Agencies have managed the planning of outsourcing in a competent way. All agencies satisfactorily managed the contractual aspects of outsourcing. The Audit Office is of the opinion, however, that there is no objective evidence to demonstrate that agencies have achieved their goals in outsourcing IT. Most agencies had identified the current and expected costs and risks of outsourcing. Agencies were not able to demonstrate that the actual costs of outsourcing matched the expected costs.

Parliamentary reference - Report number #103 - released 23 October 2002

The Audit Office is of the opinion that, while agencies are aware of the need to manage risk, their risk management falls short of better practice. Many agencies do not consider their risk management to be adequate. The survey suggests that some agencies, mainly those in the Public Trading Enterprise Sector have approached risk management in a systematic way and in accordance with the principles of better practice standards. Others, mainly departments not subject to commercial imperatives, have yet to progress the management of risk beyond the traditional response of insuring against the more common types of risk. Thus there is a danger that with a number of agencies, risk may not be managed adequately, especially in the General Government Sector.

Parliamentary reference - Report number #98 - released 19 June 2002

State Transit has developed fleet management plans and maintenance standards that meet its regulatory and contractual obligations as a bus operator and are consistent with vehicle manufacturers’ standards and best practice. However, assumptions used in fleet management plans to forecast fleet growth may not result in the most efficient and effective outcome for State Transit. Forecasts fail to take account of opportunities to redesign or reduce services where they exceed contract requirements and are difficult to justify on a commercial basis. Of greater concern are the consequences arising from bus maintenance practices not meeting State Transit’s own standards.

Parliamentary reference - Report number #97 - released 29 May 2002

The Audit Office has undertaken an audit on Government Office Accommodation. The audit examined the cost effectiveness of long-term leasing versus ownership and the housing of agencies involved with the delivery of core government activities.  Core activities are those intrinsically linked to basic and ongoing functions of Government and Parliament.

It recommends that:

• the Government consider owning office accommodation, as opposed to leasing, for its long-term core needs, subject to a case by case analysis of the relevant financial and nonfinancial factors

• the Government undertake an analysis of the costs/savings from proposed asset sales of office accommodation in light of the demonstrated need for long-term office accommodation (for core needs) New, Expired and Expiring Leases

• given the findings of the own versus lease case studies presented in this report, it is recommended that the Government require agencies to undertake, in collaboration with the Department of Public Works and Services (DPWS) a cost/benefit analysis of available accommodation options prior to committing to any proposed major new leases

• the Government direct the DPWS, in collaboration with all agencies, to negotiate the renewal of all major expired/expiring leases (where continued occupancy is warranted) in order to reduce the financial risk of above-market rent increases and the risk of cancellation of leases (Major leases are defined, for the purposes of these recommendations, to be those over $500,000 rental per annum or a net lettable area over 1,000 square metres) Management of Property Information

•  in order to improve the integrity of the Government Office Accommodation Database, agencies be required to respond to the annual data request from DPWS by a predetermined date

• a senior officer within each agency be required to certify to the accuracy of information provided by an agency as input to the database maintained by DPWS

• DPWS verify, on a sample basis, information provided by agencies as input to the Government Office Accommodation Database Premier’s Memorandum No 97-2

• the compliance by agencies with Premier’s Memorandum No 97-2 Government Office Accommodation and Property Disposal be established by DPWS.

Parliamentary reference - Report number #45 - released 11 December 1997

Overall, The Audit Office found that the NSW public sector is not as prepared as it could be. Beginning in May 1996, the Department of Public Works and Services (DPWS) commenced a program to increase awareness of, report on and assist agencies with Year 2000 issues. However, significant areas of risk are still yet to be fully assessed, and action to resolve and implement appropriate solutions are lagging in areas of the public sector. A substantial acceleration and expansion of Year 2000 related activity is essential over the next twelve months to address this situation. In broad terms, the Year 2000 problem could affect both information technology (IT) and non IT. The latter includes systems dependent upon programmable logic controllers. These drive machines and equipment, including building services and medical equipment.

Parliamentary reference - Report number #43 - released 8 December 1997

Following a resolution of the Legislative Council, the Audit Office has undertaken a performance audit of the Eastern Distributor. For a number of reasons, The Audit Office is not in the position to determine “whether the proposed toll and concession period represents the best deal”. In part this is the result of time constraints which do not allow a careful analysis of many toll and concession options. Similarly, the audit does not answer “whether the current proposal represents the best environmental outcome”. But each of these issues (toll and concession and environmental consequences) is discussed in the audit report.

The Audit Office recommends that the Roads and Traffic Authority (RTA), for any further major project of this type, ensures that it establishes a process which allows all decision makers to have a thorough understanding of the reasonableness of the proponents’ offers and their implications for the State and for the public. The Audit Office also recommends that the RTA should at the outset consult with TCorp in respect of each major project put to tender.

Parliamentary reference - Report number #42 - released 31 July 1997

Volume One: Corporate Governance in Principle, considers relations between the Government and boards, and the extent to which boards add value. Various public sector governance models are examined, including those currently operating within NSW and those from five other jurisdictions.

It found the role of boards should be clearly defined, and specific criteria developed, so that boards can be clearly classified as either governing or advisory. Legislation should be reviewed targeting priority areas and policies developed to clarify and strengthen the respective role and functions for governing and advisory boards.

Governance models, legislation, policies and practices should be based on principles of simplicity, clarity and consistency in approach; provide boards with sufficient and clearly defined powers and authority for them to carry out their statutory role and there should be a corresponding appropriate level of public accountability.

Parliamentary reference - Report number #39 - released 17 June 1997

This Report, Volume Two: Corporate Governance in Practice reports upon how actual corporate governance practices by NSW public sector boards compare with “better practice”.

It found criteria and processes for appointing directors to boards are not always transparent. It also found a more systematic and rigorous approach to the range of corporate governance issues is required across the public sector if it is to approach "better practice", there is a lack of accountability for board decision making and board performance and where boards are to serve a governance role, then a basic framework needs to be created to ensure they can operate efficiently and effectively.

Parliamentary reference - Report number #39 - released 17 June 1997

A Supplement to Volume Two: Survey Findings has also been prepared, presenting The Audit Office’s survey findings in detail. This may serve as a useful benchmark for governance in the NSW public sector.

It found that, supporting/enabling legislation, governance structures and boards creation processes should facilitate better governance practice. It also found boards and management should understand their roles, responsibilities and duties and that these should be clearly articulated in legislation, board directors should possess appropriate qualifications and expertise to fulfil their responsibilities, boards need to ensure that adequate systems are in place to be able to oversight on the activity of the agency and boards must be accountable to those whose interests they represent.

Parliamentary reference - Report number #39 - released 17 June 1997