About this report

Results and key themes from our audits of the state agencies’ financial statements for the year ended 30 June 2024.

It also includes observations on the following areas of focus:

• risk management
• capital projects
• shared service arrangements.

Findings

The Treasurer did not table the audited Total State Sector Accounts (TSSA) in Parliament as required by the Government Sector Finance Act 2018, and Responsible Ministers did not table 16 annual reports in Parliament by the required date.

Audit results

Unqualified opinions were issued for all but one agency.  The quality of financial statements submitted for audit improved, with reported misstatements down to a gross value of $3.9 billion in 2023–24, compared to $10.8 billion in 2022–23.

Key themes

Errors in accounting for assets led to financial statements adjustments of $1.4 billion. 

Our audits identified deficiencies in key controls across financial management, payroll, contract management and procurement.

Risk management

Risk management maturity is low across most agencies. Some of the largest 40 agencies self-assess their risk maturity as requiring improvement.

Capital projects

There is a lack of transparency in the NSW budget papers relating to significant capital projects. The estimated total costs for some major projects are not published as the amounts are considered commercially sensitive. The budget papers do not provide a complete and accurate reflection of the actual costs of large infrastructure projects.

Shared service arrangements

Three of the five agencies that provide shared services to 108 customer agencies did not obtain independent assurance over the effectiveness of their control environment. 

Recommendations

The report makes recommendations to agencies to improve controls and processes in relation to:

• financial reporting
• financial management
• risk management
• shared service arrangements
• capital projects.

Financial reporting is an important element of good governance. Confidence in, and transparency of, public sector decision making is enhanced when financial reporting is accurate and timely.

This chapter outlines our audit observations relating to the financial reporting of State Government agencies.

Appropriate financial controls help ensure the efficient and effective use of resources and administration of agency policies. They are also essential for quality and timely decision making.

This chapter outlines observations and insights from our audits of financial statements of the 40 largest agencies in the State sector. These agencies are listed in Appendix 3.

This chapter outlines audit observations, conclusions and recommendations from our review of agencies’ risk maturity, assessment processes, governance, systems and culture across the 40 largest agencies in the state sector. These agencies are listed in Appendix 3.

This chapter outlines observations, conclusions and recommendations from our review of the 15 most significant capital projects in the State.

Shared service arrangements can centralise corporate services functions such as finance, human resources, procurement and information technology (IT). Across NSW Government agencies, many business processes and IT functions are provided on a shared services model, that is, one agency operates a business function or IT platform that is used by other agencies rather than each agency maintaining their own. These services are shared by several agencies (‘customers’), but generally are operated and managed by one agency or department (‘provider’).

This chapter outlines audit observations, conclusions and recommendations from our review of shared service arrangements provided and received by the 40 largest agencies in the state sector. These agencies are listed in Appendix 3.

This report outlines the findings on shared service arrangements.

Appendix 1 – Status of audits of consolidated entities

Appendix 2 – Status of audits of non-consolidated entities

Appendix 3 – Forty largest State agencies contents

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

Click here for the Easy English version of the report snapshot

The Easy English version is intended to meet the needs of some people with lower literacy skills, some people with an intellectual disability, and some people from different cultural backgrounds.

The Easy English document is not the final audit report that has been prepared and tabled in NSW Parliament under s.38EB and s.38EC of the Government Sector Audit Act 1983. It should not be relied on or quoted from as the final audit report.

About this report

Australian and state legislation protects the right of students with disability to a quality education, free from discrimination. These require that students with disability be supported to access and participate in education on the same basis as their peers without disability.

This audit assessed whether the NSW Department of Education is effectively supporting students with disability in NSW public schools.

Findings

The Department has effectively designed approaches and developed reforms under its 2019 Disability Strategy and related measures.

But it still hasn’t resolved longstanding issues with funding, access to targeted supports, monitoring school practice and tracking outcomes for students with disability.

This is despite the Department being made aware of these performance gaps for almost two decades across multiple audits, parliamentary inquiries and the recent national Disability Royal Commission.

Recommendations

The report makes five recommendations to address these gaps, including that the Department should:

• annually monitor the experiences and outcomes of students with disability to be able to identify and address emerging issues, and promote good practice
• reform funding to be better aligned to student needs
• enhance guidance and support to schools and families on making reasonable adjustments for students with disability.

Background

Australian legislation protects the right of students with disability to a quality education, free from discrimination, and describes the obligations of education providers to these students.

Under the federal Disability Discrimination Act 1992 (Cth) and related legislated Disability Standards for Education 2005 (the Disability Standards), education providers have legal responsibilities to make education and training accessible to students with disability, including in enrolment, participation, curriculum and support services. This is to be done through providing ‘reasonable adjustments’ or measures and actions that assist students with disability to access education on the same basis as students without disability.

The NSW Department of Education (the Department) is responsible for supporting students with disability in NSW public schools. The Department and schools provide a range of adjustments and targeted supports, in consultation with the student and/or their parents/guardians. In 2023, approximately 206,000 children or young people in NSW public schools (around one-quarter of all public school students) had disability and received adjustments in NSW.

The state Education Act 1990, Disability Inclusion Act 2014 and Anti-Discrimination Act 1977 also protect the right of students with disability in NSW to a quality, accessible education free from discrimination. For public schools in NSW, legislative obligations are articulated in key policy and practice documents including the Inclusive Education Statement and Policy, NSW Wellbeing Framework for Schools, and Achieving School Excellence in Wellbeing and Inclusion tool and associated resources.

A number of key reviews conducted over the last two decades have considered the experiences of students with disability and the effectiveness of school and departmental practices in meeting their needs. In 2017, a NSW Parliamentary inquiry found that while there were many instances of excellence, the inclusive approach to education provision promoted in legislation and policy was not the reality experienced by many students with disability in NSW schools at that time. In response, the Department released its Disability Strategy in 2019 with a commitment to building a more inclusive education system in which all children thrive academically, physically, emotionally, and mentally. The strategy focused on four key reform areas:

• investing in teachers and other support staff
• developing new resource models and support to meet individual student needs
• streamlining processes and improving communication and access to information
• building an evidence base to measure progress.

Audit Objective

This audit assessed whether the Department of Education is effectively supporting students with disability in NSW public schools. It reviews relevant evidence relating to the six calendar years 2018–2023, guided by the following questions:

1. Has the Department designed and delivered approaches that effectively support students with disability?
2. Is the Department addressing the needs of students with disability?

Conclusion

The Department of Education has effectively designed approaches and developed reforms aimed at improving the support provided to students with disability. However, key initiatives that target longstanding and well-known issues have not been implemented in a timely way, limiting the effectiveness of the Department’s support for students with disability in NSW public schools.

The Department, in its 2019 Disability Strategy, committed to building a more inclusive education system, ‘one where all students feel welcomed and are learning to their fullest capacity’. Under the strategy the Department commenced new initiatives and strengthened existing ones to modify school funding, improve teacher skills and resources, enhance accessible school infrastructure, and increase engagement with students and families.

However, key initiatives have been in place for less than eighteen months, and some remain outstanding. The Department’s efforts have not resolved longstanding issues including unmet demand for targeted supports, gaps in professional learning and practice guidance for school staff, and inconsistent central monitoring of school practice and outcomes data. This is despite the Department being made aware of these issues for almost two decades across multiple audits, parliamentary inquiries and the recent national Disability Royal Commission.

