Main navigation

Copyright notice

Parliamentary reference - Report number #373 - released 2 February 2023

20 December 2022

Published

Coordination of the response to COVID-19 (June to November 2021)

Premier and Cabinet

Community Services

Health

Justice

Whole of Government

Internal controls and governance

Risk

Service delivery

Shared services and collaboration

What the report is about

This audit assessed the effectiveness of NSW Government agencies’ coordination of the response to COVID-19, with a focus on the Delta variant outbreak in the Dubbo and Fairfield Local Government Areas (LGA) between June and November 2021. We audited five agencies - the Department of Premier and Cabinet, NSW Health, the NSW Police Force, Resilience NSW and the Department of Customer Service.

The audit also considered relevant planning and preparation activities that occurred prior to June 2021 to examine how emergency management and public health responses learned from previous events.

What we found

Prior to Delta, agencies developed capability to respond to COVID-19 related challenges.

However, lessons learned from prior reviews of emergency management arrangements, and from other jurisdictions, had not been implemented when Delta emerged in June 2021. As a result, agencies were not as fully prepared as they could have been to respond to the additional challenges presented by Delta.

Gaps in emergency management plans affected agencies' ability to support individuals, families and businesses impacted by restrictions to movement and gathering such as stay-at-home orders. In LGAs of concern, modest delays of a few days had a significant impact on people, especially those most vulnerable.

On 23 July 2021, the NSW Government established a cross-government coordinating approach, the Delta Microstrategy, which complemented existing emergency management arrangements, improved coordination between NSW Government agencies and led to more effective local responses.

Where possible, advice provided to government was supported by cross-government consultation, up-to-date evidence and insights. Public Health Orders were updated as the response to Delta intensified or to address unintended consequences of previous orders. The frequency of changes hampered agencies' ability to effectively communicate changes to frontline staff and the community in a rapidly evolving situation.

The NSW Government could provide greater transparency and accountability over decisions to apply Public Health Orders during a pandemic.

What we recommended

The audit made seven recommendations intended to improve transparency, accountability and preparedness for future emergency events.

This audit assessed the effectiveness of NSW Government agencies’ coordination (focused on the Department of Premier and Cabinet, NSW Health, the NSW Police Force, Resilience NSW and the Department of Customer Service) of the COVID-19 response in selected Local Government Areas (Fairfield City Council and Dubbo Regional Council) between June and November 2021.

As noted in this report, Resilience NSW was responsible for the coordination of welfare services as part of the emergency management arrangements. On 16 December 2022, the NSW Government abolished Resilience NSW.

During the audited period, Resilience NSW was tasked with supporting the needs of communities subject to stay-at-home orders or stricter restrictions and it provided secretariat support to the State Emergency Management Committee (SEMC). The SEMC was, and remains, responsible for the coordination and oversight of emergency management policy and preparedness.

Our work for this performance audit was completed on 15 November 2022, when we issued the final report to the five audited agencies. While the audit report does not make specific recommendations to Resilience NSW, it does include five recommendations to the State Emergency Management Committee. On 8 December 2022, the then Commissioner of Resilience NSW provided a response to the final report, which we include as it is the formal response from the audited entity at the time the audit was conducted.

The community of New South Wales has experienced significant emergency events during the past three years. COVID-19 first emerged in New South Wales after bushfire and flooding emergencies in 2019–20. The pandemic is now into its third year, and there have been further extreme weather and flooding events during 2021 and 2022.

Lessons taken from the experience of these events are important to informing future responses and reducing future risks to the community from emergencies.

This audit focuses on the NSW Government's response to the COVID-19 pandemic, and in particular, the Delta variant (Delta) that occurred between June and November 2021. The response to the Delta represents six months of heightened challenges for the NSW Government.

Government responses to emergencies are guided by legislation. The State Emergency and Rescue Management Act 1989 (SERM Act) establishes emergency management arrangements in New South Wales and covers:

coordination at state, regional and local levels through emergency management committees
emergency management plans, supporting plans and functional areas including the State Emergency Management Plan (EMPLAN)
operations centres and controllers at state, regional and local levels.

This audit focuses on the activities of five agencies during the audit period:

The NSW Police Force led the emergency management response and was responsible for coordinating agencies across government in providing the tactical and operational elements that supported and enhanced the health response to the pandemic. The NSW Police Force also led the compliance response which enforced Public Health Orders and included household checks on those required to isolate at home after testing positive to COVID-19. In some parts of NSW, they were supported by the Australian Defence Force in this role.
NSW Health was responsible for leading the health response which coordinated all parts of the health system, initially to prevent, and then to manage, the pandemic.
Resilience NSW coordinated welfare services as part of the emergency management arrangements and provided secretariat support to the State Emergency Management Committee (SEMC). The SEMC is responsible for the coordination and oversight of emergency management policy and preparedness. Resilience NSW was also tasked with supporting the needs of communities subject to stay-at-home orders or stricter restrictions.
The Department of Customer Service (DCS) was responsible for the statewide strategic communications response.
The Department of Premier and Cabinet (DPC) held a key role in providing policy and legal services, as well as supporting the coordination of activity across a range of functional areas and decision-making by our State’s leaders.

This audit assessed the effectiveness of NSW Government agencies’ coordination (focused on the Department of Premier and Cabinet, NSW Health, the NSW Police Force, Resilience NSW and the Department of Customer Service) of the COVID-19 response in selected Local Government Areas (LGA) (Fairfield City Council and Dubbo Regional Council) after June 2021.

The audit investigated whether:

government decisions to apply LGA-specific Public Health Orders were supported by effective crisis management governance and planning frameworks
agencies effectively coordinated in the communication (and enforcement) of Public Health Orders.

While focusing on the coordination of NSW Government agencies’ response to the Delta variant in June through to November 2021, the audit also considered relevant planning and preparation activities that occurred prior to June 2021 to examine how emergency management and public health responses learned from previous events.

This audit does not assess the effectiveness of other specific COVID-19 responses such as business support. It refers to the preparedness, planning and delivery of these activities in the context of supporting communities in selected LGAs. NSW Health's contribution to the Australian COVID-19 vaccine rollout was also subject to a separate audit titled 'New South Wales COVID-19 vaccine rollout' tabled in NSW Parliament on 7 December 2022.

This audit is part of a series of audits which have been completed, or are in progress, regarding the New South Wales COVID-19 emergency response. The Audit Office of New South Wales '2022–2025 Annual Work Program' details the ongoing focus our audits will have on providing assurance on the effectiveness of emergency responses.

In this document Aboriginal refers to the First Nations peoples of the land and waters now called Australia, and includes Aboriginal and Torres Strait Islander peoples.

Conclusion

Prior to June 2021, agencies worked effectively together to adapt and refine pre-existing emergency management arrangements to respond to COVID-19. However, lessons learned from prior reviews of emergency management arrangements, and from other jurisdictions, had not been implemented when Delta emerged in June 2021. As a result, agencies were not as fully prepared as they could have been to respond to the additional challenges presented by Delta.

In the period March 2020 to June 2021, the State's Emergency Management (EM) arrangements coordinated the New South Wales emergency response to COVID-19 with support from the Department of Premier and Cabinet (DPC) which led the cross-government COVID-19 Taskforce. NSW Government agencies enhanced the EM arrangements, which until then had typically been activated in response to natural disasters, to meet the specific circumstances of the pandemic.

However, the State Emergency Management Committee (SEMC), supported by Resilience NSW, did not address relevant recommendations arising from the 2020 Bushfires Inquiry before June 2021 and agencies did not always integrate lessons learned from other jurisdictions or scenario training exercises into emergency management plans or strategies before Delta. As a result, deficiencies in the EM arrangements, including representation of vulnerable communities on EM bodies, well-being support for multicultural communities in locked down environments and cross-agency information sharing, persisted when Delta emerged in June 2021.

It should be noted that for the purposes of this audit there is no benchmark, informed by precedent, that articulates what level of preparation would have been sufficient or proportionate. However, the steps required to address these gaps were reasonable and achievable, and the failure to do so meant that agencies were not as fully prepared as they could have been for the scale and escalation of Delta’s spread across the State.

The Delta Microstrategy complemented the EM arrangements to support greater coordination and agencies are working to improve their capability for future events

The Delta Microstrategy (the Microstrategy) led to innovations in information sharing and collaboration across the public service. Agencies involved in the response have completed, or are completing, reviews of their contribution to the response. That said, none of these reviews includes a focus on whole-of-government coordination.

On 23 July 2021, the NSW Government approved the establishment of the Microstrategy to respond to the additional challenges presented by Delta including the need to support communities most impacted by restrictions to movement and gathering in the LGAs of concern. An extensive range of government agencies were represented across eight Microstrategy workstreams, which coordinated with the existing EM arrangements to deliver targeted strategies to communities in high-risk locations and improve data and information sharing across government. This enhanced the public health, compliance, income and food support, communications and community engagement aspects of the response.

Agencies also leveraged learnings from early weeks of the Delta wave and were able to replicate those lessons in other locations. The use of pre-staging hubs in Fairfield to support food and personal hamper distribution was used a month later in Dubbo which acted as a central hub for more remote parts of the State.

Emergency management plans did not enable government to respond immediately to support vulnerable communities in high-risk LGAs or regional NSW

There are gaps in the emergency management plans relating to the support for individuals, families and businesses impacted by the stay-at-home orders and other restrictions to movement and gathering. These gaps affected agencies' ability to respond immediately when the need arose during Delta.

