About this report

Bus services in metropolitan Sydney are provided by private operators under contract to the NSW government. Transport for NSW (TfNSW) determines bus timetables, routes, stops, and frequency, while the operators deliver the specified bus services.

This audit assessed the effectiveness of TfNSW’s design and management of metropolitan Sydney bus service contracts. The audit focused on the nine regions where services are provided under the Greater Sydney Bus Contract (GSBC).

Conclusion

TfNSW is not effectively managing bus contracts to ensure that operators are meeting contracted obligations and customer needs. It has not responded strategically to major changes in commuter, work and travel patterns on metropolitan bus services.

TfNSW identified significant gaps in its strategic contract management capacity since 2022 but has not sufficiently addressed these. As a result, it has not undertaken essential medium to long term strategic activities required to effectively manage the GSBCs. It has not conducted a holistic, systematic review of service levels across all regions to fully address the impacts of the post-COVID-19 period, and other changes such as new infrastructure and travel options like the Sydney Metro M1 line.

First stop on time running has stabilised since January 2023. However, operators are not consistently meeting their performance obligations for on time running, cancelled trips and customer complaints.

There are gaps in TfNSW’s contract management specific procedures and delegations. These gaps mean that the risks of inappropriate exercise of delegations, non compliance with contractual requirements and/or inappropriate use of public funds are not fully addressed.

Recommendations

The audit recommends that TfNSW improve the capacity of its bus contracts management team. It should also close the gaps in its contract management specific procedures and delegations, and start regularly auditing operator responses to customer complaints.

TfNSW should implement strategic planning, including enhanced data analytics, aimed at improving bus operator performance.

On time running (OTR), customer complaints, tracking rates, and cancelled and incomplete trips are important key performance indicators (KPIs) as they represent significant facets of the customer experience.⁷ This chapter considers OTR KPIs in detail, since the start of the Greater Sydney Bus Contract (GSBCs).

OTR is defined in Schedule 4 of the GSBC with three KPIs – first, mid and last stop OTR. All three are measured as the percentage of timetabled bus trips that are on time at the specified location. GSBC operators are required to report to Transport for NSW (TfNSW) on these three KPIs every month.

For the first and mid stops ‘on time’ is defined as between 59 seconds early and five minutes and 59 seconds late compared to the timetable.

TfNSW has advised that mid transit stop OTR has been incorrectly calculated for multiple GSBC regions and that it was in the process of re-calculating this KPI for the operators that were affected. As a result, we do not report mid transit stop OTR numbers here or draw any conclusions about them.

OTR for the last transit stop on a route is measured as a percentage of bus trips arriving on time, where ‘on time’ is defined as no later than five minutes and 59 seconds after the timetable arrival time.

First stop OTR has decreased over the duration of the GSBCs, but it has stabilised in the period from January 2023 to May 2024

Figure 8 shows the aggregated first stop OTR performance data across metropolitan Sydney as a whole (excluding region 6) for the duration of the GSBCs. It also reflects advice received from TfNSW that there is a change in bus operator performance in January 2023 and splits the time period accordingly (April 2022 to December 2023 and January 2023 to May 2024).

During the audit, TfNSW emphasised the impact of the bus driver shortage on bus service performance against KPIs, as well as seasonal effects in OTR performance. Therefore, Figure 8 also shows the reported driver shortages for each month from June 2022, as well as the January and February seasonal effects.

Figure 8 shows that, while there is an overall downward trend in performance, first stop OTR becomes stable after January 2023. Prior to that point in time, performance was declining.⁸

This chapter considers operator performance against key performance indicators (KPIs) for bus tracking rates and cancelled and incomplete trips. From the perspective of bus passengers, tracking is important to ensure timetables and real-time data are accurate and reflects the reality of the services they are receiving. Tracking is also essential for the measurement of on time running (OTR) and cancelled and incomplete trips.

This chapter considers operator performance based on customer complaints received. Customer complaints are defined in Schedule 4 of the Greater Sydney Bus Contract (GSBC) as any report of a negative experience in relation to a bus service in the categories of ‘complaint’ and ‘feedback’. This excludes vexatious complaints, and any complaints about issues that are within Transport for NSW’s (TfNSW) control and not the operators.