Since 2018 the proportion of NSW public school students with disability has grown from one-fifth to one-quarter. While the Department is making efforts across a range of disability reform areas, many students, families and schools continue to feel they have not been adequately supported.

The Department does not know how effectively it is meeting the needs of students with disability because it has not consistently monitored outcomes for students with disability or schools’ inclusive education practices. Our own analysis of the Department’s data shows that there has been improvement in some student learning outcomes, but deterioration in some measures of student wellbeing.

Key findings

The Department effectively designed its Disability Strategy based on evidence and broad stakeholder input, and provides a range of supports to schools for students with disability

The Department defines an inclusive education system as one where all students feel welcomed and are learning to their fullest capacity. Under the 2019 Disability Strategy it committed to building this, and put in place a variety of measures to support schools in meeting the needs of students with disability.

In designing the strategy, the Department responded to the recommendations from the 2017 Parliamentary inquiry, and undertook a literature review analysis of evidence-based practices and personalised learning approaches. The Department also consulted widely, including with schools, experts and people with disability.

The Department introduced 15 new initiatives, and strengthened a similar number of existing ones, to better support students with disability in NSW public schools. These included initiatives aimed at:

• reforming the basis for relevant funding to better reflect student need
• increasing the provision of inclusive education courses in tertiary education and professional learning, and teaching resources for educators and school staff
• increasing access to allied health and school counsellor/psychologist services
• creating more inclusive learning spaces in school infrastructure
• improving communication to, and exploring ways to obtain better feedback from, students and parents/guardians.

The Department has established governance arrangements focused on inclusive education, and provides professional development and teaching resources for schools. Some specialist central staff roles are funded in regional teams and in schools across the state to advise schools in making reasonable adjustments for individual students with disability. The Department provides disability-specific funding on top of base school allocations, and funds infrastructure integration works in response to individual student needs for accessible school grounds. A full list of initiatives and supports for students with disability in NSW public schools is at Appendix two.

The Department’s efforts to reform support for students with disability have not been timely

Performance gaps in Department and school supports for students with disability have been repeatedly identified through public reviews over the last two decades. This includes unmet demand for targeted supports, gaps in professional learning and practice guidance for school staff, and inconsistent central monitoring of school practice and outcomes data. The 2017 Parliamentary inquiry, which the 2019 Disability Strategy responded to, found many of the same issues that were identified in our 2006 audit Educating Primary School Students with Disabilities conducted eleven years earlier. These concerns were also highlighted in a 2010 NSW Parliamentary inquiry and in five-yearly reviews of the federal Disability Standards. The Disability Strategy initiatives came thirteen years after many of the same risks were identified in our 2006 audit. Had these been implemented sooner, an entire cohort of students with disability who completed primary and secondary education in that time may have had a different schooling experience.

While the Department has delivered almost all the Disability Strategy initiatives since it commenced in 2019, the few that are outstanding are fundamental to determining the success of the Disability Strategy:

• reforming all streams of disability funding to be based on student needs, so that schools have more resources, and those resources will be more flexible
• consistently tracking outcomes for students with disability, families and teachers to understand what is changing in their lived experiences of education.

The Department did not examine whether actions in the Strategy were addressing the intent of previous recommendations

The reform areas and initiatives in the Disability Strategy reflected evidence from previous reviews, as well as contemporary research literature and broad stakeholder consultation. Stakeholders we heard from - including academics, advocates and peak bodies - broadly agreed that the strategy addressed the right areas for action.

The strategy reform initiatives targeted areas that had been repeatedly identified as issues in previous public inquiries held over the past twenty years including: insufficient funding, workforce constraints, gaps in professional learning, inadequate outcomes tracking, and limited engagement with students and families.

While the Department advised that it has implemented the accepted recommendations from previous reviews into disability support and inclusive education, the Department’s approach to tracking recommendations does not include assessing whether the action taken has met the intent of the relevant recommendation. Without this, there is a risk that previously identified gaps and performance issues are not addressed and persist or recur in the future.

While the Department’s governance arrangements were suitable for the design and implementation of the Disability Strategy, the Department did not consider why areas that had been repeatedly identified were still not resolved. This audit found that students, families and schools continue to feel the impact of issues that the recommendations from past reviews aimed to improve, raising questions about the accountability for, and effectiveness of, the Department’s responses.

The Department does not know how effectively it is meeting the needs of students with disability

Schools are legally required to provide individualised supports to students with disability where these are needed for students with disability to be able to access and participate in education on the same basis as their peers without disability. The Department captures schools’ data on the reasonable adjustments they are making for students with disability through the annual Nationally Consistent Collection of Data on students with disability (NCCD).

Where students with disability receive targeted supports such as placement in a support class or specific school funding to learn effectively in a mainstream class, schools are also required to annually review student needs in consultation with the student, their families and teachers, and respond to any changes.

The Department provides schools with guidance and specialist staff to support making reasonable adjustments for students with disability to access and participate in education on the same basis as their peers. However, the Department does not independently verify school evidence on adjustments made and does not have visibility of where reasonable adjustments provided are not meeting students’ needs (for example, where targeted supports are not available) unless a complaint is made or escalated to the Department.

Stakeholders we heard from – both from schools and families – said that there can still be conflicting views about what reasonable adjustments are required in particular situations, and that information provided is vague. The Department has accepted the recommendations of previous reviews and the Disability Royal Commission to improve its guidance and resources for schools and families about reasonable adjustments.

The Department also has a legislative and policy obligation to understand and address the particular needs and potential barriers to accessing supports that may be experienced by students with disability who also have other identities or characteristics such as being Aboriginal, living in rural or remote areas, socioeconomic disadvantage, or speaking English as an additional language or dialect (also known as intersectionality).

While the Department has taken some steps to consider intersectionality for students with disability in its policies and resources, it has not reduced the impacts where these create compounding factors of disadvantage. The Department was unable to demonstrate that it was meeting the needs of these students.

The Department’s criteria for accessing targeted supports for disability has not been updated in over 20 years

If a student with disability has moderate to high needs and requires specialist support that cannot be met with existing school funding and staffing resources, their school may apply to the Department for targeted supports through the ‘access request’ process. Applications are decided by a panel of regional departmental staff including learning and wellbeing staff; primary, high school and Schools for Specific Purposes principal representatives; and a senior education psychologist.

Access to almost all targeted supports is limited to eligible students with disability who have a confirmed medical diagnosis that falls within the Department’s 2003 disability criteria. These criteria exclude those students with undiagnosed disability or with diagnosed disabilities that fall outside the Department’s criteria, such as attention-deficit/hyperactivity disorder (ADHD) and dyslexia.

Despite limitations with the current criteria being highlighted in multiple parliamentary inquiries over the past 13 years, the Department has not updated these criteria since 2003. It advises that updated criteria will be released from term four, 2024.

The Department does not have a clear and accurate picture of demand compared to supply, or the time taken for targeted supports to be provided to students

The Department tracks if applications for targeted supports have been supported, deferred, declined or withdrawn through the access request panel process. However, the rationale for why an application has been deferred or declined is not consistently recorded in the system.

The Department does not maintain waiting lists for students deemed eligible for targeted supports where the support is not available. In particular, for support classes, while the Department has centralised statewide oversight of class numbers and locations to inform decisions about establishing new classes each year, it does not have a clear picture of demand at local geographic levels at any point in time.