Emergency management plans and supporting instruments did not include provision for immediate relief for households, which meant arrangements for isolation income support and food security measures had to be designed in the early stages of Delta before it could be approved and deployed.

There were delays – sometimes only days, on occasion, weeks - in providing support to affected communities. In particular, there were delays to the provision of income support and in scaling up efforts to coordinate food and grocery hampers to households in isolation. In LGAs of concern, modest delays of a few days had a significant impact on people, especially those most vulnerable.

Although government issued stricter restrictions for workers in the Fairfield LGA on 14 July 2021, it only approved targeted income support for people in LGAs of concern on 16 August 2021.

Overall, agencies coordinated effectively to provide advice to government but there are opportunities to learn lessons to improve preparedness for future events

Agencies coordinated in providing advice to government. The advice was supported by timely public health information, although this was in the context of a pandemic, where data and information about the virus and its variants was changing regularly. However, agencies did not always consider the impact on key industries or supply chains when they provided advice to government, which meant that Public Health Orders would sometimes need to be corrected.

Public Health Orders were also updated as the response to Delta intensified or to address unintended consequences of previous orders. The frequency of changes hampered agencies' ability to effectively communicate changes to frontline staff and the community in a rapidly evolving situation.

The audit identified several occasions where there were delays, ranging from three to 21 days, between the provision of advice to government and subsequent decision-making (which we have not detailed due to the confidentiality of Cabinet deliberations). Agency officers advised of instances where they were not provided sufficient notice of changes to Public Health Orders to organise local infrastructure (such as traffic support for testing clinics) to support compliance with new requirements.

The COVID-19 pandemic arrived in Australia in late January 2020 as the bushfire and localised flooding emergencies were in their final stages. Between 2020 and mid-2021, agencies responded to the initial variants of COVID-19, managed a border closure with Victoria that lasted nearly four months and dealt with localised ‘flare-ups’ that required postcode-based restrictions on mobility in northern parts of Sydney and regional New South Wales. During this period, New South Wales had the opportunity to learn from events in Victoria which imposed strict restrictions on mobility across the State and the growing emergence of the Delta variant (Delta) across the Asia Pacific.

This section of the report assesses how emergency management and public health responses adapted to these lessons and determined preparedness for, and responses to, widespread community transmission of Delta in New South Wales.

The previous chapter discusses how agencies had refined the existing emergency management arrangements to suit the needs of a pandemic and describes some gaps that were not addressed. This chapter explores the first month of Delta (mid-June to mid-July 2021). It explores the areas where agencies were prepared and responses in place for the outbreak. It also discusses the impact of the gaps that were not addressed in the period prior to Delta and other issues that emerged.

NSW Health provided advice on the removal of restrictions based on up-to-date advice

The NSW Government discussed the gradual process for removing restrictions using the Doherty Institute modelling provided to National Cabinet on 10 August 2021. NSW Health highlighted the importance of maintaining a level of public health and safety measure bundles to further suppress case numbers. This was based on additional modelling from the Doherty Institute.

The Department of Regional NSW led discussion and planning around reopening with a range of proposal through August and September 2021. The Department of Premier and Cabinet and NSW Health jointly developed a paper to provide options on the restrictions when the State reached a level of 70% double dose vaccinations.

The roadmap to reopening was originally published on 9 September 2021. However, by 11 October 2021, the restrictions were relaxed when the 70% double dose threshold was reached to allow:

up to ten fully vaccinated visitors to a home (increased from five)
up to 30 fully vaccinated people attending outdoor gatherings (increased from 20)
weddings and funerals limits increased to 100 people (from 50)
the reopening of indoor pools for training, exercise and learning purposes only.

On the same day, the NSW Government announced further relaxation of restrictions once the 80% double dose threshold was reached. These restrictions were further relaxed on 8 November 2021. This included the removal of capacity restrictions to the number of visitors to a private residence, indoor pools to reopen for all purposes and density limits of one person for every two square metres, dancing allowed in nightclubs and 100% capacity in major stadia.

The NSW Government allowed workers in regional areas who received one vaccination dose to return to their workplace from 11 October 2021.

The Premier extended the date of easing of restrictions for unvaccinated people aged over 16 from 1 December to 15 December 2021.

Many agencies have undertaken reviews of their response to the Delta outbreak but a whole-of-government review has yet to be conducted

Various agencies and entities associated with the response to the Delta outbreak conducted after-action review processes. These processes assessed the achievements delivered, lessons learned and opportunities for improvement. However, a whole-of-government level review has not been conducted. This limits the New South Wales public service's ability to improve how it coordinates responses in future emergencies.

The agencies/entities that conducted reviews included:

South West Metropolitan region, Western NSW region, Fairfield Local Emergency Management Committee (LEMC), Dubbo Local Emergency Operations Controller (LEOCON), which were collated centrally by the State Emergency Operations Centre (SEOC)
Aboriginal Affairs NSW assessed representation and relevance of the emergency management arrangements for Aboriginal communities following the 2019 bushfires
Resilience NSW developed case studies to capture improved practice with regard to food security and supply chains
a community support and empowerment-focused after-action review undertaken by the Pillar 5 workstream of the Microstrategy.

Key lessons collated from the after-action reviews include:

the impact of variation in capability across agencies on the management of key aspects of the response including welfare support and logistics
issues with boundary differences between NSW Police Force regions, local government areas (LGA and local health districts (LHD) caused issues in delivering and coordinating services in an emergency situation
the need to improve relationships between state and local Government outside of acute emergency responses to improve service delivery
issues arising from impediments to information sharing between agencies and jurisdictions, such as:
- timeliness and accuracy of data used to direct compliance activities
- the impact of insufficient advance notice on changes to Public Health Orders
- timely access to data across public sector agencies and other jurisdictions to inform decision-making, analysis and communications
- gaps in data around ethnicity, geolocation of recent positive cases and infection/vaccination rates in Aboriginal communities.
the lack of Aboriginal community representation on many LEMCs
compared with the response to COVID-19 in 2020, improved coordination of communications with Culturally and Linguistically Diverse (CALD) populations with a reduction in overlapping messages and over-communication
improved attendance from agency representatives in LEMCs, and regional emergency operations centres (REOC) to improve interagency communications, planning, capability development and community engagement issues
deficiencies in succession planning and fatigue management practices
the potential for REOC Welfare/Well-being subgroups to be included as part of the wider efforts to community needs during emergencies.

NSW Health commenced a whole of system review of its COVID-19 response in May 2022. At the time of writing, the completion due date for the debrief is 7 November 2022. This debrief is expected to explore:

governance
engagement
innovation and technology
community impact
workforce impact
system impact and performance.

NSW Health is also undertaking a parallel Intra-Action Review that is focused on the public health aspects of the response with finalisation estimated for the end of November 2022. At the time of completing this performance audit report, NSW Health had not finalised these reviews and, as a result, we cannot validate their findings against our own observations.

Recent inquiries are likely to impact the governance of emergency management in New South Wales

In March 2022, the NSW Government established an independent inquiry to examine and report on the causes of, preparedness for, response to and recovery from the 2022 floods. The Flood Inquiry report made 28 recommendations, which the NSW Government supported in full or in principle. Some of the recommendations relate directly to the governance and leadership of emergency management arrangements in New South Wales.

The State Emergency Management Committee (SEMC) will likely be involved in, and impacted by, the recommendations arising from the Flood Inquiry with potential changes to its membership and reshaping of functional areas and agencies. At the same time, the SEMC may have a role in overseeing the changes that emerge from the SEOC consolidated after-action reviews. This can also extend to ensuring local and regional bodies have incorporated the required actions. There is a risk that the recommendations from the pandemic-based after-action reviews may not be considered due to the priority of action resulting from the Flood Inquiry.

Furthermore, there is potential for the SEMC to work with NSW Health during its system-wide review. Such an approach is likely to improve preparedness for future events.

Appendix two – Chronology 2020–2021

Copyright notice

Parliamentary reference - Report number #371 - released 20 December 2022

30 August 2022

Published

Effectiveness of the Biodiversity Offsets Scheme

Planning

Environment

Infrastructure

Internal controls and governance

Management and administration

Regulation

What the report is about

This audit examined whether the Department of Planning and Environment (DPE) and the Biodiversity Conservation Trust (BCT) have effectively designed and implemented the Biodiversity Offsets Scheme (‘the Scheme’) to compensate for the loss of biodiversity due to development.

Under the Biodiversity Conservation Act 2016, the Scheme enables landholders to establish in-perpetuity Biodiversity Stewardship Agreements on sites to generate credits for the unique biodiversity on that land. These credits can be sold to offset the negative impact of development on biodiversity.

What we found

DPE has not effectively designed core elements of the Scheme. DPE did not establish a clear strategic plan to guide the implementation of the Scheme.

The BCT has various roles in the Scheme but lacked safeguards against potential conflicts, creating risks to credit supply.

The effectiveness of its implementation has also been limited. Key concerns around the Scheme’s transparency, sustainability and integrity are yet to be fully resolved.

A market-based approach to biodiversity offsetting is central to the Scheme's operation but credit supply is lacking and poorly matched to growing demand. DPE has not established a clear, resourced plan to manage the shortage in credit supply. Data about the market, published by the DPE and the BCT, does not provide an adequate picture of credit supply, demand and price to readily support market participation.

These factors create a risk that biodiversity gains made through the Scheme will not be sufficient to offset losses resulting from development, and that the DPE will not be able to assess the Scheme’s overall effectiveness.

DPE is leading work with the BCT to improve the Scheme, but this is not yet guided by a long-term strategy with clear goals.

