target. Measures include GPS tracking of high risk offenders, behavioural change programs for higher-risk perpetrators and establishment of NSW Police Domestic Violence High Risk Offender Teams across the State.

Local Government Area (LGA) violent crimes trends are better than the State Priority target

BOCSAR crime statistics show that LGAs with stable or falling rates of violent crime increased to 98.6 per cent at 30 June 2017 (94.5 per cent at 30 June 2016). This achieves the target in the State Priority Plan of 98 per cent of LGAs with stable or falling rates of violent crime by 2019.

Some initiatives implemented by NSW Police to reduce violent crime rates include:

• submitting a State Priority Implementation Plan: Reducing Violent Crime to the Minister for Police and Justice in August 2016, which contains actions and initiatives to meet the State priority  
• incorporating objectives in NSW Police's 2016–2018 Corporate Plan to work collaboratively with Councils, partner agencies and communities to strengthen crime prevention.

Quarterly BOCSAR crime statistics are used to measure progress against the State priority. These show violent crime trends by LGA in the final month of a 24 month period.

The rate of adult reoffending continues to increase

Department data shows that contrary to the State priority of reducing adult reoffending by five per cent by 2019, the rate has continued to increase.

The rate of prisoner reconviction within 12 months following release from custody rose to 39.5 per cent in the year ended 31 December 2015, an increase of 5.3 percentage points over the five years since 2011.

The rate of offender reconviction within 12 months following a non-custodial penalty similarly rose, increasing to 18.9 per cent in the year ended 31 December 2015. The rate has increased 4.2 percentage points over the five years since 2011.

The above performance measures are the only measures agreed with the NSW Government to track progress against this State priority.

Further information on reoffending is provided by Productivity Commission data, which shows that the rate of offenders returning to prison or Corrective Services NSW within two years also continues to rise. The most recent 2015–16 Productivity Commission data shows that in New South Wales over half of the prisoners released in 2013–14 had returned to prison or Corrective Services NSW by 2015–16. The 2015–16 rates in New South Wales increased by 2.6 per cent and 2.2 per cent respectively compared to 2014–15 data, and remain above the national average.

The Report on Government Services 2017 notes that 'Repeat offender data are difficult to interpret. A low proportion of repeat offenders may indicate an effective justice system discouraging repeat offending. However, a high proportion of repeat offenders may indicate more effective policing.'

The Department further advised that a broad range of factors influence reoffending, including those beyond the control of the Department. In particular policing activity, including the targeting of offenders with existing convictions, may result in an increased number of arrests and reconvictions, and an increase in the reoffending rate.

When a prisoner enters custody in New South Wales, there is an expectation that they will be offered therapeutic programs to reduce the risk of reoffending. The following table shows that in 2016–17, 75 per cent of prisoners with identified program needs reached the earliest date they could be released to parole without completing recommended programs, which is similar to that reported for 2015–16.

Some prisoners continue to complete programs after they are released. The Department advises that after including prisoners who complete their programs following release into the community, the program completion rate was 33.5 per cent in 2016–17 (31.9 per cent in 2015–16).

The Auditor-General released a report on ‘Therapeutic Programs in Prisons’ in May 2017, which found that: 

Corrective Services NSW does not ensure that eligible prisoners receive timely programs to reduce the risk they will reoffend on release. Most prisoners who need programs do not receive one before their earliest release date. These prisoners can be released with no intervention or held in prison longer waiting a program. Additionally, programs have not been systematically evaluated to confirm they are helping to reduce reoffending in NSW.

The Department advises that they have a program of outcome evaluations underway for reducing reoffending measures, and that robust evidence of the effectiveness of those programs will not be available until the programs have been in place for a suitable amount of time and can be subject to evaluation.
 