Although recommended in our 2006 audit, the Department still does not monitor the time taken for targeted supports to be provided to eligible students after an application has been approved for provision, so cannot tell how long students with identified needs are waiting for supports to reach them.

The Department has not consistently monitored outcomes for students with disability

The Department started to develop a framework to measure the outcomes of students with disability, at a system level, in 2019. These include wellbeing, independence and learning growth outcomes, informed by measures including students’ perceptions, supports provided, educators’ understanding and skills, and satisfaction of parents/guardians. The framework is comprehensive and evidence-based, and includes existing datasets to minimise the administrative burden on schools. The Department tested proposed measures to validate their reliability.

While there are many complexities in comparing progress and experiences across all students with disability due to the diversity across this cohort, and a range of data limitations that needed to be addressed, the implementation of this framework was not timely. Although the domains, outcomes and metrics for the disability outcomes framework were endorsed by the Department executive in 2022, the framework was still not fully operational in September 2024. Since executive endorsement, the Department has updated the framework to reflect the final accepted recommendations of the Disability Royal Commission and to ensure alignment with the NSW Government’s 2023-2027 Plan for Public Education. It advises that it has started to implement the framework in a staged approach.

The Department has the ability to link data which identifies students with disability with a variety of its other datasets, such as student attendance, suspensions and expulsions, participation and results in the National Assessment Program – Literacy and Numeracy (NAPLAN) and the Higher School Certificate (HSC). The Department uses these linked datasets to inform the development of statewide policy and guidance on practice in schools periodically. However, it is not using the datasets to regularly monitor school practice, identify and address emerging issues, or identify and promote ‘what works’ to support students with disability.

The Department’s School Excellence Framework involves schools self-assessing and peer-reviewing their performance in learning, teaching and leading at least once every five years, but this has not had a specific focus on inclusive education to date. A policy monitoring process involves schools reporting on their compliance with specific policies annually, but this did not include the Disability Standards until 2024. Schools provide some information in their public annual reports about their disability funding expenditure, but this reporting is not outcomes-focused.

The Department runs annual surveys of students, parents/guardians and teachers called ‘Tell Them From Me’. This survey gives students with disability and their families a direct voice to schools and the Department, although the survey is voluntary and not accessible for some students with complex learning and communication needs (the Department is developing a suite of accessible tools to be able to seek feedback from these students in the future). However, the Department does not regularly analyse the Tell Them From Me survey response data to understand whether the experiences of students with disability or their families are changing since the Disability Strategy and related efforts.

Complaints are another way by which the Department can obtain insight into school practice and student outcomes. However, the Department does not have oversight of the number, type or trends in complaints that arise and are resolved at the school level, including those concerning students with disability.

The Department was aware from the 2017 Parliamentary inquiry and the Disability Royal Commission that students with disability and their families can be reluctant to make complaints to their principal about their school, perceiving a conflict of interest and risk of negative consequences. However, the Department was not seeking feedback from complainants about the resolution of their complaint when these were made at the school level, or from students with disability and their families more broadly (in the absence of complaints). The Department advises that it is taking steps in 2024 to seek and address feedback from parents/guardians on their experience in raising concerns at the school level.

The Department has not tracked the impact of the Disability Strategy on the experiences of students, families and schools

Although the Disability Strategy outlined a vision for inclusive education and success measures that sought changed experiences of students, families and teachers, the Department did not establish a time horizon by which the strategy vision and success measures were expected to be realised, nor baseline information against which change could be assessed.

While it evaluated some individual initiatives under the strategy, it did not have an evaluation framework in place for the strategy as a whole and has not assessed how the experiences of students, families and schools have or haven’t changed as a result of the implementation of the Disability Strategy overall.

The Department has taken steps to reform the distribution of disability funding, but this was not timely, and evidence on whether resourcing is adequate to meet the needs of students with disability remains unclear

The Department has publicly acknowledged that ‘effectively resourcing schools is crucial to building an inclusive education system and improving outcomes for, and experiences of, students with disability.’

Stakeholders to this audit – including parents/guardians, school staff and advocacy organisations – consistently said that existing funding to support students with disability is not sufficient to meet their learning needs. Most of the previous public reviews also identified inadequate funding as a key challenge to providing inclusive education.

The Department allocated annual disability-specific funding to NSW public schools totalling approximately $1.1 billion in 2018 rising to $1.9 billion in 2023. This represents an annual average cost above the base allocations of $7,300 per student with disability in 2018 and $9,300 in 2023.

The Department commenced a program of work in 2020 to review and reform the disability-specific funding provided to schools. This sought to change the distribution of funding so that resourcing is linked to a student’s functional needs at school and reflects a school’s efforts to support a student with disability relative to these needs, rather than relying on students’ medical diagnoses or academic performance.

During the audit review period the Department:

• forecasted future funding needs
• revised the funding model for the disability equity loading allocated to mainstream schools to use towards all their students with disability who need supports, regardless of diagnoses – the Department estimated this would more than double the number of students who could be supported by this funding
• provided supplementary funding to Schools for Specific Purposes for 2020–2024, and
• sought government approval and resourcing to change the thresholds for targeted funding support for individual students with disability who have moderate to high learning needs in mainstream classrooms (not yet implemented).

While the Department made important advances in funding reforms, these efforts were not timely, coming around a decade after being recommended by the 2010 Parliamentary inquiry.

Nationally, evidence on the costs to schools to make adjustments to support students with disability is not clear. A 2019 federal review into the Australian Government disability loading for states and territories concluded that there was significant variation in these cost estimates and recommended that joint work be undertaken by the Australian, state and territory governments to produce more nuanced estimates.

In late 2023, the Disability Royal Commission made several recommendations to review disability funding and transparency in the education sector, which the Australian Government and state and territory governments jointly accepted in principle in July 2024.

The Department’s data shows mixed results for students with disability

Our analysis of the Department’s data showed that there had been some improvements for students with disability in the time of the Disability Strategy. This includes an overall reduction in the number of suspensions and expulsions for students with disability, and an increase in the number of students with disability receiving HSC results.

However, there was limited individual student growth in NAPLAN exams over this time, and deterioration in some measures of student wellbeing relating to self-reports of a sense of belonging and experiences of bullying at school. Aboriginal students with disability were worse off than their non-Aboriginal peers with disability in relation to suspension, expulsion, individual student growth and reported experiences of bullying.

Recommendations

By January 2026, the Department of Education should:

1. At least annually, monitor the experiences and outcomes of students with disability to:
   1. identify and address emerging issues
   2. identify and promote good practice
   3. take effective steps where there is a need to improve longer-term student outcomes, and
   4. consider the impacts of intersectionality.
2. Continue to expand the use of NCCD data to support funding allocation in accordance with the needs of students with disability.
3. Work with the Australian Government on reviews of the disability loading settings to ensure NSW public schools are adequately funded to support students with disability.
4. Work with stakeholders to enhance guidance and practical support to public schools and families on reasonable adjustments for students with disability, including ways to resolve conflicting views in a timely manner.
5. Improve the planning and delivery of targeted supports by:
   1. obtaining a clear and timely picture of the supply of, and demand for, targeted supports at a local and statewide level to identify and address constraints
   2. monitoring the time taken for targeted supports to be provided to eligible students, and addressing delays so that adequate support is put in place once need is identified
   3. reducing the administrative burden for schools in applying for targeted supports, and
   4. making the basis for decisions transparent to schools and families.