Customer complaints have increased since the start of the GSBC

The number of customer complaints about bus services over the entire GSBC area has increased over time. The number of complaints per 100,000 boardings in May 2024 is approximately double that in April 2022 (28.9 complaints per 100,000 boarding compared to 14.4), reflecting increasing customer dissatisfaction with the services delivered.

Complaints are measured using several key performance indicators (KPIs) that represent factors such as the number of complaints per 100,000 boardings and the time it takes operators to respond to complaints. Figure 12 represents the number of customer complaints per 100,000 boardings across the GSBC operators over the GSBC period.

Appendix 1 – Response from Transport for NSW

Appendix 2 – The evolution of bus contracting in NSW from 2003

Appendix 3 – About the audit

Appendix 4 – 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 #402 - released 29 January 2025.

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.

About this report

Local councils in NSW manage a large proportion of roads across the state. Roads often represent a significant proportion of total council
expenditure.

How councils manage roads is impacted by their revenue, local conditions, and the needs of residents, businesses and other road users.

This audit was undertaken within the wider context of natural disasters and weather events that have significantly impacted the road network in NSW in recent years.

It assessed whether three councils had effectively managed their road assets to meet the needs of their communities, makes detailed findings and recommendations to each audited council, and identifies key lessons for the wider local government sector.

Key findings

All councils can improve how they link community consultation with planned service levels. Formalising these processes could help better demonstrate how current service levels meet community needs.

Clarence Valley Council

• has established a strategic priority for road asset management but not formal governance arrangements or a long-term capital works program
• is delivering and reporting on its work to respond to natural disasters but does not report against targets for road asset quality and service
• has set benchmarks for road asset maintenance, replacement and renewal but needs clear service levels.

Gwydir Shire Council

• did not have aligned, up-to-date asset plans during the audit period
• did not have a long-term capital works program but adopted a prioritisation program for capital works in August 2024
• did not effectively implement formal governance, or coordinate management oversight, to manage its road assets.

Wollondilly Shire Council

• has a strategic framework for road asset management and has used long-term plans to guide its asset capital and maintenance works
• has reported asset management outcomes against a planned capital works program but could improve how it uses KPIs to demonstrate performance.

This is the first performance audit of the local government sector that I am tabling in Parliament as Auditor-General for New South Wales.

Our performance audits are designed to provide valuable information to parliamentarians, sector stakeholders and the public. Ultimately, our aim is to ensure transparency, a principle that underpins effective and efficient use of public resources.

The management of roads and associated assets is a critical issue for local councils across the state. In recent years, many councils have had to contend with the immediate and ongoing effects of natural disasters.

These natural disasters, along with increased community expectations, population changes and complex regulatory obligations all contribute to financial sustainability risks for councils. Some councils have used short-term funding allocations (including emergency relief grants) to cover the costs of managing long-term assets. These councils do not have the capacity to generate sufficient income from their own sources, and therefore depend on assistance from other levels of government. Councils’ ability to plan and budget for the long term has also been disrupted by the need for new or restored infrastructure outside asset life cycles.

Several reports and inquiries in recent years have highlighted these significant financial sustainability risks. The parliamentary inquiry into the ‘Ability of local governments to fund infrastructure and services’,¹ due to be tabled soon, will be a critical input to a long-term solution.

The three councils audited in this report – Clarence Valley, Gwydir Shire and Wollondilly Shire –each experienced significant natural disasters, including fires, storms and floods during the audit period. Despite this, each audited council was able to deliver a large volume of road asset management works.

This report provides valuable lessons from these audited councils that can help all councils manage their roads more effectively in the face of evolving risks and competing resource demands.

I acknowledge this has been a difficult time for some councils across NSW. This report supports councils with practical steps to manage their roads as effectively as possible, improve their resilience to climate challenges and meet legislative requirements.