In August 2016, the Minister for Corrections announced a $237 million program to reduce reoffending. The Department’s initiatives to reduce reoffending in 2016–17 included:

• building ten High Intensity Program Units in seven correctional centres for offenders serving sentences of six months or less at a cost of $6.5 million. The Units aim to stop the ‘revolving door’ of short-sentenced offenders by delivering early intensive rehabilitation programs
• spending $1.2 million on programs to expand support services in the community
• providing enhanced supervision to higher risk offenders released to the community through the one to one Practice Guide for Intervention at a cost of $2.2 million. The Intervention aims to address attitudes and behaviours supporting criminal thinking
• establishing a Program Management Office to oversight reoffending initiatives at a cost of $811,000.

The impact of the new initiatives on reoffending rates will not be known for several years.

New South Wales' road fatalities per 100,000 people slightly exceeded the 2016–17 target

Statistics from the NSW Centre for Road Safety shows that New South Wales' road fatalities decreased from 5.1 deaths to 4.6 deaths per 100,000 people in 2016–17. This is slightly above the State priority target to reduce road fatalities by at least 30 per cent from 2011 levels by 2021.

NSW Police is working collaboratively with partner agencies to enable the free flow of traffic and promote road safety through education, innovation and targeted enforcement.

Other measures of performance

Department of Justice

Most crime categories have trended down since 2012

Australian Bureau of Statistics data shows that the downward trend in most crimes in New South Wales since 2012 is better than the national trend, except for murder which remained at 2011–12 levels compared to a 6.6 per cent decrease nationally. Crime statistics from the Bureau of Crime Statistics and Research demonstrate that a significant number of murders are domestic violence related. In 2016–17 there were 29 domestic violence related murders (25 in 2015–16).

Rates of sexual assault in New South Wales increased in each of the last five years. It is the only crime to increase overall since 2012. The Auditor-General’s May 2017 performance audit report on ‘Therapeutic Programs in Prisons’ noted that the number of intensive programs delivered for sex offenders has decreased since 2012, which is contrary to the increasing trend in convictions. This implies that the mix of programs available in Corrective Services NSW may be out of step with the needs of prisoners.

The Department advises that they apply interventions that are matched to the criminogenic needs of offenders, rather than crime type.

New South Wales has outperformed the national average in addressing the State’s law and order priorities. Between 2012 and 2016, New South Wales recorded falls in eight crime categories compared to the national average, where falls were recorded in six categories. Between 2015 and 2016 New South Wales recorded falls in five crime categories, compared to only one nationally.

NSW prisons remained overcrowded in 2016–17, but the inmate growth rate slowed

Department data showed that the NSW prison system continues to operate at close to its operational capacity. The inmate population reached 13,253, compared to an operational capacity of 13,402 beds on 27 August 2017. This equates to an operational vacancy rate of 1.1 per cent.

The Commissioner of Corrective Services NSW has previously referred to a 5 per cent operational capacity buffer as target spare capacity to enable the efficient and effective management of the inmate population. The operational vacancy rate of 1.1 per cent on 27 August 2017 is significantly less than the 5 per cent target.

Department data shows the average daily number of inmates increased by 626 to 12,931 in 2016–17 (12,305 in 2015–16) while average daily prison operational capacity increased by 816 beds to 14,106. However, the system's capacity was only designed to cater for 10,518 (10,244) inmates. This implies an occupancy rate of 123 per cent of the prison system’s design capacity.

The Productivity Commission notes that prisons need spare capacity to manage the prison population. Accordingly, occupancy rates close to but not exceeding 100 per cent of design capacity are desirable. However, according to the Productivity Commission, the average daily design capacity occupancy rate for the NSW prison system in 2015–16 was 120.1 per cent (112 per cent), well above the national rate of 111.4 per cent.

The graph below shows the design and operational capacity of all prisons compared to daily average inmate numbers in the NSW prison system.

While the daily average prison population continued to increase in 2016–17, the rate of increase decreased from 11.8 per cent in 2015–16 to 5.1 per cent in 2016–17. This lower rate was fortunate, as the design capacity of NSW prisons only increased by 2.7 per cent, and the operational capacity by 6.1 per cent over the same period.

Design capacity is the number of beds prisons were originally built to hold. Operating capacity is the number that can be accommodated while maintaining program and service levels. A previous Inspector of Custodial Services (the Inspector) noted that the ‘elasticity of operational capacity allows overcrowding to be made opaque to inquiry’, when discussing the differences between operational and design capacity. Operational bed capacity can be changed by, for example, installing more beds in existing cells without increasing resources and services. The Inspector acknowledged that design capacity also has definitional problems.