Under the Disability Strategy, the Department released the Inclusive Education Statement to provide direction and guidance on supporting the inclusion of students with disability in NSW public schools (section 3.2 above). The statement expressed a commitment of the Department to ‘building a more inclusive education system… where every student is known, valued and cared for and all students are learning to their fullest capability.’ 

However, as the Department does not consistently monitor outcomes for students with disability or schools’ inclusive education practices (section 3.6 above), it does not have oversight of whether the Inclusive Education Statement is being given effect and achieving desired outcomes for students with disability, parents/guardians and schools. 

Our 2006 audit Educating primary school students with disabilities found that it was not possible to determine whether the performance of ‘special education’ services had improved over time as there had been no mechanism in place to measure results. It recommended that the Department develop a suite of performance indicators to monitor and manage supports for students with disability at a school, region and state level. This is still not being done systematically, and the Department cannot tell whether things are improving for students with disability in NSW. 

Our analysis of the Department’s data shows that over the audit review period 2018-2023 there has been improvement in some measures of school practice such as the use of suspensions and expulsions, and improvement in some student learning outcomes, but deterioration in some measures of student wellbeing. 

Self-reported survey data shows improvements in the experiences of students with disability in primary school but these have worsened for students in secondary school 

Statewide data from the annual Tell Them From Me student survey shows that secondary students with disability are less likely to agree with statements related to receiving support from teachers in 2023 compared to 2018 (47% agreeing in 2018 declining to 44% in 2023). Results for students with disability in primary school to similar survey questions have remained steady with around 70% agreeing that their teacher supports them in both 2018 and 2023. 

A higher proportion of primary school students overall reported that they had never been bullied in 2023 compared to 2018. For students with disability in primary schools, the proportion reporting that they had never been bullied lifted from 66% in 2018 to 69% in 2023, however there was variability across individual years. For primary school students without disability, 75% reported that they had never been bullied in 2018, compared to 76% in 2023. 

The proportion of students with disability in secondary school reporting that they had never been bullied increased from 65% in 2018 to 69% in 2020, but then dropped to 66% in 2023. By comparison, the rate of students without disability reporting that they had never been bulled improved between 2018 and 2020 (from 75% to 78%) but then worsened in 2023 (74%). 

Students with disability in both primary and secondary schools were less likely to agree with questions about having a sense of belonging at school in 2023 compared to 2018. For secondary school students with disability, 49% agreed with questions relevant to belonging in 2018, which dropped to 43% in 2023. In primary schools, where survey results indicate there was a greater sense of belonging amongst all students than in secondary schools, there was also a drop for students with disability from 62% in 2018 to 57% in 2023.

There has been an overall increase in parents/guardians completing the Tell Them From Me parent/guardian survey since 2018. Survey results show that parents/guardians of children with disability are less likely to have their child enrolled at their first choice of public school than parents/guardians of children without disability. The proportion of parents/guardians of children with disability reporting that their child was enrolled at their first choice has slightly worsened between 2019 (when the question was first included in the survey) and 2023, from 87% in 2019 to 85% in 2023. The proportion of parents/guardians of students without disability who said their child was enrolled at their first choice of public school remained steady between 2019 to 2023 at close to 90%. 

There was limited individual student growth in NAPLAN results for the majority of students with disability 

Individual student growth is a measure of the progress of individual students in their NAPLAN results across their educational journey from Year 3 to Year 9. NAPLAN is an annual national assessment for all students in Years 3, 5, 7 and 9. It tests skills in reading, numeracy, writing, spelling and grammar. 

For most of the audit review period, all students participating in NAPLAN were assessed against national minimum standards in each exam as being below, at, or above standards. NAPLAN assessments and reporting changed in 2023, with four proficiency standards replacing the previous 10-band structure and the national minimum standards. For this reason, NAPLAN results from 2023 cannot be compared with those from earlier years. 

Our analysis of the Department’s data found that, for students with disability who participated in a NAPLAN exam more than once between 2018 and 2022: 

• 60% had no change in whether they placed below, at or above the national minimum standards (compared to 83% of students without disability). 
• 11% had an improvement, either moving from below the national minimum standards to be at the standards, or moving from being at to above the standards (compared to 4% of students without disability). 
• 22% had a decline, either moving from being above the national minimum standards to be at the standards, or from being at the standards to being below them (compared to 9% of students without disability). 

Exhibit 23 provides a breakdown of our analysis of student growth for each test type for students with disability between 2018 and 2022.

Appendix one – Response from agency

Appendix two – Relevant initiatives and supports 

Appendix three – NCCD definitions 

Appendix four – The Department’s principles of inclusive education 

Appendix five – Student behaviour management and restrictive practices 

Appendix six – Relevant funding for NSW public schools 

Appendix seven – The Department’s Disability Criteria (2003) 

Appendix eight – About the audit 

Appendix nine – Performance auditing

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

 Parliamentary reference - Report number #400- released 26 September 2024.

If you have questions or feedback about individual matters, you can:

• contact the NSW Department of Education through the website
• make a complaint to the NSW Ombudsman online or by calling 1800 451 524.

Under the Education Act 1990 every child has the right to receive an education. The Act provides that:

• the education of a child is primarily the responsibility of the child’s parents, and
• the state has a duty to ensure every child receives an education of the highest quality, principally through providing public education.

Children of compulsory age are required to be enrolled at, and to attend, a government school or a registered non-government school, or to be registered and receive instruction for home schooling. 

The audit aims to assess whether students who may experience difficulties in receiving an education in a mainstream classroom environment in New South Wales (NSW), or who choose to not be educated in a mainstream classroom environment, have access to a quality education, regardless of their circumstances, when in alternative educational settings.

This audit will assess the effectiveness of the NSW Department of Education and the NSW Education Standards Authority (NESA) in supporting students to receive a quality education when delivered in alternative education settings.

In doing so, the audit will have two criteria to examine whether: 

1. Agencies provide or support alternative education settings for students to ensure continuity of education:
   1. Alternative settings are accessible and available in a timely way to students.
   2. Transitions into and out of alternative settings support continuity of education.
2. Agencies are effectively implementing quality assurance and safeguarding mechanisms for alternative education settings:
   1. Agencies support students to receive a high quality education in alternative settings.
   2. Education programs in alternative settings are appropriate to meet the diverse learning needs of students. 
   3. Agencies ensure that child safe standards and/or child protection protocols are applied as relevant.
   4. The Department monitors outcomes for individual students in alternative settings. NESA checks that home schooled children are receiving instruction.

Included within the audit scope:

•  NSW Department of Education alternative educational settings:
  • distance education
  • schools for specific purposes catering for students with emotional disturbances or behavioural disorders (‘behaviour schools’)
  • schools in Youth Justice NSW detention centres
  • hospital schools
• Agency management of non-government alternative education setting providers, where relevant
• Home schooling in NSW (regulated by NESA).

Excluded from the audit scope:

• policies and practices at non-government schools, early childhood education and outside school hours care services, or vocational education and training services
• schools for specific purposes catering for students with disability (these were considered through a previous audit, Supporting students with disability)
• support classes located in mainstream schools (these were considered through a previous audit, Supporting students with disability)
• suspension centres and tutorial centres
• in-depth student behaviour management policies and practices (these will be the focus of a future audit on the forward work program)
• merits of government policy objectives.

The Audit Office is required by section 38 of the Government Sector Audit Act 1983 to keep information gathered during the course of a performance audit confidential and the Audit Office takes its responsibilities under these sections seriously. 