¹ The inquiry into the ‘Ability of local governments to fund infrastructure and services’ by the NSW Legislative Council Standing Committee on State Development commenced on 14 March 2024 to inquire into, and report on, the ability of local governments to fund infrastructure and services.

Background

Local councils in New South Wales (NSW) manage over 180,000 km of local and regional roads combined. These roads are crucial to travel within local government areas and across the state, improving community accessibility. Reliable roads ensure commercial and public transport can run on time, increase safety and keep the environment clean.

As roads age and deteriorate, they become more expensive to repair. Road surfaces and formations are vulnerable to both extreme heat and water exposure. These kinds of exposure have varying effects on the ways roads degrade, depending on the amount of traffic and the kinds of vehicles that use them.

Local conditions, business and road-user needs, and the impacts of natural disasters vary between councils and influence the way each council manages its roads. Regularly maintaining roads can keep roads functional and safe and prevent costly, unbudgeted repairs and replacements.

In the 2022–23 financial year (FY2022–23), the estimated total replacement cost of council road assets across NSW was around $102 billion. In the same year, local councils reported collective road asset maintenance expenditure of around $1 billion.

Since 2017, financial audits of local councils have identified asset management-related issues, including gaps in asset management processes, governance and systems. The Audit Office’s ‘Local Government 2023’ report outlined 266 asset management-related findings across the local government sector, including gaps in revaluation processes, maintenance of information in asset management systems and accounting practices.

Councils also provide a wide range of other services and infrastructure, including water and sewer infrastructure and services, waste management, environmental protection, housing, and community transport. Through integrated planning and reporting, councils determine how they will allocate resources to their services and infrastructure. Understanding community expectations for assets and services, alongside technical requirements, supports effective planning for function, cost and quality.

Audit objective

This audit assessed how effectively three councils – Clarence Valley Council, Gwydir Shire Council and Wollondilly Shire Council – are managing their road assets to meet the needs of their communities.

The audit assessed whether the selected councils:

• have a strategic framework in place for managing their road assets
• have effective governance, data and systems for road asset management
• are managing their road assets in line with planned service levels and quality outcomes.

Overview of findings

This audit assessed how effectively Clarence Valley Council, Gwydir Shire Council and Wollondilly Shire Council managed their road assets to meet the needs of their communities.

In assessing each Council’s performance, this audit concluded:

Clarence Valley Council has effectively established a strategic priority for road asset management, but delivery of this priority was not supported by formal governance arrangements or a long-term capital works program. While the Council is delivering and reporting on a large volume of road asset works in response to natural disasters, it does not report on consolidated targets for road asset quality and service. The Council has set benchmarks for maintenance, replacement and renewal of roads. It now needs to enhance this with clear service levels to ensure community needs and expectations are met.

Detailed conclusions and recommendations for the Council are outlined in sections 2.2 and 2.3. Recommendations include that Clarence Valley Council:

• updates and implements its asset management plan and associated improvement actions
• reviews and implements key performance indicators (KPIs)
• captures lessons learned from its natural disaster responses
• implements a long-term capital works program.

Gwydir Shire Council did not have aligned, up-to-date long-term asset management plans to support a strategic framework for road asset management across the audit period. The Council did not effectively implement formal governance and coordinated management oversight for its road assets. The Council implemented updates to its asset management plans in June 2024 and governance arrangements in July 2024.

The Council has reported on the large volume of works it is delivering, including in response to natural disasters, but is not reporting in the context of information about targets and quality benchmarks. The Council does not have a long-term capital works program, but adopted a prioritised rolling program of works in August 2024 to guide its priorities and efforts over time.

Detailed conclusions and recommendations for the Council are outlined in sections 3.2 and 3.3. Recommendations include that Gwydir Shire Council:

• implements its asset management plans and associated improvement actions
• formalises and documents community priorities and service level expectations for roads
• captures lessons learned from its natural disaster responses.

Wollondilly Shire Council has effectively applied a coordinated and strategic framework to deliver road asset management. The Council has long-term plans to guide its efforts and uses data to inform its approach. The Council has delivered a large volume of works in response to natural disasters during the audit period. The Council is reporting its road asset management outcomes and can demonstrate progress against a clearly defined capital works program, but its use of performance indicators could be improved.