The Department provided the following comments on design capacity:

• Corrective Services NSW has a number of prisons that were built in the 19th and early 20th century, when inmate accommodation was almost exclusively single occupancy although many of these cells could comfortably accommodate two people
• prison accommodation and management has changed significantly since this time and dual occupancy accommodation is now a commonly accepted practice. For this reason, design capacity does not provide a meaningful measure of prison overcrowding. A more meaningful measure of modern capacity to house inmates is operational capacity
• design capacity is currently reported in the Report on Government Services, produced by the Productivity Commission. However, South Australia and Victoria do not report on this indicator
• the Corrective Services Administrators Council (CSAC) and the Productivity Commission Secretariat requires the National Statistics Working Group to review the current performance indicator framework to ensure all indicators are meaningful measures of the core objectives of Corrective Services.

Inmate access to some resources and services has deteriorated

A number of unaudited indicators suggest that inmate access to some resources and services has not kept pace with increases in prison populations. For example, since 2012–13 the ratio of nurses to inmates has decreased from 3.2 to 2.6 nurses per 100 inmates, and the average time inmates spend out-of-cell each day has fallen from 11 to 8 hours. However, not all indicators have deteriorated. The waitlist time for inmates to see a doctor decreased from 28 to 24 days, and the percentage of employed eligible inmates increased from 72.4 to 78.4 per cent over the same period.

The most current Productivity Commission information on out-of-cell hours is 2015–16 data in the Report on Government Services 2017. This report shows New South Wales prisoners' average time out-of-cell of 7.8 hours across all prisons in 2015–16, was the lowest of any Australian jurisdiction. The biggest difference was in secure prisoners in New South Wales, who spent on average only 6.5 hours out-of-cells, 29.3 per cent less time than the national average of 9.2 hours. Prisoners in open custody spent 10.1 hours per day out-off-cells, which is 19.8 per cent less than the national average of 12.6 hours.

The Department advises that average out-of-cell hours marginally increased in 2016–17 to 8.0 hours (7.8 hours in 2015–16) across all prisons, with secure prisoners spending on average 6.8 hours per day out-of-cells (6.5), and prisoners in open custody 10.1 hours (10.1 hours). The Department also advises that Corrective Services NSW is undertaking benchmarking, which includes targets to support greater time out-of-cells.

The Productivity Commission defines ‘time out-of-cells’ as the average number of hours in a 24 hour period that prisoners are not confined to their cells or units, during which prisoners can participate in activities such as work, education and training, wellbeing, recreation and treatment programs. A relatively high or increasing average time out-of-cells per day is desirable.

While out-of-cell hours marginally increased in 2016–17, the ratio of employed to eligible inmates marginally decreased by 2.0 per cent to 78.4 per cent (80.4 per cent to in 2015–16). The Department attributes the fall to the 5.1 per cent increase in the inmate population, which has exceeded the increase in work opportunities the Department has been able to offer. Internal work opportunities within the Department include working in the Prefabricated Modular Cell manufacturing program, and making and installing beds and security fencing in correctional centres.

Nurse to inmate ratios, nurse waiting times, average out-of-cell hours and employed inmate rates are indicators of the Department's performance in providing safe, secure and humane custodial environments, and programs that reduce the risk of re-offending and maximise the chances of successful reintegration into the community. A challenge has been maintaining resources and services at appropriate levels, despite the increases in the inmate population.

The table below shows changes in these unaudited indicators over the last five years.

The Inspector of Custodial Services' April 2015 report 'Full House: the growth of the inmate population in NSW' found prisoner access to some resources and services was not commensurate with the increase in the inmate population. The Inspector concluded this has the potential to compromise quality of life for inmates and undermine rehabilitation outcomes.

If the inmate growth rate in 2016–17 continues, the NSW prison system is expected to remain near capacity until 2019–2

Department data on capital expenditure suggests that the NSW prison system will remain at or near capacity until planned increases in beds become available in 2019–20, if the inmate population continues to increase at the 2016–17 rate of 5.1 per cent per annum.