Exceptions include the Auditor-General’s Report to Parliament – a public document – and where the Audit Office is permitted or required to disclose information under other legislation.

All information that the Audit Office receives, and working papers that the Audit Office creates during an audit, are classed as excluded information in Schedule 2 of the Government Information (Public Sector) Act 2009 (GIPA Act). An access application under the GIPA Act cannot be made for excluded information. 

For more information on our confidentiality obligations, please visit Our confidentiality and reporting obligations for contributions page.

If you have questions or feedback about individual matters, you can: 

• contact the NSW Department of Education through the website 
• contact the NSW Education Standards Authority through the website 
• make a complaint to the NSW Ombudsman online or by calling 1800 451 524.

Schools collect and maintain detailed student data, including sensitive personal information. Schools can also require or encourage students, parents and carers to use third party software applications for learning and other school related activities. This audit will consider how effectively schools ensure student data is secure within their own systems and when provided to third or fourth parties.

What this report is about

Results of the Education portfolio of agencies’ financial statements audits for the year ended 30 June 2023.

What we found

Unqualified audit opinions were issued for all Education portfolio agencies.

An ‘other matter’ paragraph was included in the TAFE Commission’s independent auditor’s report as it did not have a delegation or sub-delegation from the Minister for Education and Early Learning to incur expenditure on grants from other portfolio agencies.

What the key issues were

Comprehensive valuations of buildings at the Department of Education (the department) and at the TAFE Commission found that certain assumptions applied in previous years needed to be updated, resulting in prior period restatements.

The department prepaid a building contractor for early works on a project and some of the prepayment is in legal dispute.

The department duplicated a claim for project funding from Restart NSW in 2021.

New parental leave legislation increased employee liabilities for portfolio agencies. The department and the NSW Education Standards Authority (the Authority) updated their financial statements to record parental leave liabilities.

A high risk matter was raised for the Authority to improve the quality and timeliness of information to support their financial statement close process.

What we recommended

Portfolio agencies should ensure any changes to employee entitlements are assessed for their potential financial statements impact under the relevant Australian Accounting Standards.

The department should:

• improve processes to ensure project claims are not duplicated
• assess the risks associated with providing prepayments to contractors.

This report provides Parliament and other users of the Education portfolio of agencies’ financial statements with the results of our audits, analysis, conclusions and recommendations in the following areas:

• financial reporting
• audit observations.

Financial reporting is an important element of good governance. Confidence and transparency in public sector decision-making are enhanced when financial reporting is accurate and timely.

This chapter outlines our audit observations related to the financial reporting of agencies in the Education portfolio (the portfolio) for 2023.

Appropriate financial controls help ensure the efficient and effective use of resources and administration of agency policies. They are essential for quality and timely decision-making.

This chapter outlines our observations and insights from our financial statement audits of agencies in the Education portfolio.

Appendix one – Early close procedures

Appendix two – Financial data

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

What this report is about

Students in rural and remote areas of NSW face greater challenges compared to their metropolitan peers.

This report examined how the NSW Department of Education (the department) is ensuring that rural and remote students have access to the same quality of early childhood, school education, and skills pathways as metropolitan students.

What we found

A decade since the previous (2013) strategy to address educational disadvantage, there remain considerable gaps in access and outcomes between rural and remote students and metropolitan students.

The Rural and Remote Education Strategy (2021–24) is unlikely to address these longstanding and known issues of educational disadvantage in rural and remote areas.

Key enabling factors such as resourcing a dedicated team, setting performance measures, and establishing suitable governance arrangements were not put in place to support effective implementation of the 2021 strategy.

The department has programs aimed at addressing remoteness challenges, but does not know if these initiatives improve access or outcomes.

The department does not monitor or report on student access or outcomes according to geographic location.

What we recommended

The Department of Education should:

• develop a new strategy that addresses disadvantage in regional, rural and remote education
• establish and report publicly on regional, rural and remote key performance indicators
• improve data collection by using a standard remoteness classification
• improve governance arrangements for regional, rural and remote education
• review the resources provided for regional, rural and remote areas that recognises the additional costs
• develop an approach that ensures all students can access best practice modes of delivery.

In February 2021, the department of Education (the department) released the ‘Rural and Remote Education Strategy (2021–2024)’. The strategy sets a vision that ‘every child in regional New South Wales has access to the same quality of education as their metropolitan peers’. It recognises that students in rural and remote areas of New South Wales face greater challenges compared to students in metropolitan locations. These challenges contribute to regional, rural and remote students underperforming on major educational indicators compared to their metropolitan peers.

In recent years, regional, rural and remote communities experienced a series of natural disasters as well as the COVID-19 pandemic. In response to the pandemic and subsequent school closures, the department introduced new initiatives aimed at minimising the disruption to children including online learning and small group tuition.

The department established a regional, rural and remote education policy unit in 2021 to support delivery of the strategy and its vision.

The objective of this audit was to assess the effectiveness of the department’s activities to ensure that regional, rural and remote students have access to the same quality of early childhood, school education, and skills pathways as their metropolitan peers.

In making this assessment, the audit examined whether:

• The department developed and implemented a strategy that enables regional, rural and remote students to access the same quality of early childhood education, school education, and skills pathways as students in metropolitan New South Wales.
• The department has been addressing the complexities and needs of regional, rural and remote early childhood education, school education, and skills pathways.

This chapter examines the process to develop the Rural and Remote Education Strategy (2021–2024). It considers whether there was a comprehensive program of stakeholder consultation, whether relevant research and evidence was incorporated and whether an effective performance monitoring system was established.

The department made genuine efforts to consult with stakeholders on the new strategy

The department had a clear process to engage and obtain feedback from key stakeholders during the development of the new strategy. It developed a range of documents to support the consultation process including a stakeholder engagement plan, communications plan, and presentation. The department used the International Association for Public Participation (IAP2) Spectrum of Public Participation principles to help ensure that relevant stakeholders were included in the planning and decision-making process.

In late 2019, the department began its first phase of consultations with internal and external stakeholders to get their views on rural and remote education. It consulted internally with department directors, advisory groups, and learning communities, and externally with government agencies, service providers, non-government schools, and universities.

In March 2020, the department developed a stakeholder engagement paper to test the key issues from stakeholder consultations. Four focus areas were identified and included in a consultation paper that went out to key stakeholders for the second round of consultations in May 2020.

In the third consultation phase, the department conducted a workshop with stakeholders to review the earlier feedback, prioritise issues, identify gaps, and provide further input.

This consultation process enabled the department to identify issues and challenges to inform the new strategy. However, it was already aware that the blueprint was having limited success, and had already identified potential focus areas, following the evaluation of the blueprint in 2019.

The department did not consider recent research when developing the new strategy

The department's guidance materials promote the importance of considering research during policymaking. The guidelines describe the need to understand a topic, consult with stakeholders, identify gaps in existing knowledge, and ensure future work is informed by current literature.

In 2013, the department published a literature review on rural and remote education to inform the blueprint. The literature review found that students in rural and remote schools were not performing as well as their metropolitan peers, and that this performance gap was widening. The review attributed this to the higher number of children from low socio-economic backgrounds attending rural and remote schools. The review also identified several other factors that could negatively impact performance outcomes for rural and remote students. The department used the findings of the literature review to develop the key focus areas in the 2013 blueprint.