What we recommended

The audit made 11 recommendations to DPE and the BCT, focusing on:

a long-term strategic plan for the Scheme
improvements to the operation and transparency of the market and credit supply
frameworks to ensure the financial and ecological sustainability of biodiversity stewardship sites
enhanced public reporting and data management
resolving issues in conflicting governance and oversight.

Fast facts

96% – proportion of developer demand for species credits not met by current supply
97% – proportion of species credits that have never been traded on the biodiversity market
60% – proportion of the 226 Biodiversity Stewardship sites under active land management
$90m – value of developers’ obligations paid directly into the Biodiversity Conservation Fund
20% – proportion of developer obligations transferred to the BCT that have been acquitted.

The NSW Government's Biodiversity Outlook Report 2020 estimates that, without effective management, only 50% of species and 59% of ecological communities that are listed as threatened in New South Wales will still exist in 100 years. The NSW State of the Environment 2021 report identifies habitat destruction and native vegetation clearing as presenting the single greatest threat to biodiversity in the State.

According to the Organisation for Economic Co-operation and Development (OECD), biodiversity offsets are 'measurable conservation outcomes that result from actions designed to compensate for significant, residual biodiversity loss from development projects'. The OECD states that a feature of such schemes is that biodiversity offsets are intended to be implemented as the 'final step of a mitigation hierarchy' whereby reasonable first steps are taken to avoid and minimise the negative impacts.

The NSW Biodiversity Offsets Scheme was established in 2017 under the Biodiversity Conservation Act 2016 (the Act). The purpose of the Act is to 'maintain a healthy, productive and resilient environment for the greatest well-being of the community, now and into the future, consistent with the principles of ecologically sustainable development'.

The Department of Planning and Environment (DPE) designed and manages this Scheme. Under the Act, a feature of the Scheme is a 'market-based conservation mechanism through which the impacts to biodiversity can be offset.' The Scheme enables landholders to establish in-perpetuity Biodiversity Stewardship Agreements (BSAs) on sites to generate biodiversity credits, which can be sold to offset the negative impact of development on biodiversity. BSA sites are intended to be managed over the long term to generate the biodiversity gains required to offset the impact.

The Biodiversity Conservation Trust (BCT) monitors and supports landholders to manage BSA sites under the Scheme. This includes making payments to landholders from funds held in the Biodiversity Stewardship Payments Fund for undertaking the required biodiversity management actions.

This Scheme was preceded by several other offsetting schemes in New South Wales, including the BioBanking scheme that started in 2008. DPE has arrangements to transition sites, credits, and offset obligations from this and other previous schemes.

The current biodiversity credit market in New South Wales consists of 1394 different types of ecosystem credits, which are approved to be traded in 364 different offset trading groups, and 867 different species credits. Trading rules, set out in the Biodiversity Conservation Regulation 2017 (the Regulation), prioritise offsetting the obligations of a development with like-for-like ecosystem or species credits.

The Scheme is implemented through the planning system in New South Wales. Proposed development that involves the clearing of native vegetation, and meets certain thresholds, is required to undertake a Biodiversity Development Assessment Report. These reports determine an offset obligation, in biodiversity credits, to compensate for the biodiversity loss proposed. These reports are considered by consent authorities (such as a council, for local development, or by the Minister for Planning for major projects). An offset obligation is then included in the conditions of development approval.

In addition to establishing a market for trading between developers, with offset obligations, and landholders, who sell credits from their BSA sites, the Scheme allows developers to pay into the Biodiversity Conservation Fund and transfer their obligations to the BCT. This allows the developer to proceed with their project. The BCT must then meet these acquired obligations by buying the required credits, or by undertaking other approved activities set out in the Regulation. The BCT has more options than developers on how and when it acquits its obligations.

This audit examined whether DPE and the BCT have effectively designed and implemented the Biodiversity Offsets Scheme to compensate for the loss of biodiversity due to development.

Conclusion

The Department of Planning and Environment (DPE) has not effectively designed core elements of the NSW Biodiversity Offsets Scheme. DPE did not establish a clear strategy to develop the biodiversity credit market or determine whether the Scheme’s operation and outcomes are consistent with the purposes of the Biodiversity Conservation Act 2016.

The effectiveness of the Scheme's implementation by DPE and the BCT has been limited. A market-based approach to biodiversity offsetting is central to the Scheme's operation but credit supply is lacking and poorly matched to growing demand: this includes a potential undersupply of in-demand credits for numerous endangered species. Key concerns around the Scheme’s integrity, transparency, and sustainability are also yet to be fully resolved. As such, there is a risk that biodiversity gains made through the Scheme will not be sufficient to offset losses resulting from the impacts of development, and that DPE will not be able to assess the Scheme’s overall effectiveness.

DPE developed the Scheme following a 2014 review of the State's biodiversity legislation and building on previous offsetting arrangements in New South Wales. At the time the Scheme commenced in 2017, DPE lacked a strategic plan to guide its implementation, set clear outcomes and performance measures, and respond effectively to risks. DPE did establish a detailed scientific method for assessing biodiversity impacts under the Scheme and a system for accrediting assessors to undertake this technical work. These are important foundations for the robustness of the Scheme.

The Scheme has been in place for five years, but the biodiversity credit market is not well developed. Most credit types have never been traded. Also, according to DPE data, around 90% of demand cannot be matched to credit supply – and there is likely to be a substantial credit undersupply for at least seven endangered flora species, three endangered fauna species, and eight threatened ecological communities. Credit demand is projected to grow – especially in relation to the NSW Government’s $112.7 billion four-year infrastructure pipeline.

As with any market, potential participants need information about demand and price in order to understand risks and opportunities. But information about the biodiversity credit market, published by DPE and the BCT, does not provide an adequate picture of credit supply, demand and price to support market participation. This can create uncertainty for landholders who may be weighing the costs and benefits of establishing Biodiversity Stewardship Agreement (BSA) sites, and for development proponents who need to know whether they can purchase sufficient credits and at what price. Development proponents who lack market information are being incentivised to meet their offset obligations by paying into the Biodiversity Conservation Fund, which is managed by the BCT. This option provides developers with more certainty that enables them to progress their projects, but does not result in the development being offset until the BCT later acquits the obligation.

The BCT has multiple roles in the Scheme. These include setting-up and administering BSAs which generate credits, acquiring offset obligations from developers who pay into the Biodiversity Conservation Fund, and purchasing credits to meet its acquired obligations. There have been inadequate safeguards to mitigate the potential for conflicts between these roles. As the BCT directs its efforts towards facilitating BSA sites and purchasing credits to meet its obligations, there is a risk that government is insufficiently focused on supporting overall credit supply.

DPE has begun developing a credit supply strategy. Its absence, and a lack of clarity around responsibility for credit supply under the Scheme, has contributed to the significant risk of insufficient and poorly matched credits to meet the growing demand. The BCT's acquired obligations from developers have been increasing year-on-year, and are likely to continue to grow.

There is a risk that the BCT will not have sufficient funds to acquit its growing obligations with like-for-like credits, which could result in sub-optimal biodiversity outcomes. The Scheme rules allow the BCT to acquit its obligations with measures other than like-for-like credits. DPE has not provided clear guidance to the BCT on when or how to do so, or how this would fulfil the 'no net loss' of biodiversity standard.

There are transparency and integrity risks to the Scheme. DPE does not maintain a public register of biodiversity credits with complete information, including credits' transaction histories, consistent with the legislative intent for a single register. DPE also does not have ready access to information to check that developments have been acquitted with the required credits.

Risks to the sustainability of the Scheme and its outcomes remain. DPE and the BCT have not yet implemented a decision-making and intervention framework to ensure adequate initial and ongoing funding for the long-term management of new and existing BSA sites. DPE also did not collect ecological data from sites under previous schemes before they were transitioned, and BCT only introduced ecological monitoring requirements for new BSA sites in March 2021. The lack of monitoring requirements creates a risk that the biodiversity gains, which BSA sites are required to generate to offset biodiversity losses, will not be measured and achieved under the Scheme.

This section presents an overview of the status of the biodiversity credit market in New South Wales. It describes development of the market under the Scheme in the context of transitional arrangements from previous schemes, and the extent of market participation and transactions to date. It also presents information about emerging trends in credit demand and supply.

Background

A purpose of the Biodiversity Conservation Act 2016 (the Act) is to establish a market-based conservation mechanism through which impacts on biodiversity can be offset. Sufficient credits of appropriate types, which are well matched to demand, are necessary for enough transactions to inform prices and enable efficient like-for-like offsetting. For transactions to occur efficiently in the market, participants require reliable and easy-to-access information about supply, demand and price.

The Scheme was established in 2017 with an existing credit supply and offset obligations (credit demand) as regulations had been introduced to preserve and transition credits and obligations from previous schemes including the BioBanking Scheme, which started in 2008.

Credits under the BioBanking scheme are referred to as 'BBAM credits', and credits under the current Scheme are referred to as 'BAM credits'. BBAM credits are still available, and the transitional arrangements enable DPE to determine the 'reasonable equivalence' of these to the current Scheme's credit numbers and classes. DPE has stated that reasonable equivalence of credits is based on ecological not financial equivalence.

This section assesses the clarity and alignment of the goals of the Scheme to key features of its design and operations. It also examines structural elements of the Scheme that aim to maintain integrity within administering agencies, and the status of actions to address risks or issues.

Background

The Biodiversity Conservation Act 2016 (the Act) sets out the legal framework for the Scheme. Given the complexities, financial interests, and range of stakeholders associated with the Scheme, it requires strong safeguards. Transparency and assurances around the Scheme's integrity are also relevant to participants' confidence in it, which in turn is important for market development.