Detailed conclusions and recommendations for the Council are outlined in sections 4.2 and 4.3. Recommendations include that Wollondilly Shire Council:

• finalises and implements its transport asset management plan
• reviews performance indicators for road assets
• formalises and documents community priorities within its integrated planning and reporting (IP&R) and asset management frameworks.

Key observations of good practice

While each council was separately audited, this report also identifies practices that contribute to effective road asset management across all local councils.

These include:

1. a good understanding and articulation of the community’s vision, priorities and purpose for local roads
2. asset management documents that are current and aligned with broader strategies and financial plans
3. long-term capital works planning that considers associated ongoing costs, and is supported by systematic prioritisation of works
4. clear and documented decision making processes
5. transparent performance reporting on progress and outcomes
6. reliable, accurate and assured data and systems
7. continuous improvement through both formal reviews and capturing lessons learned
8. resilience and responsiveness to natural disasters with a planned approach to disaster recovery.

Further lessons for local government can be found in Appendix 3.

Appendix 1 – Response from entity

Appendix 2 – Council expenditure profile

Appendix 3 – Lessons for local government road asset management

Appendix 4 – About the audit

Appendix 5 – 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 #401 - released 21 November 2024.

Effectiveness of Transport for NSW’s procurement of new passenger rail rolling stock

The audit will assess the effectiveness of Transport for NSW in planning and sourcing new passenger rail rolling stock under two procurement projects:

• New Intercity Fleet (or ‘Mariyung’ fleet) procurement which will deliver approximately 61 intercity train fleet replacements to service the Central Coast, Newcastle, Blue Mountains and Wollongong.
• Regional Rail Fleet procurement will deliver approximately 29 regional train fleet replacements of the XPT, XPLORER and Endeavour trains, to service regional NSW, Sydney, Canberra, Melbourne and Brisbane.

The audit will address these questions:

• Did Transport for NSW effectively identify its business needs, including to meet government objectives, during the planning stage of the procurements and justify any variations to scope?
• Did Transport for NSW execute a procurement sourcing process that ensured probity and value for money? 

Sydney Metro is currently Australia’s biggest public transport project. It is a fully automated rapid transit system serving metropolitan Sydney. 

This audit will consider the effectiveness and integrity of the government’s identification and management of risk, with a focus on the project’s initiation, planning and development, procurement and delivery stages. The quality of advice to government and probity will be key considerations.

About this report

The Government Advertising Act 2011 requires the Auditor-General to undertake a performance audit of the activities of one or more government agencies in relation to government advertising campaigns in each financial year.

This year, we examined two campaigns run by Transport for New South Wales (TfNSW) - 'Don't trust your tired self' (DTYTS) and 'Saving lives on country roads' (SLCR).

The audit assessed whether they were carried out effectively, economically, and efficiently, and complied with regulatory and policy requirements.

Audit findings

The DTYTS campaign complied with all requirements set out in the Act, the Regulation, and Government Advertising Guidelines - except for the requirement to complete an approved and complying cost-benefit analysis (CBA), as per the Guidelines.

The campaign had a clear target audience. It achieved many of its stated objectives and other performance measures and represented an economical and efficient spend.

However, TfNSW has not measured the campaign's long-term impact and this, combined with the lack of a complying CBA, meant that TfNSW could not confidently demonstrate the campaign's effectiveness.

The SLCR campaign (which commenced in 2017) was last run fully in 2021–22. TfNSW could have improved the formal documentation of its decision-making process when it cancelled the SLCR campaign.

TfNSW continued to run state-wide advertising campaigns – with regional components - to address road safety in regional NSW.

Recommendations

By 31 October 2024, TfNSW should implement processes that ensure:

1. CBAs prepared for government advertising campaigns comply with the Government Advertising Guidelines
2. long-term impacts of advertising campaigns are evaluated
3. strategic and operational decision-making about advertising campaigns, such as starting, stopping or significantly changing a campaign, is well-documented and follows good practice.