When the department began developing the new rural and remote education strategy in 2019, it recognised the need to review the literature on recent international initiatives. However, it has not yet released this review. This means that the department could have missed important new developments since it last examined the literature in 2013. Incorporating up-to-date research is important where past strategies have not met all their intended outcomes.

A national review into rural and remote education in 2018 examined Australian and international literature to inform its findings. The review made 11 recommendations to the Australian and state governments. While the NSW Government was not required to formally respond to the review, it could have considered the work done by that review when developing the new strategy. Several review recommendations are addressed in the strategy, while several others are only partly addressed. Gaps between review recommendations and specific strategy actions include improving the availability of quality accommodation, substantially reducing the waiting times for specialist assessments of students with learning difficulties and disabilities and increasing access to high quality distance education.

In 2019, the department commissioned a rural and remote project to contribute a research and evidence base to the new strategy. The main aim of the project was to help the department understand how it could better support rural and remote schools to increase educational outcomes. There was not enough time for this review to be completed prior to the release of the strategy. As of June 2023, the research project had not yet been released.

The strategy did not address all findings and recommendations from a recent evaluation

In 2020, the department's Centre for Education Statistics and Evaluation (CESE) published an evaluation of the blueprint. The evaluation examined how the actions in the blueprint were implemented. It recommended that a new strategy be developed, and made recommendations for things that should be incorporated into the strategy.

The blueprint aimed to ensure students in rural and remote areas could access the same quality of education as their metropolitan peers. The blueprint identified four focus areas to meet that aim:

• quality early childhood education
• great teachers and school leaders
• curriculum access for all
• effective partnerships and connections.

The department developed several initiatives to help meet the objectives of each of the four focus areas. These initiatives are described in Exhibit 5 below.

The evaluation found that initiatives in two of the four focus areas – Quality early childhood education and Curriculum access for all – had performed well. However, the evaluation found that initiatives in the other two focus areas – Great teachers and school leaders and Effective partnerships and connections – did not achieve intended outcomes.

On the whole, the evaluation found that the 'remoteness gap' between rural and remote students and metropolitan students had not reduced since the blueprint was introduced. It recommended that the department continue its focus on rural and remote education by developing a new evidence-based strategy that focused on student outcomes and clear measures of success.

Objectives and actions in the new strategy were similar to those in the blueprint

The 2021 strategy sets an overall vision that 'every child in regional New South Wales has access to the same quality of education as their metropolitan peers'. It also states that the department 'is committed to ensuring all rural and remote students have equitable access to educational opportunities'.

Four areas in the blueprint remained a focus in the new strategy – early childhood education, teacher recruitment and retention, curriculum, and student wellbeing support services. Each focus area identifies a goal, as well as the aims and actions that contribute to those goals.

While this shows the department identified that these areas required continued attention, most actions were to 'increase', 'expand' or 'improve' existing programs and resources. The new strategy did not propose any new ideas or solutions, despite the blueprint achieving limited success in improving outcomes for rural and remote students.

There were no baseline or target measures set to monitor progress of the new strategy

The blueprint evaluation recommended that the department develop a new evidence-based strategy which focused on improving student outcomes. It also recommended the department use a program logic methodology to ensure there was a clear definition of success, adequate measures of success, and continual monitoring to ensure success.

Program logic models are a visual representation of the various components of a program. They can be used to illustrate program priorities, inputs, activities, outputs, outcomes, and assumptions. Logic models are used to explain how a proposed solution will address a specific problem. They are important because they can help test assumptions, build business cases, and identify potential enablers or barriers that could impact the project.

The department did not complete a program logic model during development of the new strategy, nor did it define measures to monitor whether the strategy's overall vision for quality education or the commitment to equitable access was on track to be achieved.

The department has not comprehensively monitored changes in educational outcomes in regional, rural and remote areas since the evaluation of the blueprint in 2020. This evaluation had seven indicators of educational outcomes by remoteness. The measures used in the evaluation could have provided a starting point given the similarity in focus areas between the blueprint and the new strategy. Not addressing past review recommendations increases risks that issues will be repeated.

The policy unit advised it has plans to set up a dashboard to monitor performance across the department's business plan measures by remoteness. This is intended to identify areas where system-wide improvements are required. This is not a comprehensive account of the strategy outcomes because the business plan measures don't capture all the goals of the strategy.

There were no timeframes or resources identified for implementing new strategy actions

The strategy has an overall timeframe of 2021–2024 but does not clarify when it expects the vision, goals, or aims to be achieved, or actions to be implemented.

The department's guidance on policymaking sets out how projects should be transitioned between the policy and implementation teams. This guidance is intended to help ensure the policy intent and scope of the project are not lost during the delivery of the project. The guidance highlights that the policy team should establish clear project implementation timeframes. It is important to have clear timeframes because it enables teams to measure progress, manage resources, and prioritise actions to ensure project outcomes are achieved.

The strategy states that there is a further $1 billion of investment planned over the next three years for rural and remote education but does not identify how this is allocated across its focus areas. It is important to identify the resources required to support the implementation of a program so that program objectives are met in a timely and cost-effective manner. The previous blueprint identified much lower funding of $80 million but more clearly showed how it would be allocated for identified actions across the four focus areas.

In response to our requests, the department separately identified $1.286 billion in expenditure for regional, rural and remote schools referenced in the strategy. Most of this expenditure related to existing department programs and activities rather than new initiatives. The total amount included:

• $576.9 million for new and upgraded schools
• $365.8 million for upgraded information technology equipment and resources
• $120 million for school facility upgrades to be co-funded by schools
• $60 million to replace school roofs
• $60 million for the COVID Intensive Learning Support Program
• $32 million for the Early Action for Success program
• $29.7 million for staffing incentives
• $21.7 million for literacy and numeracy interventions
• $18.8 million in school location allowances
• $1.45 million for the Rural Learning Exchange Pilot
• $0.4 million for Rural and Remote Network initiatives.

This chapter examines the arrangements in place to implement the strategy. It considers whether effective governance arrangements are in place and how progress is monitored and reported.

This chapter considers the effectiveness of arrangements to ensure regional, rural and remote students have access to quality early childhood education, school education, and post‑school transitions.

This chapter considers the department's arrangements to monitor educational and wellbeing outcomes of students by remoteness. It reports on differences in outcomes between students in metropolitan areas and those in regional, rural and remote areas.

Those living in regional, rural and remote areas can have greater difficulty in accessing government services, often needing to travel long distances, or facing lower service levels than provided in major cities. This context is important when considering educational and wellbeing outcomes, given the disruptive effects of waiting or missing out on important services.

The rest of this chapter details key measures in the department's outcome and business plan.

Appendix one – Response from agency

Appendix two – About the audit

Appendix three – Performance auditing

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

Parliamentary reference - Report number #385 - released 10 August 2023

What the report is about

The Government Advertising Act 2011 requires the Auditor-General to undertake a performance audit on government advertising activities each financial year.

This audit examined whether TAFE NSW's annual advertising campaign in 2021–22:

1. was carried out effectively, economically, and efficiently
2. complied with regulatory requirements and the Government Advertising Guidelines.

What we found

TAFE NSW complied with Section 6 of the Act, prohibiting political content.

It also complied with most other advertising requirements.
 
An important exception was that the Managing Director certified that the campaign complied with regulatory requirements and was an efficient and cost-effective means of achieving its public purpose, before a cost-benefit analysis (CBA) was completed.

