Hospitals, schools, public housing, roads, bridges, buses and trains are just some of the assets used by government in providing services to citizens.

The NSW Government’s asset base is impressive in size - with a value of around $167 billion and with government plans to spend around $8 billion acquiring or replacing assets in the current year. Another $2 billion is spent each year on maintenance.

Good asset management is very important to government; even a small efficiency gain in this area can provide significant returns. Good practice by those responsible for managing assets can improve reliability, extend asset life, save on maintenance costs and aid in identifying and disposing of unnecessary or non-performing assets.

Improving the NSW public sector’s approach to asset management has been on the reform agenda for at least a decade. Changes in practice have been accelerated more recently by integrating asset management policy with the budget process.

In this audit we examined NSW Treasury’s efforts to improve asset management practices in the public sector and the progress made by 3 agencies - the Department of Corrective Services, NSW Fire Brigades and the Powerhouse Museum - towards better managing their asset portfolios.

This report informs Parliament and the community on progress to date and what more needs to be done to ensure that agencies manage assets effectively and achieve best value.

Parliamentary reference - Report number #143 - released 12 October 2005

The annual Budget is one of the most important and visible statements about a government’s financial intentions.

Once a Budget is released, it is important to monitor variations from the projections it contains. This is done for two reasons -

• first, to ensure that individual agencies are properly managing their budget allocations and that any genuine emerging need for additional funding is met.
• second, to ensure that any changes to the State’s overall financial position are understood and corrective action is undertaken.

This audit dealt primarily with the second of these objectives.

Budget monitoring involves both agencies and Treasury working together to quickly identify factors that might impact the budget, to clearly understand the implications for their budget position and to take any remedial action needed.

Poor monitoring may reduce the confidence that stakeholders have in the government’s financial management. It may mean that government decisions made in- year or for the following budget (for example on tax measures or spending increases/savings) are based on an incorrect understanding of the State’s true financial position.

I hope that this Report provides some useful insights that will assist in better monitoring.

Parliamentary reference - Report number #141 - released 28 July 2005

Reliably supplying water to our State’s principal city, Sydney, is a major responsibility for the Government.

The community has been made keenly aware in recent years that inflows have been decreasing, and that Sydney has been using more water than is available. In April 2005 the water in Sydney’s storages dropped to 41.5 per cent of their capacity – the lowest level since the construction of Warragamba dam in 1960.

As Sydney continues to develop, it is expected that the demand for water will increase. The way that we use it will need to be sustainable, as it has a direct impact on our economy, our lifestyle and our environment.

In planning for the future the State’s water agencies face a range of uncertainties. But the task is vital.

This report informs Parliament and the community on the progress made - and what remains to be done - to ensure a reliable water supply for Sydney.

Parliamentary reference - Report number #135 - released 4 May 2005

Periodically we review the extent to which agencies have implemented the recommendations they accept from our earlier audits. This gives Parliament
and the public an update on the extent of progress made.

Intellectual property (IP) can have value to the agency concerned and may have the potential for wider commercial use. Poor management of IP can impose risks, including the risk of lost opportunities. Because it is not ‘tangible’ like a building or plant and equipment, the need for properly managing IP may be overlooked.

In this follow-up audit, we examine changes following our October 2001 report on how well public sector agencies were managing intellectual property.

Parliamentary reference - Report number #133 - released 30 March 2005

Periodically we review the extent to which agencies have implemented the recommendations they accept from our earlier audits. This gives Parliament and the public an update on the extent of progress made.

In this follow-up audit, we examine changes following our April 2002 report on how well the State Debt Recovery Office (under the Office of State Revenue) was collecting outstanding fines and penalties.

Parliamentary reference - Report number #132 - released 17 March 2005

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