The Department is expanding the capacity of the NSW prison system through the $3.6 billion Prison Bed Capacity Program. The Program increased NSW prisons' design capacity by 277 beds or 2.7 per cent and operational capacity by 585 beds or 4.6 per cent over the year to 30 June 2017.

Currently, approved Prison Bed Capacity Program projects are expected to add 3,560 beds over the next three years. The new Grafton Correctional Centre, which is being delivered through a Public Private Partnership, is expected to provide a further 1,700 beds in 2019–20. Based on the expected delivery timetable of the new beds, and if the 2016–17 inmate growth rate of 5.1 per cent continued, the NSW prison system is expected to operate at over 120 per cent of design capacity over the next 2 years. Additional capacity through the new Grafton prison and other projects is then expected to reduce the prison population to 96 per cent of design capacity in 2019–20.

Latest information from the Department indicates that the rate of growth has continued to slow, falling to 3.0 per cent in the 12 months to September 2017. It is too early to determine whether the decreasing trend will continue.

As noted above, the Department believes operational capacity is a more meaningful measure of prison overcrowding than design capacity. If operational capacity was used to assess overcrowding, the ratio of forecast average daily number of inmates to expected operational capacity would be close to but less than 100 per cent.

The Department has strategies to manage fluctuations in inmate numbers

The Department advises that in addition to the above capacity increases, the Prison Bed Capacity Program is expected to provide 1,600 Immediate Future Needs beds for a cost of $68 million by 2020–21. Immediate Future Needs beds are temporary short-term beds that double or triple the beds in existing inmate cells. These beds will be decommissioned once sufficient fit-for-purpose beds are available.

The NSW Public Health Regulation 2012 (the Regulation) stipulated minimum space requirements for shared accommodation and limited the doubling or tripling of inmates in cells reducing short-term capacity. However, the Regulation was amended on 1 July 2016 to exempt correctional centres from minimum floor area requirements for rooms and cubicles in premises to be used for sleeping accommodation.

New processes to forward plan criminal justice system requirements have been introduced

Last year’s Auditor-General’s Report to Parliament recommended that decisions about Justice cluster resources take into account the activities of the inter-related components of the criminal justice system, such as the impact NSW Police activity has on the courts and prison capacity.

The Department advises a number of actions have been introduced to address this issue, including:

• a system demand and flow dashboard has been built to track weekly movements of people and activity across the justice system, and to provide alerts to changes in trends and shifts in resourcing. The Department is still refining the system flow dashboard
• a criminal justice impact assessment of all new policy proposals, which requires a full assessment of the up and downstream effects of any proposal
• three new simulation models to allow scenarios to be planned and impacts assessed. The models are used for prison population, district court demand and delay, and overall system throughput
• a system wide cost modelling program has commenced, to better understand functional costs, variable costs and establish costing models for major functions so that future costs and resource demands can be more accurately predicted.

The criminal justice system is complex. Decisions about deploying resources in the Justice cluster should take into account the impacts activities in individual components have on the wider criminal justice system. Making decisions in isolation can adversely impact the ability of inter-related functions to meet their objectives and operate effectively. For instance, increases in the activity of NSW Police significantly impacts the resource needs of downstream activities, such as the courts and prison system. If the courts and prison system are not sufficiently resourced to process additional matters brought by NSW Police, the backlog in cases grows and the prison system's capacity to manage extra inmates and over-crowding further deteriorates.

For optimal forward planning:

• the complex inter-relationships between the different functions of the criminal justice system need to be fully understood
• decisions made by one function should be actively considered by all other functions that may be impacted
• cluster level resourcing decisions should consider and forecast each component's needs to ensure they can meet their objectives and operate effectively.

Funding of downstream agencies, and their ability to respond to fluctuations in demand

O ne of the complexities for downstream activities in the Justice cluster, such as the courts and prison system, is that funding is provided in advance through the annual appropriation process, but expenditure is driven by the level of activity.