Core components of the Scheme, identified in section 1.3 of the Act, are to be consistent with the ‘principles of ecologically sustainable development’.

The Act and other administrative arrangements of government allocate responsibility to DPE and the Minister for Environment and Heritage for the Scheme’s design and elements of its implementation. This includes responsibility for the Scheme’s policy, legislative and regulatory framework.

Responsibility is allocated to the BCT for implementing and operating certain elements of the Scheme. This includes administering Biodiversity Stewardship Agreements (which generate credits) and securing offsets on behalf of development proponents who pay into the Biodiversity Conservation Fund to meet their offset obligations.

This broad legislative framework is not intended to detail responsibilities for the full range of roles and activities that agencies need to take to implement and regulate the Scheme effectively, and ensure its good governance. Agencies should do this as part of sound and transparent public administration.

This section assesses how effectively components of the Scheme have been designed and are being implemented to provide assurance that the impacts of development are being avoided and minimised such that only ‘unavoidable’ impacts remain to be offset. The section also assesses whether the Scheme and its market embeds the necessary controls to ensure that obligations are offset as required.

Background

The Biodiversity Assessment Method, and the quality of its application by DPE-Accredited Assessors, is critical to the robustness the Scheme. The method is designed to be applied to avoid and minimise impacts at proposed development sites before identifying offset obligations. The effectiveness of Scheme outcomes requires that obligations are offset with the retirement of the necessary and appropriate credits.

The Biodiversity Conservation Act 2016 (the Act) requires the relevant Minister (the current Minister for Environment and Heritage) to establish a method for the purpose of assessing the impacts of actions on threatened species and ecological communities.

The Act also specifies that this method must be applied by an accredited person. DPE is responsible for the design and implementation of this accreditation system, arrangements for which are set out in an instrument under the Act.

A Biodiversity Development Assessment Report is a report by a DPE-Accredited Assessor using the Biodiversity Assessment Method. These reports assess the biodiversity impacts of the proposed development and establish offset obligations as part of the development approval process. It is important that local councils and other development consent authorities understand and can assess the quality of these reports.

DPE manages the process of ‘retiring’ credits against the identified offset obligations. Once a credit is retired it cannot be reused to acquit another obligation, which is critical to Scheme outcomes. DPE is also responsible for maintaining records of credit transactions, which results in a legally binding transfer of credit ownership from seller to buyer.

This section assesses how effectively the supply of biodiversity credits has been supported by encouraging and enabling landholders to participate in the Scheme. It also assesses whether sufficient action is underway to address issues and risks to the establishment of BSA sites, especially in the context of known credit supply issues (section 2).

Background

Credit supply is generated when a landholder establishes a Biodiversity Stewardship Agreement (BSA) on their land. Establishing a BSA site requires landholders agree to an in-perpetuity management plan, so it is important that they have sufficient support and access to relevant information about risks and opportunities when deciding to do so. Ensuring adequate credits supply underpins the Scheme's ability to deliver the intended biodiversity outcomes.

A landholder establishes an offset site through a BSA, which is a legal agreement with the Minister of Environment and Heritage (delegated to the Biodiversity Conservation Trust). The BSA is registered on the title of the land.

DPE-Accredited Assessors develop Biodiversity Stewardship Site Assessment Reports, which are submitted by landholders to the BCT as part of the BSA application. These reports apply the Biodiversity Assessment Method to detail the number and types of credits that a BSA site is expected to generate by implementing a 20-year management plan. The BCT issues credits to landholders on registration of the BSA.

Ensuring an adequate and appropriate supply of credits is important so that like-for-like matches between credits and obligations can be efficiently secured in a timely way. This minimises the use of offset variation rules, and can avoid potential delays in developers securing appropriate offsets to meet their offset obligations. It also makes it easier for the BCT to locate the necessary credits to acquit the obligations it acquires from developers.

This section assesses how effectively BSA sites, which need to be managed by landholders to generate the biodiversity gains represented by credits, are regulated and supported by the Biodiversity Conservation Trust. It also assesses whether actions have been taken to address identified risks to the suitability of funds required to ensure long-term BSA site management.

Background

For Biodiversity Stewardship Agreement (BSA) sites to achieve the expected biodiversity gains to offset losses from development impact, they need sufficient funding for the required management actions, and to be effectively regulated and supported over the long-term. Funding for these sites is generated through the returns on landholders' initial investment (Total Fund Deposit). The BCT is required to monitor landholders' compliance with BSAs and should also ensure ecological outcomes on sites are measured.

DPE and the BCT are responsible for developing and implementing a system of oversight to ensure the implementation of management actions at BSA sites is delivering the intended outcomes in a financially and environmentally sustainable way. The agencies' key mechanisms for delivering this are:

calculating the costs of the required land management actions in perpetuity
annual reporting systems for monitoring compliance with land management requirements
reporting systems for monitoring ecological outcomes arising from land management actions.

Landholders are required to pay the required Total Fund Deposit amount for their BSA accounts into the Biodiversity Stewardship Payments Fund, which is held in trust and managed by the BCT. A costing tool is used by landholders to calculate the value of the deposit, based on the required management payments (in perpetuity), administrative fees, and the discount rate applied.

The Total Fund Deposit can be paid upfront but is usually paid from the proceeds of the sale of credits. Once this occurs the BSA site becomes 'active' and management payments commence to enable the landholder to undertake the required management actions. BSA sites that have not yet sold enough credits to make the deposit are 'passive' sites that do not require active land management.

Sites in passive management for an extended duration present risks to biodiversity outcomes, and potentially to Scheme integrity, if the quality of credits is undermined due to an absence of active site management.

Appendix two – Like-for-like, variation and ancillary rules

Appendix three – Detail on progress of the IIAP

Appendix four – About the audit

Appendix five – Performance auditing

Copyright notice

Parliamentary reference - Report number #367 - released 30 August 2022

8 February 2022

Published

Integrity of grant program administration

Local Government

Premier and Cabinet

Internal controls and governance

Management and administration

What the report is about

This report assessed the integrity of the assessment and approval processes for two grant programs:

Stronger Communities Fund Round 2 (tied grants round), which was administered by the former Office of Local Government (OLG) and provided $252 million to newly amalgamated councils and other councils that had been subject to a merger proposal during 2017–18 and 2018–19.
Regional Cultural Fund, which was administered by Create NSW (now within the Department of Premier and Cabinet) and awarded $100 million for cultural projects in regional NSW.

What we found

The assessment and approval process for Round 2 of the Stronger Communities Fund lacked integrity. The government decided to prioritise funds for councils that had worked constructively with the government through the 2016 merger process.

However, this information was not included in the program guidelines. The program guidelines were not published and did not contain details of selection and assessment processes. Councils and projects were instead identified by the former Premier, Deputy Premier and Minister for Local Government and communicated to OLG with little or no information about the basis for the council or project selection. There was no merit assessment of identified projects. This process resulted in 96 per cent of funds allocated to coalition state seats.

The assessment process that Create NSW used for the Regional Cultural Fund was robust and produced transparent and defensible recommendations to the minister. However, the former Minister for the Arts, in consultation with the former Deputy Premier, did not follow the recommendations of the independent assessment panel in 22 per cent of cases. Reasons for these changes were not documented by Create NSW.

What we recommended

The Department of Premier and Cabinet should develop a model for grant administration that must be used for all grant programs administered in NSW that:

is based on ethical principles such as impartiality, equity and transparency
ensures assessments and decisions can be made against clear eligibility criteria
ensures accountability for decisions and actions of all those who are involved in the program
includes minimum mandatory administration and documentation standards
requires any ministerial override of recommendations to be documented.

The Department of Planning and Environment should ensure that guidelines prepared for all grant programs are published and include a governance framework that includes accountabilities and key assessment steps.

Fast facts

Stronger Communities Fund Round 2

$252m allocated to 24 councils
96% allocated to council projects in coalition state seats
36% of the funding ($90m) was allocated to a single council
$8m in projects identified before the program guidelines were finalised

Regional Cultural Fund

405 applications received across three funding rounds
$99m awarded for 147 cultural projects in regional NSW
22% panel recommendations not followed by ministers
$9.3m awarded to projects not recommended by panel

Grants are frequently used by the state government to deliver funds to councils and community organisations to provide infrastructure and services important to their local communities. Grant programs are administered by NSW Government agencies in line with priorities and objectives set by the government.

Guidance for agencies administering grant programs is available in the Good Practice Guide to Grants Administration (the 'DPC Guide') which is maintained by the Department of Premier and Cabinet (DPC). In addition to this guide, some agencies maintain their own grant program policies and guidelines. More broadly, public servants are required to comply with financial legislation and the Government Sector Employment Act 2013 which include requirements to be transparent, fiscally responsible and focus on the efficient, effective and prudent use of resources.

The objective of this performance audit is to assess the integrity of the assessment and approval processes for NSW Government grant programs.

The audit focuses on two grant programs, both administered during the 2017–18 and 2018–19 financial years. The Stronger Communities Fund (round two tied grants round) was administered by the former Office of Local Government (OLG), now referred to as the Local Government Group within the Department of Planning and Environment (DPE). The fund awarded $252 million to 24 councils that had amalgamated in 2016 or which had been the subject of a merger proposal. The Regional Cultural Fund was administered by Create NSW, now within the Department of Premier and Cabinet (DPC). The fund awarded $100 million to organisations in regional New South Wales to support the development of cultural infrastructure in regional areas.