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 prohibit any political advertising and require a peer review and cost-benefit analysis to be completed before the campaign commences. The accompanying Government Advertising Regulation 2018 (the Regulation) and 2012 NSW Government Advertising Guidelines (the Guidelines) address further matters of detail.

Section 14 of the Act 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 and in compliance with the Act, the Regulation, other laws and the Guidelines.

This audit examined Transport for NSW's (TfNSW) advertising campaigns 'Don't Trust Your Tired Self' and 'Saving Lives on Country Roads' for the 2022–23 financial year.

TfNSW is the NSW Government agency responsible for leading the development of safe, integrated and efficient transport systems for the people of New South Wales.

The Don't Trust Your Tired Self (DTYTS) campaign, which cost $3.04 million in 2022–23, aimed to educate drivers on how to avoid driving tired and encouraged them to consider how tired they were before driving.

The Saving Lives on Country Roads (SLCR) campaign, which commenced in December 2017, aimed to encourage country drivers¹ to re-think the common excuses used to justify their behaviour on the road. In early 2024, after the audit commenced, the Department of Customer Service (DCS) advised the audit team that TfNSW did not run the SLCR campaign in 2022–23. This was subsequently confirmed by TfNSW. Instead, the SLCR branding was used for the regional element of the state-wide drink driving campaign. As a result, this audit examined the reasons and decision-making process for its cancellation.

The SLCR campaign cost $3.11 million in 2021–22, the last full year in which it was run, and $17,038 in 2022–23.

This part of the report sets out key aspects of Transport for NSW's (TfNSW) compliance with the Government Advertising regulatory framework for Don't Trust Your Tired Self (DTYTS). It considers whether the agency complied with the:

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

This part of the report considers whether Transport for NSW's (TfNSW) advertising campaign Don't Trust Your Tired Self (DTYTS) was carried out in an effective, efficient and economical manner.

This part of the report examines the cancellation of the Saving Lives on Country Roads (SLCR) campaign. It focuses on the decision-making process and evidence for the cancellation of this campaign following its last delivery in 2021–22. It also draws out key implications.

Appendix one – Response from agencies

Appendix two – About the campaigns

Appendix three – About the audit

Appendix four – 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 #396 released 25 June 2024.

What this report is about

Transport for NSW (TfNSW) uses the Driver vehicle System (DRIVES) to support its regulatory functions. The system covers over 6.2 million driver licences and over seven million vehicle registrations.

DRIVES first went live in 1991 and has been significantly extended and updated since, though is still based around the same core system. The system is at end of life but has become an important service for Service NSW and the NSW Police Force.

DRIVES now includes some services to other parts of government and non-government entities which have little or no connection to transport. There are 141 users of DRIVES in total, including commercial insurers, national regulators, and individual citizens.

This audit assessed whether TfNSW is effectively managing DRIVES and planning to transition it to a modernised system.

Audit findings

TfNSW has not effectively planned the replacement of DRIVES.

It is now working on its third business case for a replacement system but has failed to learn lessons from its past attempts.

In the meantime, TfNSW has not taken a strategic approach to managing DRIVES’ growth.

TfNSW has been slow to reduce the risk of misuse of personal information held in DRIVES. With its delivery partner Service NSW, TfNSW has also been slow to develop and implement automatic monitoring of access.

TfNSW uses recognised processes for managing most aspects of DRIVES, but has not kept the system consistently available for users. TfNSW has lacked accurate service availability information since June 2022, when it changed its technology support provider.

TfNSW needs to significantly prioritise cyber security improvements to DRIVES. TfNSW is seeking to lift DRIVES’ cyber defences, but it will not achieve its stated target safeguard level until December 2025.

Even then, one of the target safeguards will not be achieved in full until DRIVES is modernised.

Audit recommendations

TfNSW should:

• implement a service management framework including insight into the views of DRIVES users, and ensuring users can influence the service
• ensure it can accurately and cost effectively calculate when DRIVES is unavailable due to unplanned downtime
• ensure implementation of a capability to automatically detect anomalous patterns of access to DRIVES
• ensure that DRIVES has appropriate cyber security and resilience safeguards in place as a matter of priority
• develop a clear statement of the future role in whole of government service delivery for the system
• resolve key issues currently faced by the DRIVES replacement program including by:
  • clearly setting out a strategy and design for the replacement
  • preparing a specific business case for replacement.