As noted above, the actual costs incurred by the downstream activities are heavily influenced by upstream factors such as policing activity, sentencing by Judicial Officers, and NSW Government Policy decisions.

Where funding does not meet the demands of the level of activity, there is added pressure on downstream agencies, which tend to reduce non-core services to meet budget constraints.

The proportion of prisoners on remand for more than 30 days marginally decreased

Department data shows that the percentage of inmates on remand for 30 days or more decreased in 2016–17 by 2.0 percentage points compared to 2015–16. The number of remand receptions has continued to increase, reaching 14,645 in 2016–17. Of this number, 8,089 or 55.2 per cent were held on remand for 30 days or more.

As most intensive custodial programs target only sentenced inmates, time on remand can negatively impact efforts to reduce rates of re offending. Inmates who spend long periods on remand have fewer opportunities to participate in rehabilitation programs, especially when sentences are backdated.

Corrective Services NSW advise that benchmarking at individual correctional centres will be fully implemented by March 2019

Corrective Services NSW has developed a performance monitoring and reporting framework at the individual correctional centre level, which it expects to fully implement by March 2019. The Department advises the framework will compare publicly and privately managed correctional centres in NSW on a range of qualitative and quantitative performance measures.

The Auditor-General released a report 'Performance frameworks in custodial centre operations' in March 2016, which concluded that the effectiveness of Corrective Services NSW’s performance framework is limited because organisational KPIs do not cascade to the public correctional centre level.

The backlog of cases in the NSW District Court remains high

Department data shows that the pending case load in the District Court increased by 5.2 per cent from 2,005 cases in June 2016 to 2,110 cases in June 2017. However, the age of the cases decreased. The Department advises the number of cases older than 12 months decreased by 10.7 per cent from 507 cases at 30 June 2016 to 453 cases at 30 June 2017. The number of cases older than 24 months decreased from 124 to 116 over the same period.

The graph below shows the number of pending cases in the District court over the last six and a half years. This is the difference between registered trials and finalised trial cases each year.

According to national benchmarks, no more than 10 per cent of pending cases should be more than 12 months old. Twenty one per cent, 453 of the 2,110 cases pending in the NSW District Court at 30 June 2017 are older than 12 months. This is more than two times the national benchmark, but is 3.8 per cent less than the same time last year.

The Department attributes the 5.2 per cent increase in pending cases in 2016–17 to: 

• an increase in trial registrations, which outpaced finalisations by 109 matters. This is the highest the gap has been since January 2016
• an increase in sentencing matters. Five additional sentence weeks were allocated in the first term of 2017 to deal with the sentencing backlog
• the impact of Long and Complex trials on the finalisation rate. Currently there are 70 trials of 12 weeks or longer on the current Long and Complex trial list. These complex matters are generally sexual assault, child sexual assault or multi accused drug trials.

The Department is working with the Chief Judge of the District Court and a working group on measures to address issues causing the current backlog. An additional 31 sitting weeks have been scheduled for the 2017–18 financial year and additional Judicial Officers are expected to provide a further estimated 200 sitting weeks. Other initiatives include:

• additional call overs planned for regional centres and for Sydney over 2017–18
• extending pre-trial conferencing to trials lasting longer than 15 days, to achieve earlier resolutions and distil the substantive issues in contention
• additional Public Defender resources in collaboration with the Office of the Director of Public Prosecutions (ODPP), Legal Aid Commission of NSW and the Department of Justice to address the growth in Long and Complex trials with dedicated resources to be located in Sydney
• early resolution between ODPP and Legal Aid Commission of NSW to reduce committals to the District Court. It is expected that once implemented, Early Appropriate Guilty Pleas shall replace the application of early resolution activities.

In June 2016 the NSW Government announced it will spend $39 million in 2016–17 and 2017–18 to address the District Court back log. This is in addition to $20 million in funding provided in 2015–16.

According to the Productivity Commission's Report on Government Services 2017, the net recurrent expenditure per finalisation, criminal and civil, in New South Wales District / county courts was $4,717 in 2015–16.