The audit comments upon the role played by the then Premier, Deputy Premier, ministers and their staff in the audited grant programs to provide context. The Audit Office of NSW cannot compel those individuals to participate in the audit or provide documents. In all cases, reference to the Premier, Deputy Premier, ministers, MPs and their staff refers to the individuals who were in those roles at the time the grant programs were administered unless otherwise noted.

Conclusion

Stronger Communities Fund

The assessment and approval processes for round two of the Stronger Communities Fund (SCF) lacked integrity. The program guidelines developed by the Office of Local Government (OLG) were deficient in a number of aspects and were not used to guide the selection of councils or projects for funding. Of the 55 councils that met the eligibility criteria in the guidelines, 24 received funding. Ninety-six per cent of available SCF funding was allocated to projects in coalition-held state government electorates. Funding for councils was determined by the then Premier, Deputy Premier and Minister for Local Government and communicated by their staff through emails to OLG with little or no information about the basis for the council or project selection. OLG administered payment of these funds without questioning or recording the basis for selection. For the 22 councils where funding allocations were determined by the former Premier and Deputy Premier, the only record of their approval is a series of emails from their staff. The exclusion of key information from the program guidelines and the lack of formality in approving 22 of the 24 funding allocations prevent accountability and transparency over the government's approach to selecting councils for funding.

In July 2017, the NSW Government established priorities for how the remaining SCF funds should be used. The funds were to be used to cover costs associated with councils' legal action relating to amalgamation, to reimburse costs incurred by councils that were unable to merge but had participated constructively in the merger process, and to fund community initiatives in council areas that had amalgamated in 2016.

OLG developed the initial grant program guidelines between July 2017 and September 2017 in consultation with the then Premier, Deputy Premier and Minister for Local Government and their staff. These were then revised in June 2018. Neither version of the guidelines made reference to the type of projects that were to be prioritised and did not set out how the funds should be administered in accordance with these priorities. The guidelines also did not include information about how councils and projects would be selected and made no provision for an assessment of identified projects against the criteria for eligible projects in the guidelines. OLG did not publish the guidelines and the process adopted by the Premier, Deputy Premier and Minister for Local Government to select projects did not reference the criteria for eligible projects in the guidelines. The selection of councils and funded projects resulted in 96 per cent of available funding being allocated to projects in coalition-held state government electorates.

The Minister for Local Government was responsible for distributing the SCF funds but only approved funding for projects at two of 24 councils, both paid in November 2017. Projects at the other 22 councils were identified by the former Premier and Deputy Premier between June 2018 and June 2019 in consultation with other coalition Members of Parliament and communicated to OLG through emails from Premier and Deputy Premier's staff. When making payments in response to email instructions from staff in the offices of the Premier, Deputy Premier and Minister for Local Government, OLG did not seek to ensure that identified projects were consistent with the guidelines and made payments to selected councils with little or no information to justify them. With the exception of the two funding allocations approved by the then Minister for Local Government, OLG also did not ensure that formal records were in place to document approval for the remaining 22 funding allocations.

Regional Cultural Fund

The assessment process that Create NSW used for the Regional Cultural Fund was robust and produced transparent and defensible recommendations to the then Minister for the Arts. However, the integrity of the approval process for funding allocations was compromised because the minister, in consultation with the then Deputy Premier, did not follow the recommendations of the independent assessment panel in multiple cases and the reasons for making changes were not documented by the minister's office or Create NSW.

All projects that received funding were assessed by Create NSW as eligible for funding under the program. An independent assessment panel assessed applications against the program objective and criteria. This process was designed in line with good practice in grants administration and was implemented consistently. The then Minister for the Arts, in consultation with the former Deputy Premier, did not follow the panel's recommendations for 22 per cent, or more than one in five, of the applications assessed for funding. Thirty-four applications that were recommended by the independent panel did not receive any funding. In the second funding round, seven of the top ten ranked applications were not funded.

The Minister for the Arts approved funding for 22 applications that were not recommended by the independent panel. This resulted in around $9.3 million being awarded to applicants that were not rated highest by the independent panel, including six applicants that received grants of $500,000 or more. Most did not meet one or more assessment criteria and received low ratings.

The then minister did not provide reasons for not approving funding in line with the recommendations of the panel. This did not breach any legislation or guidelines in New South Wales, but it compromised Create NSW's ability to demonstrate integrity and value for money in the RCF approval process. It creates a clear perception that factors other than the merits of the projects influenced funding decisions.

Create NSW's administration of the Regional Cultural Fund was based on relevant legislative requirements and good practice guidance. The objectives of the program were defined clearly and the guidelines and criteria were consistent with the program objectives. The governance and probity framework was appropriate for the size and nature of the program.

Appendix two – List of funded projects - Stronger Communities Fund Round 2

Appendix three – List of funded projects - Regional Cultural Fund

Appendix four – About the audit

Appendix five – Performance auditing

Copyright notice

Parliamentary reference - Report number #361 - released 8 February 2022.

27 July 2021

Published

Fast-tracked Assessment Program

Planning

Industry

Environment

Compliance

Internal controls and governance

Management and administration

Service delivery

What the report is about

This report examines the effectiveness of the Fast-tracked Assessment Program, administered by the Department of Planning, Industry and Environment (DPIE) between April 2020 and October 2020.

The program aimed to support the construction industry during the COVID-19 crisis by accelerating the final assessment stages for planning proposals and development applications.

DPIE selected projects and planning proposals for fast tracked assessment that demonstrated the potential to:

deliver jobs
progress to the next stage of development within six months of determination
deliver public benefit.

The audit assessed whether the Fast-tracked Assessment Program achieved its objectives while complying with planning controls.

What we found

Through tranches three to six of the program, DPIE successfully accelerated the final stages of 53 assessments. DPIE reported that 89 per cent of these proceeded to the next stage of development within six months.

Assessment of projects and planning proposals was compliant with legislation and other requirements. However, the audit found gaps in DPIE's management of conflicts of interest.

DPIE has not evaluated or costed the program and is not able to demonstrate the extent to which it provided support to the construction industry during COVID-19.

Aspects of the program have been incorporated into longer term reforms to create a new level of transparency over the progress and status of planning assessments.

What we recommended

DPIE should:

strengthen controls over conflicts of interest
evaluate the Fast-tracked Assessment Program.

Fast facts

Construction industry support

The program aimed at providing immediate support to the construction industry during the COVID-19 crisis

59 fast-tracked projects

59 projects and 42 planning proposals projects were assessed in six tranches

89% of all fast-tracked assessments in tranches three to six progressed to the next stage of the planning process within six months of determination

In April 2020, the Department of Planning, Industry and Environment (DPIE) introduced programs aimed at providing immediate support to the construction industry during the COVID-19 crisis. One of these was the Fast-tracked Assessment Program. This program identified planning proposals and development applications (DAs), across six tranches, that were partially-assessed and could be accelerated to determination.

In accordance with the program objectives, the planning proposals and DAs selected for fast-tracked assessment had to:

deliver jobs – particularly in the construction industry
be capable of progressing to the next stage of development within six months of determination
deliver public benefit.

At the same time, the Fast-tracked Assessment Program was to lay a foundation for future reform of the planning system by piloting changes in the assessment process that could be adopted in the medium to long term.

This audit assessed whether the Fast-tracked Assessment Program achieved its objectives while complying with planning controls. The audit focused on tranches three to six of the program, which were determined between July 2020 and October 2020. The rationale for focusing on these four tranches was that the program design had been slightly modified after the first two tranches to address identified risks.

Conclusion

Through tranches three to six of the Fast-tracked Assessment Program, DPIE successfully accelerated the final stages of 53 assessments. DPIE’s internal monitoring indicates that 31 DAs and 16 planning proposals selected in these tranches proceeded to the next stage of development within six months of determination. DPIE achieved this while also successfully managing the risk of non-compliance with planning controls arising from the accelerated process. While DPIE has incorporated components of the Fast-tracked Assessment Program into other longer-term reforms, it has not evaluated the program and is not able to demonstrate the extent to which the program provided support to the construction industry during COVID-19.

Between April and October 2020, DPIE adopted a case management approach to accelerate the final stages of assessment for 42 planning proposals and 59 DAs in six tranches. Tranches three to six were the focus of this audit and included 22 planning proposals and 31 DAs. Applicants involved in the program were expected to progress their projects to the next stage of development within six months of determination. While DPIE had no way of compelling applicants to do this and relied on non-binding commitments obtained from applicants, DPIE’s internal monitoring indicates that 47 of the 53 applicants selected in tranches three to six honoured this commitment.

Fast-tracked assessment only applied to the final stages of assessment and required DPIE staff and other stakeholders to work towards a determination deadline. DPIE effectively used a case management approach to manage the risk that the accelerated timeframe could result in planning controls not being fully compliant with legislation. There is some room for improvement in the process, as four of 28 staff assessing planning proposals and DAs had not lodged current conflict of interest declarations.

Based on the results of and learnings from the Fast-tracked Assessment Program, DPIE has incorporated some elements of the program into other longer-term reforms. There is now increased transparency about when applicants can expect to receive a planning determination and DPIE has also introduced a case management approach for strategic and high priority planning applications. Applicants benefiting from case-managed assessment are now required to commit to a formal service charter that specifies the obligations of both DPIE and the applicant.

DPIE has not evaluated the Fast-tracked Assessment Program to understand the costs and benefits of the program, nor which aspects of the program were most effective as a basis for future reform.