The DRIver VEhicle System_¹ (often known as DRIVES) is the Transport for NSW (TfNSW) system which is used to manage over 6.2 million driver licences and over seven million vehicle registrations in New South Wales.

DRIVES first went live in 1991 and has been significantly extended and enhanced over the past 33 years. DRIVES is a significant NSW Government information system — containing personal information such as home addresses for most of the NSW adult population, sensitive health information such as medical conditions, and biometric data in photographs.

Service NSW, part of the Department of Customer Service, is the NSW Government's 'one stop shop' for services to NSW citizens and businesses. It uses DRIVES when it delivers many transport-related services to NSW citizens such as licence renewals and checks the identity information stored in DRIVES as part of other services delivered to NSW citizens, such as a 'working with children check'.

DRIVES supports TfNSW's regulatory functions and the collection of more than $5 billion in revenue annually for the NSW Government. The system is also used by many organisations outside of the NSW Government including commercial insurers and national regulators, as well as individual citizens who access DRIVES for services such as 'Renew my registration' or 'Book a driver knowledge test'.

TfNSW owns and manages DRIVES. It intends to replace DRIVES with a modernised system to improve its cost, performance, and security.

The objective of this performance audit was to assess whether TfNSW is effectively:

• managing the current system, and 
• planning to transition DRIVES to a modernised system.

The auditee is TfNSW. We have consulted with the Department of Customer Service as a key stakeholder during the audit process.

This part of the report considers whether Transport for NSW (TfNSW) is effectively managing the current system. It considers DRIVES’:

• role in NSW Government service delivery
• ease of use and appropriateness for a modern system
• mechanisms to ensure the service is available for users.

This part of the report considers whether Transport for NSW (TfNSW) is effectively planning to transition DRIVES to a modernised system. It makes findings on the:

•  effort to develop a business case to fund the replacement of DRIVES
• issues which have contributed to the slow progress of the replacement program.

Appendix one – Response from entity 

Appendix two – Statutory and regulatory framework related to DRIVES 

Appendix three – About the audit 

Appendix four – Performance auditing 

Parliamentary reference - Report number #388 - released 20 February 2024.

What this report is about

Result of the Transport portfolio of agencies' financial statement audits for the year ended 30 June 2023.

The audit found

Unqualified audit opinions were issued for all Transport portfolio agencies.

An 'emphasis of matter' paragraph was included in the Transport Asset Holding Entity of New South Wales' (TAHE) independent auditor's report, which draws attention to management's disclosure regarding proposed changes to TAHE's operating model.

Government's decision to convert TAHE into a non-commercial Public Non-Financial Corporation may impact the future valuation and the control of TAHE's assets.

Transport for NSW's valuation of roads and bridges resulted in a net increase to its asset value by $15.7 billion.

Transport for NSW and Sydney Metro have capitalised over $300 million of tender bid costs paid to unsuccessful tender bidders relating to significant infrastructure projects. Whilst NSW Treasury policy provides clarity on the reimbursement of unsuccessful bidders' costs, clearer guidance on how to account for these costs in agency's financial statements is required.

The key audit issues were

The number of issues reported to management decreased from 53 in 2021–22 to 49 in 2022–23.

High-risk findings include:

• gaps in how Sydney Metro manages its contractors and how conflicts of interest are recorded and managed
• future financial reporting implications to account for government's proposed changes to TAHE's future operating model, including asset valuations and control assessments of assets and operations
• Parramatta Park Trust's tree assets' valuation methodology needs to be addressed.

Recommendations were made to address the identified deficiencies.

This report provides Parliament and other users of the Transport 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 Transport portfolio of agencies (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 Transport portfolio.