The Department advises that no further funding has as yet been allocated to the District Court Backlog Program. Current funding expires in June 2018.

Inmates awaiting trial in the District Court cost an estimated $75.4 million in 2016–17

The Department reports that at 30 June 2017, 1,129 inmates (1,164 inmates at 30 June 2016) were on remand awaiting trial in the District Court. Longer remand periods contribute to prison overcrowding and are costly. Based on the latest net recurrent expenditure for secure inmates from the Productivity Commission of $183 per person per day, this costs the State an estimated $206,607 per day or $75.4 million in 2016–17 ($80.8 million in 2015–16).

According to the Department, court delays have other unintended consequences, such as unnecessary hardship for victims and the accused. Delays also undermine confidence in the justice system, increase case costs and increase the risk witnesses forget evidence or cannot be contacted.

The net operating cost per adult inmate increased by 3.5 per cent in 2016–17

Department data shows that the annual net operating cost per adult inmate increased by $2,142 or 3.5 per cent to $63,115 ($60,973) between 2015–16 and 2016–17. This equates to an annual net operating cost of $816 million in 2016–17.

The Department attributes the increase in costs in 2016–17 to additional staff recruited as part of Corrective Service NSW's strategies to reduce reoffending.

As noted above, the Minister for Corrections announced a $237 million program to reduce reoffending in August 2016.

The annual cost of a juvenile detainee decreased in the three years to 2016–17

Department data shows that in the three years between 2014–15 and 2016–17 the average annual cost per juvenile detainee decreased by $19,604 or 5.5 per cent, and the design capacity of juvenile centres decreased on average by 55 beds or 13.3 per cent. The average number of juvenile detainees as a percentage of design capacity increased from 69.4 per cent to 76.5 per cent over the same three year period.

The decrease in the average annual cost per juvenile is reflected in reduced operating expenses within the Juvenile Justice division of the Department, which fell by $12.0 million or 6.9 per cent over the three year's between 2014–15 and 2016–17.

Last year's Auditor-General's Report to Parliament included a repeat recommended for the Department to assess whether the cost of supervising and caring for juvenile detainees is reasonable given the downward trend in the number of detainees.

The Department advise an increasing emphasis on therapeutic practices is expected to sustain the reduced level of detainees. They also advise that the division is continuing to map and analyse its operating costs in the context of declined custodial numbers, with the aim of achieving cost effective service delivery into the future.

Each juvenile detainee cost $272,725 more than an adult inmate in 2016–17

The data above shows that the average annual cost of a juvenile detainee is significantly higher than that of an adult. This is attributed to:

• higher levels of supervision to meet duty of care responsibilities and child protection requirements
• more staff for out of cell activities to re engage juveniles in education and support their rehabilitation and re entry to the community
• the cost of providing specialist programs to address offending behaviour through assessment, case management consultation, individual and group counselling and psychological services
• juvenile detainee centres housing less inmates than adult centres. A Youth Justice Centre houses 25 to 90 juveniles while an adult centre houses between 600 to 800 inmates
• out of cell time for juveniles of 16 hours compared to eight hours for most adults
• more frequent night checks, juveniles every 20 minutes, adults every four hours.

Reassessed victims’ claims of $54.4 million have been awarded to July 2017

On 2 August 2015, the NSW Attorney General announced victims of crime, who transitioned between the Victims Compensation Scheme (VCS) and the Victims Support Scheme (VSS), could have their claims reassessed from 1 September 2015. Applicants had to apply to have claims reassessed before 31 August 2016. The Department received 10,039 applications for reassessment, of which it advises 5,848 have been determined and $54.4 million awarded as at 30 June 2017.

The VSS replaced the VCS from 3 June 2013. It provides a package of practical and financial support and smaller lump sum victim support payments to victims than the former VCS.

The NSW Police Force 

The NSW Police Force is operating at full strength

NSW Police Force data shows that its authorised strength increased 0.3 per cent in 2016–17 to 16,744 (16,692 in 2015–16). With 16,649 police officers at 30 June 2017, it is operating at 99.4 per cent (99.6 per cent) of its authorised strength.