Appendix one – Response from agency

Appendix two – Planning determination pathways

Parliamentary reference - Report number #354 - released (27 July 2021).

22 April 2021

Published

Addressing public inquiry recommendations - Emergency response agencies

Community Services

Justice

Environment

Internal controls and governance

The Auditor-General for New South Wales, Margaret Crawford, released a report today examining how effectively NSW emergency response agencies address public inquiry recommendations.

The audit found that agencies’ governance arrangements to address public inquiry recommendations have important and consistent gaps.

The agencies did not sufficiently verify that they had implemented accepted recommendations as intended, and in line with the outcomes sought. This creates a risk that issues with disaster prevention or responses highlighted by public inquiries are not addressed in a complete or timely way and may persist or recur in the future.

The audit also found that agencies did not always nominate milestone dates or priority rankings for accepted recommendations, and so could not demonstrate they were managing or monitoring them effectively.

The audit examined how five emergency response agencies – Fire and Rescue NSW, National Parks and Wildlife Service, NSW Rural Fire Service, NSW State Emergency Service and Resilience NSW – have addressed accepted recommendations from public inquiries over the last ten years. The audit assessed the effectiveness of governance arrangements to track recommendation implementation.

The report makes six recommendations to improve disaster response agency arrangements to address public inquiry recommendations.

While the focus of this audit was agencies that responded to natural disasters, the findings and recommendations from this report have the potential to be applied across the NSW public sector in response to public inquiries related to other areas of government activity.

Major disasters and emergencies often trigger public post-event inquiries and reviews. The purpose of these reviews is to identify the causes of disaster or emergency events and areas for future improvement in prevention, preparedness, response and recovery. Areas identified for future improvement are then the subject of recommendations to government or government agencies and, when accepted, become public commitments to action.

Responses to the bushfires of 2019–20 followed this pattern, producing both NSW and Australian Government commissioned inquiries: the NSW Bushfire Inquiry and the Royal Commission into National Natural Disaster Arrangements. Both highlighted the significant volume of inquiries in recent years. Both asked whether agency responses to previous inquiries were improving Australia's capacity to prevent, prepare for, respond to and recover from natural disasters. The inquiries reflected on the difficulty of answering this question due to insufficient clarity and transparency on whether the improvements and risks that inquiries identified have been addressed in practice.

This audit stems from similar questions about how effectively government agencies in NSW are delivering on public inquiry recommendations. It assessed how five emergency response agencies have addressed accepted recommendations from 17 public inquiries over the last ten years. For this audit, we considered inquiries and reviews that affected agencies' operational capacity to respond to and recover from bushfire, floods and storms. The in scope public inquiries for this audit relate to:

the 2013–14, the 2016–17 and the 2017–18 bushfire seasons
severe storms and floods in 2015, 2016 and 2017
workforce issues affecting the ability of agencies to respond to natural disasters.

The public inquiries we reviewed included coronial inquiries and inquests, parliamentary inquiries, independent reports and reviews, performance audits and recovery coordinator reports. In total, we looked at the processes that agencies used to implement 191 recommendations from these 17 public inquiries.

The objective of this audit was to determine how effective emergency response agencies are in addressing accepted recommendations from public inquiries. To answer our audit objective, we asked two questions:

Do agencies have effective governance arrangements in place to respond to, monitor and implement accepted recommendations from public reviews and inquiries?
Do agencies provide timely and accurate information on the implementation of accepted inquiry recommendations to senior decision makers and the public?

The agencies reviewed were:

Fire and Rescue NSW
NSW National Parks and Wildlife Service (now a division of the Department of Planning, Industry and Environment)
NSW Rural Fire Service
NSW State Emergency Service
Resilience NSW (formerly the Ministry for Police and Emergency Services; and the Office of Emergency Management).

While the focus of this audit was agencies that respond to natural disasters (flood, bushfire and storms), the findings and recommendations from this report have the potential to be applied across the NSW public sector in response to public inquiries related to other areas of government activity.

Conclusion

The arrangements used by NSW emergency response agencies to address public inquiry recommendations have important and consistent gaps.

For two-thirds of the recommendations reviewed as part of this audit, the agencies did not sufficiently verify that they had been implemented as intended, and in line with the outcomes sought. This exposes risks that gaps in disaster responses are not addressed in a complete or timely way and persist or recur in the future.

Two-thirds of the recommendations reviewed as part of this audit had also not been allocated milestone dates or priority rankings, and as such the audited agencies are less accountable and could not demonstrate they were managing or monitoring them effectively.

None of the agencies publicly report the status of actions taken to address public inquiry recommendations, limiting accountability and transparency.

The agencies subject to this audit all address accepted recommendations from public inquiries with varying degrees of formality and transparency. No agency maintained a central and comprehensive approach – such as a register – to track recommendations for all public inquiries.

The agencies do not consistently review evidence that recommendations have been implemented effectively, and in line with the intention of the inquiry. The agencies also often failed to set milestone dates or test that recommendations had been actioned as committed. This increases the risk that recommendations are overlooked or not addressed in line with the intent, priority and risk of the recommendation. In turn, this raises the possibility that gaps and issues identified by public inquiries are not adequately resolved and could persist or recur in future disasters.

None of the audited agencies published a summary of progress made in implementing accepted recommendations to update the public. There are transparency and accountability benefits in doing so. This echoes the findings of the NSW Bushfire Inquiry and the Royal Commission into National Natural Disaster Arrangements. Both inquiries noted that it is difficult, and sometimes impossible, to determine the implementation status for many recommendations by publicly available information.

One factor hindering agencies from publishing this information is the lack of a consistent means of tracking public inquiry recommendation implementation. Adopting a consistent approach, within and across agencies, should help to overcome this barrier in the future.

This chapter reviews the way agencies have responded to, monitored and ensured they have implemented accepted recommendations from public inquiries.

This chapter reviews how agencies provided information to senior decision makers, agency Audit and Risk Committees and the public on the implementation of accepted recommendations from public inquiries.

Appendix two – Identifying in scope inquiries

Appendix three – In scope inquiries

Appendix four – Recommendations reported by agencies as still in progress (detail)

Appendix five – Agency reported recommendation implementation status (unaudited)

Appendix six – About the audit

Appendix seven – Performance auditing

Copyright Notice

Parliamentary reference - Report number #348 - released (22 April 2021).

17 August 2020

Published

Governance and internal controls over local infrastructure contributions

Local Government

Planning

Environment

Compliance

Financial reporting

Infrastructure

Internal controls and governance

Management and administration

Service delivery

The Auditor-General for New South Wales, Margaret Crawford, released a report today on how well four councils managed their local infrastructure contributions during the 2017-18 and 2018-19 financial years.

Local infrastructure contributions, also known as developer contributions, are collected from developers to pay for local infrastructure such as drainage, local roads, open space and community facilities. Controls over local infrastructure contributions help to ensure that all contributions owed are collected, funds are spent as intended, and any contributions paid in the form of works-in-kind or dedicated land are correctly valued.

The audit found that Blacktown City Council and City of Sydney Council provided effective governance over their local infrastructure contributions whereas Central Coast and Liverpool City Councils’ governance arrangements require improvement.

The audit found that three councils had spent local infrastructure contributions in accordance with approved contributions plans. Central Coast Council and the former Gosford City Council had spent $13.2 million on administration costs in breach of the Environmental Planning and Assessment Act 1979. These funds were repaid into the council’s local infrastructure fund during the course of the audit.

The Auditor-General made a number of recommendations for each council relating to improving controls over contributions and increasing transparency.

Read full report (PDF)

This audit examined the effectiveness of governance and internal controls over local infrastructure contributions, also known as developer contributions, held by four councils during the 2017–18 and 2018–19 financial years.

This performance audit was conducted with reference to the legislative and regulatory planning framework that was in place during that period.

Our work for this performance audit was completed at the end of March 2020 when we issued the final report to the four audited councils and the Department of Planning, Industry and Environment. We received their respective formal responses to the report’s recommendations during April and May 2020.

Concurrently to this audit, we sought Crown Solicitor’s advice (the ‘Advice’) regarding the use of local infrastructure contributions collected by local councils under the Environmental Planning and Assessment Act 1979 (‘the EPA Act’) for our financial audit work. The Advice clarified the applicable legislative requirements with reference to the application, investment and pooling of local infrastructure contributions. The Advice is included in Appendix 2 of this report. The Advice has not impacted on the findings and recommendations of this report.

Councils collect Local Infrastructure Contributions (LICs) from developers under the Environmental Planning and Assessment Act (1979), the Local Government Act (1993) and the City of Sydney Act (2000) (EP&A Act, LG Act and City of Sydney Act) to fund infrastructure required to service and support new development. At 30 June 2018, councils across NSW collectively held more than $3.0 billion in LICs collected from developers. Just over $1.37 billion in total was held by ten councils. Councils collecting LICs must prepare a contributions plan, which outlines how LICs will be calculated and apportioned across different types of infrastructure. Councils that deliver water and sewer services prepare a development servicing plan (DSP) which allows them to collect contributions for water and sewer infrastructure.

Development timeframes are such that there is often several years between when LICs are collected and the infrastructure is required. Good governance and internal controls are needed over these funds to ensure they are available when needed and spent appropriately.

This audit assessed the effectiveness of governance and internal controls over LICs collected by four councils during the 2017–18 and 2018–19 financial years: Blacktown City Council, Central Coast Council, City of Sydney Council and Liverpool City Council. As at June 2018 these councils held the four highest LIC balances, each in excess of $140 million.