We have found issues with agencies complying with CBA requirements in previous government advertising audits. This includes the failure to complete them before signing compliance certificates.

The policy owner, the Department of Customer Service (DCS), does not consider oversight of CBAs to be within the scope of their peer review process.  

TAFE NSW evaluated this advertising campaign by surveying a population significantly broader than the target audience. As such, survey results may not accurately reflect the views of the intended audience.

What we recommended

By 30 June 2023, TAFE NSW should:

1. implement processes that ensure:
   1. CBAs are completed before the launch of campaigns over $1 million
   2. compliance certificates are completed only after all regulatory requirements are met
2. consider adding to its current evaluation methods by surveying a population which closely reflects the age profile of its intended target audience.

By June 2023, DCS should:

3. improve whole‑of‑government reporting and monitoring processes to provide the NSW Government with a central view of compliance, including the completion of CBAs by agencies.

The Government Advertising Act 2011 (the Act) sets out requirements that must be followed by a government agency when it carries out a government advertising campaign. The requirements include an explicit prohibition on political advertising, as well as a need to complete a peer review and cost-benefit analysis before the campaign commences. The accompanying Government Advertising Regulation 2018 (the Regulation) and Government Advertising Guidelines (the Guidelines) address further matters of detail.

The Act also requires the Auditor-General to conduct a performance audit on the activities of one or more government agencies in relation to government advertising campaigns in each financial year. The performance audit must assess whether a government agency (or agencies) has carried out activities in relation to government advertising campaigns in an effective, economical and efficient manner. It also assesses compliance with the Act, the Regulation, other laws and the Guidelines.

This audit examined TAFE NSW's advertising campaign for the 2021–22 financial year. TAFE NSW is the NSW Government's public provider of vocational education and training. TAFE NSW carries out an advertising campaign every year. In 2021–22, it spent $15.16 million on developing and implementing advertising. TAFE NSW used channels such as television, radio, internet and social media, press, and out of home advertising in public settings such as bus stops. The advertising aimed to increase the percentage of people considering TAFE NSW for training or education, grow the percentage of people who consider TAFE NSW to be the preferred education provider in NSW, and maintain the proportion of people who are aware of TAFE NSW more generally.

There are a range of private service providers helping to deliver vocational education and training in NSW.

This part of the report sets out key aspects of TAFE NSW's compliance with the government advertising regulatory framework. It considers whether TAFE NSW complied with the:

• Government Advertising Act 2011
• Government Advertising Regulation 2018
• NSW Government Advertising Guidelines 2012 and other relevant policy.

This part of the report considers whether TAFE NSW's advertising program for 2021–22 was carried out in an effective, efficient, and economical manner.

Appendix one – Responses from agencies

Appendix two – About the campaign

Appendix three – About the audit

Appendix four – Performance auditing

Copyright notice

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

Parliamentary reference - Report number #377 - released 28 February 2023

What the report is about

Result of the Education cluster financial statement audits for the year ended 30 June 2022.

What we found

Unmodified audit opinions were issued for Education cluster agencies.

An 'other matter' paragraph was included in the TAFE Commission's independent auditor's report as it did not have a delegation or sub-delegation from the Minister for Education and Early Learning to incur expenditure from cluster grants.

What the key issues were

Annual fair value assessments of land and buildings showed material differences in their carrying values. As a result, the Department of Education and the TAFE Commission completed desktop revaluations of land and buildings, collectively increasing the value of these assets by $1.2 billion and $4.7 billion respectively.

The Department of Education and the NSW Education Standards Authority accepted changes to their office leasing arrangements managed by Property NSW. These changes resulted in the collective derecognition of $270.6 million of right-of-use assets and $382.9 million in lease liabilities.

What we recommended

A high-risk matter was reported in the management letter for the TAFE Commission highlighting non-compliance with policies and procedures guiding appropriate use of purchasing cards.

We recommended cluster agencies prioritise and address internal control deficiencies.

This report provides Parliament and other users of the Education cluster’s financial statements with the results of our audits, analysis, conclusions and recommendations in the following areas:

• financial reporting
• audit observations.

Financial reporting is an important element of good governance. Confidence and transparency in public sector decision-making are enhanced when financial reporting is accurate and timely.

This chapter outlines our audit observations related to the financial reporting of agencies in the Education cluster (the cluster) for 2022.

Appropriate financial controls help ensure the efficient and effective use of resources and administration of agency policies. They are essential for quality and timely decision-making.

This chapter outlines our observations and insights from our financial statement audits of agencies in the Education cluster.

The number of findings reported to management has increased, and 31% were repeat issues

Breakdowns and weaknesses in internal controls increase the risk of fraud and error. Deficiencies in internal controls, matters of governance interest and unresolved issues were reported to management and those charged with governance of agencies. The Audit Office does this through management letters, which include observations, related implications, recommendations and risk ratings.

In 2021–22, there were 29 findings raised across the cluster (28 in 2020–21). Thirty-one per cent of all issues were repeat issues (50% in 2020–21).

The most common new and repeat issues related to internal control deficiencies in agencies’ information technology general controls, application controls, and procurement and payroll practices.

A delay in implementing audit recommendations increases the risk of intentional and accidental errors in processing information, producing management reports and generating financial statements. This can impair decision-making, affect service delivery and expose agencies to fraud, financial loss and reputational damage. Poor controls may also mean agency staff are less likely to follow internal policies, inadvertently causing the agency not to comply with legislation, regulation and central agency policies. 

A high-risk matter was reported at the TAFE Commission highlighting instances of non-compliance with policies and procedures guiding appropriate purchasing card use

As part of our audit of the TAFE Commission, we integrated the use of data analytics into the audit approach. We performed data analytics over aspects of payroll, procurement and accounts payable activities. This helped us to highlight anomalies or risks in those data sets that are relevant to the audit of the TAFE Commission and plan testing procedures to address those risks. Data analytics also assisted us in providing an insight into the internal control environment of the TAFE Commission, highlighting areas where key controls are not in place or are not operating as management intended.

Our analysis over purchasing card data supplied by the TAFE Commission for the period July 2021 to March 2022 found deficiencies in the provisioning, use and cancellation of purchasing cards. This included identified instances of:

• controls effectively bypassed when a purchasing card surrendered by a former employee had been used by another employee
• split payments, circumventing delegation / cardholder limits
• delays in the submission and approval of purchasing card transactions.

The table below describes the common issues identified across the cluster by category and risk rating:

Appendix one – Early close procedures

What the report is about

Poor attendance at school is related to poor student outcomes, particularly once patterns of non-attendance have been established.

This report examined how the NSW Department of Education (the department) is managing student attendance in NSW government schools.

What we found

Around a third of students in Years 1–10 attended school less than 90% of the time in semester one, 2021. Missing more than 10% of school may put a student's educational outcomes at risk.

Since 2018, the department has improved the quality of student attendance data, analysis and reporting. However, there are still gaps in understanding the reasons for absence at a system level.

The department set state-wide and school-level targets to increase the proportion of students attending school at least 90% of the time. This emphasis risks diverting attention away from students with very low attendance rates.

There are gaps in central programs to support schools in lifting student attendance. Schools are taking a variety of approaches to this work.

There is a large gap in attendance between Aboriginal and non-Aboriginal students, which has increased since 2018.