NSW Police monitors police numbers, which fluctuate throughout the year due to natural attrition, attestations from the NSW Police Academy, separations, transfers and promotions.

The table below compares authorised and actual police officer numbers across the operational areas of NSW Police at 30 June 2017. The biggest deficits were in the Central Metropolitan, South West Metropolitan and North West Metropolitan areas.

The 'Other' region/branch in the table above primarily includes the Commissioner's office, field operations, State crime command, major events and incidents group, awards unit and operations response unit.

NSW crime investigation clearance rates are lower than the national average

Australian Bureau of Statistics data shows that the clearance rates of investigations finalised within 30 days continues to be lower than the national average across all crime categories in the year to 31 December 2016.

Police effectiveness in crime investigations is measured by the proportion of investigations finalised within 30 days of the offence becoming known.

NSW Trustee and Guardian

Client returns exceeded benchmark for eight of ten investment portfolios

NSW Trustee and Guardian data shows the managed funds that were exposed to domestic and international equities continued to perform strongly during 2016–17; this comprises 23 per cent (22 per cent at 30 June 2016) of the $2.9 billion of funds under management at 30 June 2017 ($2.8 billion). The majority of the remaining funds, approximately 71 per cent, are exposed to cash based returns, where performance has been impacted by low interest rates.

In 2016–17, one-year client returns for eight of the ten portfolios performed better than benchmark. The remaining two funds did not perform as well and returned lower than the benchmark.

The NSW Trustee and Guardian manages client funds through the following Common Funds: 

• the ‘NSW Trustee and Guardian Common Fund - Financial Management’ (the Financial Management Fund) holds the funds of clients whose financial affairs are directly managed by the NSW Trustee and Guardian or a private manager. This Fund comprises an Access Fund, which is an interest bearing working account for client transactions, and seven diversified investment funds. Custodial and investment management services are provided by the private sector
• the ‘NSW Trustee and Guardian Common Fund - Trustee’ (the Trustee Fund) operates two portfolios of investments for client funds received by the NSW Trustee and Guardian as executor, trustee or attorney. The primary portfolio invests in high quality cash deposits and short term money market securities. The growth portfolio aims for 70 per cent investment in the Indexed Australian Shares Sector Trust, and 30 per cent in the Indexed International Shares Sector Trust.

NSW Trustee and Guardian advises it invests client funds across a range of funds to spread risk and provide opportunities for short or long term investment returns and security. A fund performance report is provided for each investment class. Separate funds are maintained for Financial Management and Trustee clients because they are subject to different taxation requirements.

NSW Trustee and Guardian partially addressed recommendations to identify and operationalise performance indicators

Last year’s Auditor-General’s Report to Parliament recommended that NSW Trustee and Guardian identify and use meaningful performance indicators to measure and report the cost and quality of the services provided to the community, including measures such as the cost per trust managed, the time taken to identify and secure client assets, and customer satisfaction and complaints.

NSW Trustee and Guardian advise it has identified a number of new monthly performance indicators and incorporated them into relevant employee performance plans. The indicators include client focussed indicators such as call service waiting times, complaint volumes, client satisfaction scores, and operational indicators such as completing tasks by a specified target date. However, costing based indicators, such as costs per trust managed, are yet to be developed. NSW Trustee and Guardian advise that:

• their initial focus is on consistently meeting service indicators, following the recently implemented operational changes (refer to the Financial Reporting and Controls chapter)
• cost and efficiency measures will be identified and introduced once the new client information management system is delivered in 2018.

Meaningful performance indicators and targets help drive efficient and effective operation, and help hold management and those charged with governance accountable for the organisation's performance.

The NSW Trustee and Guardian believes benchmarking against similar entities in other states is not meaningful as each state charges clients differently and operates under different legislation, service standards and types.

The Office of the NSW Rural Fire Service is the lead agency for coordinated bush fire-fighting. It is also responsible for fires and related emergency incidents within Rural Fire Districts.