Audit Conclusion

Three of the four councils audited were currently compliant with legislation, regulations and Ministerial Directions regarding LICs. All had gaps in governance and controls over LICs which limited effective oversight.

Three of the councils included in the audit complied with legislation, regulations and Ministerial Directions relating to LICs. Central Coast Council breached the EP&A Act between 2001 and 2019 when it used LICs for administration costs. These funds were repaid in late 2019.

While controls over the receipt and expenditure of contributions funds were largely in place at all councils, there were some exceptions relating to valuing work and land delivered in lieu of cash. Three councils do not provide probity guidance in policies relating to LICs delivered through works-in-kind. Three of the councils had contributions plans that were more than five years old.

Staff at all four councils are knowledgeable about LICs but not all councils keep procedures up to date. Three councils' governance frameworks operate effectively with senior officers from across the council involved in decisions about spending LICs, entering into voluntary planning agreements (VPAs) and reviewing contributions plans.

Transparency over key information relating to LICs is important for senior management so they can make informed decisions, and for the community who pay LICs and expect infrastructure to be provided. During the period of the audit, none of the councils included in the audit provided sufficient information to senior management or their councillors about the projected financial status of contributions plans. This information would be valuable when making broader strategic and financial decisions. Information about LIC levies and intended infrastructure is available to the community but not always easy to find.

A strong governance framework is important at each council to ensure that the funds are managed well, available when needed and spent as intended. The audit examined the following features of each council's governance framework as they apply to LICs:

decision-making by councillors and council officers relating to LICs
monitoring delivery of contributions plans and DSPs including:
- reviewing assumptions underlying the plans
- monitoring projected status of plans.

Internal controls over LICs are important to promote accountability, prevent fraud and deliver infrastructure to the required standard at the best possible price. If financial controls are weak or are not implemented well, there is a risk that LICs are misspent or that councils pay too much for infrastructure.

Not all councils' internal controls adequately addressed risks associated with the administration of LICs

The audit examined a number of internal controls that manage risks related to LICs. These included:

financial controls over receipt and expenditure of LIC funds
management of conflicts-of-interest when dealing with developers
independent valuations of works-in-kind and dedicated land
ensuring delivery and quality of works-in-kind, and obtaining security from developers in the event of non-delivery or poor quality work
management of variations to VPAs and works-in-kind agreements.

We reviewed controls included in policies and procedures and then checked samples of work to ensure that controls were implemented. We found variation in the controls that councils implemented, and some weaknesses in controls. It is a matter for each council to assess their financial risk and develop internal controls that support the collection, management, and expenditure of LICs. However, councils must be able to assure their communities and developers that they are doing everything possible to collect all LICs owing and that work conducted by developers in lieu of cash payments is properly valued and carried out to the required standard.

Further information about audit findings in relation to internal controls for each council are included in chapters five to eight. The exhibit below demonstrates variation in several controls implemented in the audited councils.

In a 2018 report, the Independent Commission Against Corruption noted that 'the appetite for transparency is expanding in both the public and private sectors'.

The Practice Note and S64 Guidance refer to transparency, including the importance of transparency over:

calculation and apportionment of LICs
funding of infrastructure, including where and when infrastructure is delivered
arrangements made with developers through VPAs.

The LIC system is largely transparent for community members who know where to look

Contributions plans and DSPs are public documents, exhibited to the public before being adopted by council. Councils included in the audit publish their contributions plans and DSPs on their websites and meet statutory requirements with regard to reporting and accessibility of information.

However, other public information relating to the LIC system is fragmented across different websites and reports and varies in detail across councils.

Exhibit 10: Published information about LICs at the four audited councils
	Blacktown City Council	Central Coast Council	City of Sydney Council	Liverpool City Council
Financial details about contributions collected and spent	Financial statements	Financial statements	Financial statements	Financial statements
Implementation plans for spending LICs	Contribution plans	S64 implementation plans in DSPs. S7.11 & S7.12 implementation plans developed annually within capital works plan	Contribution plans	Developed annually within capital works plan
Capital works underway or completed, funded by LICs	Capital works plan and annual report	Not published	Not published	Capital works plan

Source: Audit Office analysis.

The Practice Note states that councils are accountable for providing the infrastructure for which contributions are collected. Demonstrating that infrastructure has been provided is difficult with fragmented information. As an example of transparent reporting, Blacktown City Council's 2018–19 annual report includes information about infrastructure that has been delivered for every contributions plan, providing transparency over how LICs have been spent.

Use of LICs collected under VPAs is not always transparent

Contributions collected under VPAs are not required to demonstrate the same relationship to a development as LICs collected under section 7.11 of the EP&A Act. VPAs are often negotiated because a developer requests a change to a planning instrument, and it is important that these arrangements, and their outcomes, are transparent to the community.

The EP&A Regulation includes mechanisms to ensure that VPAs are partially transparent. VPAs are exhibited to the public and approved by the elected council. Councils must maintain a VPA Register and make the VPA Deeds of Agreement available on request. However, there is no obligation on council to report on the outcomes or delivery of developers' obligations under VPAs. The four audited councils vary in transparency and accessibility of information available about VPAs.

Exhibit 11: Published information about VPAs at the four audited councils
	Blacktown City Council	Central Coast Council	City of Sydney Council	Liverpool City Council
VPA Register	Council website and annual report	Annual report	Annual report	Council website and annual report
VPA Deeds of Agreement	Council website	Available on request	Available on request	Council website
Intended use of LICs collected under VPAs	In Deeds of Agreement	In Deeds of Agreement	In VPA Register and most Deeds of Agreement	In VPA Register and most Deeds of Agreement
Completion of work funded by cash collected under VPAs	Not published	Not published	Not published	Not published
Delivery of works-in-kind or land negotiated under VPAs	Not published	Not published	In VPA Register	Not published

Source: Audit Office analysis.

The Practice Note suggests that councils incorporate the intended use of LICs collected under VPAs in the Deed of Agreement, but there is no guidance relating to transparency over where and when funds have actually been spent. There is merit in councils providing greater transparency over public benefits delivered through VPAs to give communities confidence in VPAs as a planning tool.

Credit arrangements with developers are not always well documented or monitored

When levying LICs, section 7.11(6) of the EP&A Act requires councils to take into account land, money, or works-in-kind that the developer has contributed on other development sites over and above their LIC obligations. This section of the EP&A Act allows a developer to offset a LIC owed on one site against land or works contributed on another. This leads to some developers carrying 'credits' for work delivered to councils, to be paid back by reduced LICs on a future development. Blacktown City Council and Central Coast Council allow developers to carry credits. Liverpool City Council and City of Sydney Council do not permit credits and instead pay the developers for any additional work undertaken.

Councils should formally document credit arrangements and have a robust process to validate and keep track of credit balances and report on them. Central Coast Council does not keep good track of credit arrangements and neither Blacktown City Council or Central Coast Council aggregate or report on outstanding credit balances.

Blacktown City Council manages the largest LIC fund in NSW and negotiates more VPAs than any other council. Overall, Blacktown City Council demonstrates effective governance over the LIC funds but there is scope for improved oversight of the projected financial status of contributions plans and credit arrangements with developers. Blacktown City Council also needs to update its operating procedures relating to LICs and improve security over key information.

Blacktown City Council is managing areas with high growth. There is a risk that Blacktown City Council will be unable to collect sufficient LICs to fund the infrastructure required to support that growth. However, Blacktown City Council does not assess and report to senior management or its Audit, Risk and Improvement Committee about the projected financial status of contributions plans.

Blacktown City Council has policies in place to guide the management of LICs although management of credit arrangements with developers requires greater oversight. Policies relating to works-in-kind agreements provide no guidance about probity in negotiations with developers and valuations of works-in-kind are not independent as they are paid for by the developer. Blacktown City Council's S7.11 committee structure could act as a model for other councils. Blacktown City Council is spending LICs according to its contributions plans. Staff managing LICs demonstrate good knowledge of the regulatory environment. However, a number of administrative processes need attention such as outdated procedures, lack of security over key spreadsheets, and inappropriate retention of sensitive personal data.

Recommendations

By December 2020, Blacktown City Council should:

regularly report to senior management on the projected financial status of contributions plans
update council's works-in-kind policy to address probity risks during negotiations with developers
mitigate risks associated with lack of independence in valuations of works-in-kind
improve public reporting about expenditure of cash collected under VPAs
improve management oversight of credit arrangements with developers
update procedures for managing LICs
implement security measures over critical or personal information and spreadsheets.

Central Coast Council's governance and internal controls over LICs were not fully effective. Between 2001 and 2019, more than $13.0 million in LICs was misspent on administration costs in breach of the EP&A Act. There is scope for improved oversight of the projected financial status of contributions plans and credit arrangements with developers. Policies and procedures from the two former councils are not aligned.

In May 2016, the newly amalgamated Central Coast Council inherited 53 contributions plans from the former Gosford City and Wyong Shire Councils. Managing this number of contributions plans fragments the available funds and increases complexity. Central Coast Council is currently working on consolidating these plans. Between June 2016 and June 2019, its LIC balance doubled from $90.0 million to $196 million. Central Coast Council does not assess and report to senior management or its Audit, Risk and Improvement Committee about the projected financial status of contributions plans. Central Coast Council has a LIC committee but it has no formal charter and senior officers do not regularly attend meetings. This limits the committee's effectiveness as a decision-making body. A draft policy relating to works-in-kind agreements provide no guidance about probity in negotiations with developers. Valuations of works-in-kind and land dedications are not independent as they are paid for by the developer.