What we recommended

The Department of Education should:

• set new state-wide and school level attendance targets
• evaluate its attendance support programs
• update its attendance strategies and programs
• publish the attendance level for each school in their annual reports
• improve internal analysis and reporting of attendance data
• finalise the review of the attendance policy, procedure and codes
• review programs supporting Aboriginal student attendance and address any gaps
• review the approach to enforcing compulsory school attendance.

Regular attendance at school is important for academic and other long-term outcomes. Students who do not attend regularly are less likely to complete school and more likely to experience poorer long-term health and social outcomes. A range of factors influence student attendance including student engagement and wellbeing, family and community factors and the school environment.

The NSW Department of Education's (the department's) Strategic Plan for 2018–2022 identifies improving student attendance as a priority. It has identified 95% as its expected level of attendance. It set targets to increase the proportion of students attending school at least 90% of the time, from 79.4% to 82% in primary schools and 64.5% to 70% for secondary schools.

This report focuses on attendance data for semester one of 2018, 2019 and 2021. Unless otherwise noted, attendance data refers to Years 1–10 in alignment with national reporting conventions. Changes in recording systems and definitions mean attendance data prior to 2018 is not comparable. Attendance data for semester one of 2020 and 2022 was significantly affected by COVID-related disruptions, which prevented many students across the State from attending school. Data for semester one of 2021 is considered relatively less affected by COVID-related disruptions.

The Education Act 1990 (the Act) sets out the responsibilities of students, parents and the department for ensuring students receive compulsory schooling. The department has developed policies, procedures and guidance to assist schools in managing their responsibilities to promote regular attendance. In this report, we define 'regular' attendance as at least 90% of the time. This is equivalent to missing one day of school each fortnight or four weeks of school across a school year.

The objective of this audit was to assess whether student attendance is effectively managed in NSW government schools for students from kindergarten to Year 10. In making this assessment, the audit examined whether:

• there are effective systems and policies for managing student attendance
• the department effectively supports schools to manage student attendance
• schools are effectively managing student attendance.

This chapter considers the effectiveness of systems to accurately collect, analyse and report student attendance data. It also considers the effectiveness of policies and procedures to support attendance and central oversight of attendance issues.

This chapter considers the effectiveness of the department's strategies to improve student attendance and the support it provides to schools to achieve this. It also considers the effectiveness of school-level strategies and actions for students with low attendance.

Appendix one – Response from agency

Appendix two – About the audit

Appendix three – Performance auditing

Copyright notice

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

Parliamentary reference - Report number #368 - released 27 September 2022

What the report is about

In this report, we have analysed the key findings and recommendations from our audit reports over the past four years.

This analysis includes financial audits, performance audits, and compliance audits of state and local government entities that were tabled in NSW Parliament between July 2018 and February 2022.

The report is framed by recognition that the past four years have seen significant challenges and emergency events.

The scale of government responses to these events has been wide-ranging, involving emergency response coordination, service delivery, governance and policy.

The report is a resource to support public sector agencies and local government to improve future programs and activities.

What we found

Our analysis of findings and recommendations is structured around six key themes:

• Integrity and transparency
• Performance and monitoring
• Governance and oversight
• Cyber security and data
• System planning for disruption
• Resource management.

The report draws from this analysis to present recommendations for elements of good practice that government agencies should consider in relation to these themes. It also includes relevant examples from recent audit reports.

In this report we particularly call out threats to the integrity of government systems, processes and governance arrangements.

The report highlights the need for balanced advice to government on options and risks, for transparent documentation and reporting of directions and decisions, and for early and open sharing of information with integrity bodies and audit.

A number of the matters highlighted in this report are similar to those described in our previous Insights Report, (Performance Audit Insights: key findings from 2014–2018) specifically in relation to cyber and information security, to performance measurement, reporting and evaluation, and system and workforce planning and capability.

I am pleased to present the Audit Insights 2018–2022 report. This report describes key findings, trends and lessons learned from the last four years of audit. It seeks to inform the New South Wales Parliament of key risks identified and to provide insights and suggestions to the agencies we audit to improve performance across the public sector.

The report is framed by a very clear recognition that governments have been responding to significant events, in number, character and scale, over recent years. Further, it acknowledges that public servants at both state and council levels generally bring their best selves to work and diligently strive to deliver great outcomes for citizens and communities. The role of audit in this context is to provide necessary assurance over government spending, programs and services, and make suggestions for continuous improvement.

A number of the matters highlighted in this report are similar to those described in our previous Insights Report, (Performance Audit Insights: key findings from 2014–2018) specifically in relation to cyber and information security, to performance measurement, reporting and evaluation, and system and workforce planning and capability.

However, in this report we particularly call out threats to the integrity of government systems, processes and governance arrangements. We highlight the need for balanced advice to government on options and risks, for transparent documentation and reporting of directions and decisions, and for early and open sharing of information with integrity bodies and audit. Arguably, these considerations are never more important than in an increasingly complex environment and in the face of significant emergency events and they will be key areas of focus in our future audit program.

While we have acknowledged the challenges of the last few years have required rapid responses to address the short-term impacts of emergency events, there is much to be learned to improve future programs. I trust that the insights developed in this report provide a helpful resource to public sector agencies and local government across New South Wales. I would be pleased to receive any feedback you may wish to offer.

Margaret Crawford
Auditor-General for New South Wales

This report brings together a summary of key findings arising from NSW Audit Office reports tabled in the New South Wales Parliament between July 2018 and February 2022. This includes analysis of financial audits, performance audits, and compliance audits tabled over this period.

• Financial audits provide an independent opinion on the financial statements of NSW Government entities, universities and councils and identify whether they comply with accounting standards, relevant laws, regulations, and government directions.
• Performance audits determine whether government entities carry out their activities effectively, are doing so economically and efficiently, and in accordance with relevant laws. The activities examined by a performance audit may include a selected program or service, all or part of an entity, or more than one government entity. Performance audits can consider issues which affect the whole state and/or the local government sectors.
• Compliance audits and other assurance reviews are audits that assess whether specific legislation, directions, and regulations have been adhered to.

This report follows our earlier edition titled 'Performance Audit Insights: key findings from 2014–2018'. That report sought to highlight issues and themes emerging from performance audit findings, and to share lessons common across government. In this report, we have analysed the key findings and recommendations from our reports over the past four years. The full list of reports is included in Appendix 1. The analysis included findings and recommendations from 58 performance audits, as well as selected financial and compliance reports tabled between July 2018 and February 2022. The number of recommendations and key findings made across different areas of activity and the top issues are summarised at Exhibit 1.

The past four years have seen unprecedented challenges and several emergency events, and the scale of government responses to these events has been wide-ranging involving emergency response coordination, service delivery, governance and policy. While these emergencies are having a significant impact today, they are also likely to continue to have an impact into the future. There is much to learn from the response to those events that will help the government sector to prepare for and respond to future disruption. The following chapters bring together our recommendations for core elements of good practice across a number of areas of government activity, along with relevant examples from recent audit reports.

This 'Audit Insights 2018–2022' report does not make comparative analysis of trends in public sector performance since our 2018 Insights report, but instead highlights areas where government continues to face challenges, as well as new issues that our audits have identified since our 2018 report. We will continue to use the findings of our Insights analysis to shape our future audit priorities, in line with our purpose to help Parliament hold government accountable for its use of public resources in New South Wales.

Appendix one – Included reports, 2018–2022

Appendix two – About this report

Copyright notice

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.