The Service carries out and/or coordinates hazard reduction activities to minimise the threat of damage to life, property, infrastructure and environmental, economic, cultural, agricultural and community assets by reducing or removing bush fire fuel. Hazard reduction does not completely prevent bush fires, but helps the Service and other fire fighting agencies with containment strategies and property protection. Burning is the most common form of hazard reduction in New South Wales.

The Service monitors the level of hazard reduction activities through two measures: the annual average area treated by hazard reduction (in hectares), and the number of properties protected by hazard reduction works across all bush fire prone land. 

Incidents

Total demand for emergency services fell 1.8 per cent to 179,537 incidents in 2016–17 (182,896 in 2015–16). This is largely attributed to a 12.8 per cent decrease in storm, flood, other natural disasters and for assistance to other agencies.
 
Emergency service agencies have responded to the incidents shown in the graph below over the last three years.

Fire engine incident response times improved slightly in 2016–17

Fire and Rescue NSW data shows that response times for the first fire engines to arrive at an incident improved slightly in 2016–17. Fire and Rescue NSW introduced Mobile Data Terminals (MDTs) in fire appliances which more accurately record response times. The project commenced in March 2015 and by 9 September 2016 there was at least one MDT in every fire station enabling a standard operating model across the state.

Response time is the interval between the Fire and Rescue NSW dispatch centre receiving a call and the firefighting vehicle arriving at the scene.

The table below shows response times for the first fire engines to arrive at an incident over the last five years.

Office of the NSW State Emergency Service incident response times improved in 2016–17

Office of the NSW State Emergency Service data shows that response times for road crash rescues, vertical rescues and community first responder incidents improved in 2016–17. However the slowest response times declined from 2015–16. The Service advises that the decline in slowest response times was due to the distances required to be travelled to attend to the incidents which occurred in the more isolated areas of NSW.

Fire containment continues to improve

Office of the NSW Rural Fire Service data shows that the percentage of bushfires contained to 10 hectares or less increased to 95 per cent in 2016–17, 5.5 percentage points better than the five year average and 11.7 percentage points better than in 2012–13. The Service's data records a year on year improvement over the last five years.

In any one year, the size and distribution of bush fires varies depending on the coincidence of extreme bush fire weather conditions and ignitions, and the capacity of response agencies to quickly detect and safely contain such ignitions.

The proportion of bush fires contained to small fires by preventing them from becoming potentially damaging fires indicates the Service's detection and suppression capabilities are effective.

The total number of emergency services volunteers has decreased slightly

Data from NSW emergency services agencies shows that the number of volunteers has decreased over the last three years. NSW emergency service agencies use a range of models to mobilise the people they need to achieve their objectives, as shown below.

Volunteers are a key resource in providing emergency services. Volunteers are involved in directly dealing with the emergency through roles such as firefighting, rescue or storm recovery, or through important support roles like catering, communications and transport.

Natural disaster expenditure decreased due to funding changes

Nineteen declared disasters occurred in 2016–17 compared to seven in the prior year. The increase was mainly due to 13 bushfire events this year compared to one in 2015–16. While the number of declared disasters increased, natural disaster expenditure fell during the year. The reduced expenditure resulted from $26 million in standing charges for aircraft contracts with the Office of the NSW Rural Fire Service no longer being classified as natural disaster expenditure following a change in government funding arrangements.

Natural disasters are declared events such as bushfires, floods or storms that cause significant damage or loss of life. They are declared when damage to public assets and associated recovery costs exceed $240,000. Declaration of natural disasters allows emergency service agencies to apply to recover costs associated with the disaster from the Department of Justice, which administers the NSW Disaster Assistance Arrangements. The State can recover some of these costs from the Australian Government if the criteria in the Natural Disaster Relief and Recovery Arrangements Determination are met.

Over the last five years, emergency service agencies have spent $423 million on natural disasters and recouped $335 million from the NSW and Australian Governments.

During 2016–17, LGAs were affected by natural disasters 112 times. Over the last two years, LGAs were mostly affected by flood and storm related disasters. This is because river systems flow through many LGAs and the spread of floods is inherently difficult to contain. Bushfire related disasters tend to occur in rural areas, and have historically been contained to some degree by emergency service agencies’ fire containment strategies.