Central Coast Council has adjusted its accounts in 2018–19 by $13.2 million to repay the LIC fund for administration expenses that were not provided for in 40 contributions plans.

Recommendations

By June 2020, Central Coast Council should:

1. obtain independent validation of the adjustment made to the restricted asset accounts and general fund to repay LICs spent on administration, and adjustments made to each infrastructure category within the contributions plans

2. publish current contributions plans from the former Gosford City Council on the Central Coast Council website.

By December 2020, Central Coast Council should:

3. regularly report to senior management on the projected financial status of contributions plans

4. increase transparency of information available to the public about LIC works planned and underway, including intended use of contributions collected under VPAs

5. consolidate existing plans, ensuring the new contributions plans includes a regular review cycle

6. develop a formal charter for the developer contributions committee and increase the seniority of membership

7. complete and adopt council's works-in-kind policy currently under development, ensuring it addresses probity risks during negotiations with developers

8. mitigate risks associated with lack of independence in valuations of works-in-kind and dedicated land

9. improve public reporting about expenditure of cash collected under VPAs

10. improve management oversight of credit arrangements with developers

11. implement security measures to ensure the integrity of key spreadsheets used to manage LICs

12. align policies and procedures relating to LICs across the amalgamated council including developing policies and procedures for the management of S64 LICs

13. update council's VPA policy to address increased or indexed bank guarantees to accommodate cost increases.

City of Sydney Council manages a complex development environment across the Sydney CBD and inner suburbs. Overall, governance and internal controls over LICs are effective although there is scope for improved oversight of the projected financial status of contributions plans.

City of Sydney Council maintains a large balance of LICs, although not excessive relative to the annual level of LIC expenditure. Unspent contributions are largely associated with open space infrastructure that cannot be delivered until suitable land is available. Thirty per cent of cash contributions are collected under VPAs and there is limited transparency over how these funds are spent. City of Sydney Council does not assess and report to management or its Audit, Risk and Compliance Committee about the projected financial status of contributions plans.

In 2017–18 and 2018–19, LICs were spent in accordance with the corresponding contributions plans. City of Sydney Council staff are knowledgeable about the regulatory environment and are supported by up-to-date policies and procedures.

Recommendations

By December 2020, City of Sydney Council should:

regularly report to senior management on the projected financial status of contributions plans
improve public reporting about expenditure of cash collected under VPAs
periodically review the risk of unpaid LICs associated with complying development certificates and assess whether additional controls are required
implement security measures to ensure the integrity of key spreadsheets used to manage LICs.

During the audit period 2017–18 and 2018–19, Liverpool City Council did not have effective governance and internal controls over LICs. Liverpool City Council is addressing deficiencies and risks identified through an internal audit published in December 2018 although further work is required. There is scope for improved oversight of the projected financial status of contributions plans.

In the two years to 30 June 2019, the balance of unspent LICs increased by more than 60 per cent against a relatively low pattern of expenditure. Prior to an internal audit completed in late 2018, there was no regular reporting on the status of LICs and a lack of transparency when prioritising the expenditure of LIC funds. During 2019, and following the internal audit, Liverpool City Council engaged additional skilled resources to improve focus and accountability for LICs. A LIC committee has been established to manage contributions plans and support business units to initiate relevant infrastructure projects, although it is too early to assess whether this committee is operating effectively. From February 2019, Liverpool City Council commenced monthly reporting to its Chief Executive Officer (CEO) about the point-in-time status of LIC funds, and to its Audit, Risk and Improvement Committee about risks associated with LICs and the implementation of internal audit recommendations. There is limited reporting to senior management about the projected financial status of some contributions plans. Our audit found no evidence of misuse of funds during the audited period. Methods for valuing work and land are not aligned with policies and procedures and are implemented inconsistently. In addition, valuations of works-in-kind and land dedications are not independent as they are paid for by the developer. The policy relating to works-in-kind provides no guidance about managing probity risks when negotiating with developers.

Recommendations

By December 2020, Liverpool City Council should:

regularly report to senior management on the projected financial status of contributions plans
update council's policies and procedures to provide consistent guidance about how works and land offered by developers should be valued
update council's Works-in-Kind and Land Acquisition Policy to address probity risks during negotiations with developers
improve public reporting about expenditure of cash collected under VPAs
mitigate risks associated with lack of independence in valuations of works-in-kind and dedicated land
implement security measures over critical or private information.

Appendix one – Responses from councils and the Department of Planning, Industry and Environment

Appendix two – Advice from the Crown Solicitor

Appendix one – Responses from agencies

Copyright notice

Parliamentary reference - Report number #339 - released 17 August 2020

23 June 2020

Published

Water conservation in Greater Sydney

Environment

Industry

Infrastructure

Internal controls and governance

Management and administration

Regulation

Risk

This report examines whether the Department of Planning, Industry and Environment, and Sydney Water have effectively progressed water conservation initiatives in Greater Sydney.

The report found that the department and Sydney Water have not effectively investigated, implemented or supported water conservation initiatives in Greater Sydney. The agencies have not met key requirements of the current Metropolitan Water Plan and Sydney Water has not met all its operating licence requirements for water conservation. There has been little policy or regulatory reform, little focus on identifying new options and investments, and limited planning and implementation of water conservation initiatives.

As a result, Greater Sydney's water supply may be less resilient to population growth and climate variability, including drought.

The Metropolitan Water Plan states that water conservation, including recycling water, makes the drinking water supply go further. The plan also states that increasing water conservation efforts may be cheaper than building new large-scale supply options and can delay the timing of investment in new supply infrastructure.

The Auditor-General recommends the department develop a clear policy and regulatory position on water conservation options, improve governance and funding for water conservation, and work with Sydney Water to assess the viability of water conservation initiatives. The report also recommends improvements to Sydney Water’s planning for and reporting on water conservation, including the transparency of this information.

This report is part of a multi-volume series on the theme of water. Refer to ‘Support for regional town water infrastructure’ and ‘Water management and regulation – undertaking in 2020-21’.

Read full report (PDF)

The current, 2017 Metropolitan Water Plan states that water conservation, including recycling water, makes the drinking water supply go further. The plan also states that increasing water conservation efforts may be cheaper than building new large-scale supply options and can delay the timing of investment in new supply infrastructure.

Water conservation refers to water recycling, leakage management and programs to enhance water efficiency. Water recycling refers to both harvesting stormwater for beneficial use and reusing wastewater.

This audit examined whether water conservation initiatives for the Greater Sydney Metropolitan area are effectively investigated, implemented and supported. We audited the Department of Planning, Industry and Environment (the Department) and the Sydney Water Corporation (Sydney Water), with a focus on activities since 2016.

The Department is responsible for the integrated and sustainable management of the state’s water resources under the Water Management Act 2000, which includes encouraging ‘best practice in the management and use of water’ as an objective. The Department is also responsible for strategic water policy and planning for Greater Sydney, including implementing the Metropolitan Water Plan.

Sydney Water is a state-owned corporation and the supplier of water, wastewater, recycled water and some stormwater services to more than five million people in Greater Sydney. It is regulated by an operating licence that is issued by the Governor on the recommendation of the Independent Pricing and Regulatory Tribunal (IPART). The Tribunal determines Sydney Water’s maximum prices, reviews its operating licence and monitors compliance. Sydney Water's operating licence and reporting manual set out requirements for its planning, implementing and reporting of water conservation.

From 2007 to 2012, the Climate Change Fund was a source of funds for water conservation activities to be undertaken by the Department and Sydney Water. The Climate Change Fund was established under the Energy and Utilities Administration Act 1987. Four of its six objectives relate to water savings. Water distributors such as Sydney Water can be issued with orders to contribute funds for water-related programs. The Fund is administered by the Department.

In 2016, Sydney Water developed a method for determining whether and how much to invest in water conservation. Known as the ‘Economic Level of Water Conservation’ (ELWC), the method identifies whether it costs less to implement a water conservation initiative than the value of the water saved, in which case the initiative should be implemented.

Conclusion

The Department and Sydney Water have not effectively investigated, implemented or supported water conservation initiatives in Greater Sydney.

The agencies have not met key requirements of the Metropolitan Water Plan and Sydney Water has not met all its operating licence requirements for water conservation. There has been little policy or regulatory reform, little focus on identifying new options and investments, and limited planning and implementation of water conservation initiatives.

As a result, Greater Sydney's water supply may be less resilient to population growth and climate variability, including drought.

The Department has not undertaken an annual assessment of Sydney Water’s level of investment in water conservation against water security risks and the capacity to respond when drought conditions return, as required by the Metropolitan Water Plan. It did not complete identified research and planning activities to support the plan, such as developing and using a framework for assessing the potential for water conservation initiatives for Greater Sydney, and developing a long-term strategy for water conservation and water recycling. It also did not finalise a monitoring, evaluation, reporting and improvement strategy to support the plan.

Sydney Water has been ineffective in driving water conservation initiatives, delivering detailed planning and resourcing for ongoing initiatives, and in increasing its investment in water conservation during drought. These were requirements of the Metropolitan Water Plan. Sydney Water's reporting on water conservation has not met all its operating licence requirements and lacked transparency with limited information on key aspects such as planning for leakage management, how the viability of potential initiatives were assessed, and how adopted initiatives are tracking.

The Department and Sydney Water did not put in place sufficient governance arrangements, including clarifying and agreeing responsibilities for key water conservation planning, delivery and reporting activities. There has also been limited collaboration, capacity building and community engagement to support water conservation, particularly outside times of drought.

Appendix two – About the audit

Appendix three – Glossary