Appendix one – Misstatements in financial statements submitted for audit 

Appendix two – Early close procedures

Appendix three – Timeliness of financial reporting 

Appendix four – 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

Around one-third of the state’s population lives in regional NSW, but deaths on regional roads make up around two-thirds of the state’s road toll.

Transport for NSW (TfNSW) is responsible for managing road safety outcomes across the NSW road network. This audit assessed the effectiveness of TfNSW’s delivery of road safety strategies, plans and policies in regional areas.

The NSW Road Safety Action Plan 2022–2026 has the stated goal of ‘no death or serious injury occurring on the road transport network’ by 2050.

What we found

There is a disproportionate amount of trauma on regional roads, but there are no specific road safety plans or trauma reduction targets for regional NSW.

TfNSW advises that the setting of state-wide road safety targets is consistent with other jurisdictions and international best practice. However, the proportion of road fatalities and serious injuries in regional NSW is almost the same as ten years ago.

There is no regional implementation plan to assist TfNSW to target the Road Safety Action Plan 2026 to regional areas.

TfNSW considers that local road safety outcomes should be managed by councils, but only 52% of regional councils participated in its Local Government Road Safety Program (LGRSP) in 2022–23. This program has not been updated since 2014, despite commitments to do so in 2021 and 2022.

TfNSW has not undertaken a systematic and integrated analysis of the combined impact of its road safety strategies and plans in regional NSW since 2012.

TfNSW reports against the Community Road Safety Fund (CRSF) annually but there is no consolidated, public reporting on total road safety funding allocated to regional NSW. The Fund underspend increased from 12% in 2019–20 to 20% in 2022–23.

What we recommended

We recommended TfNSW:

• develop a regional implementation plan to support the NSW Road Safety Action Plan, including a framework to annually measure, analyse and publicly report on progress
• develop a plan to measure and mitigate risks causing underspend in the CRSF
• expedite the review of the LGRSP including recommendations to increase involvement of regional councils.

Disclosure of confidential information

Under the Government Sector Audit Act 1983 (the Act), the Auditor-General may disclose confidential information if, in the Auditor-General’s opinion, the disclosure is in the public interest, and that disclosure is necessary for the exercise of the Auditor-General’s functions.

Confidential information in the Act means Cabinet information or information subject to legal privilege. This performance audit report contained confidential information.

The NSW Premier has certified that in his opinion the disclosure of the confidential information was not in the public interest.

The confidential information has been redacted from this report.

Under section 36A(2) of the Government Sector Audit Act 1983, the Auditor-General may authorise the disclosure of confidential information if, in the Auditor-General’s opinion, the disclosure is in the public interest and necessary for the exercise of the Auditor-General’s functions. Confidential information under the Government Sector Audit Act 1983 means Cabinet information, or information that could be subject to a claim of privilege by the State or a public official in a court of law. This performance audit report contained confidential information which, in the opinion of the Auditor-General, is in the public interest to disclose and that disclosure is necessary for the exercise of the Auditor-General’s functions.

On 26 October 2023, pursuant to section 36A(2)(b) of the Government Sector Audit Act 1983, the Auditor-General notified the NSW Premier of the intention to include this information in the published report, having formed the opinion that its disclosure is in the public interest and is necessary for the exercise of the Auditor-General’s functions.

On 23 November 2023, pursuant to section 36A(2)(c) of the Government Sector Audit Act 1983, the NSW Premier certified that, in his opinion, the proposed disclosure of the confidential information contained in this report was not in the public interest. The Premier’s certificate follows. Section 36A(4) states that a certificate of the Premier that it is not in the public interest to disclose confidential information is conclusive evidence of that fact.

The issuance of the certificate by the NSW Premier prevents the publication of this information. The relevant sections of the report containing confidential information have been redacted.

One-third of the New South Wales population resides in regional areas, but two-thirds of the state’s road crash fatalities take place on regional roads.

Between 2017 and 2021, the average number of fatalities for every 100,000 of the population living in regional New South Wales was 8.33 — approximately four times higher than the equivalent measure for Greater Sydney. Similarly, the average number of serious injuries in regional New South Wales over the same period was 75.24 per 100,000 of the population, compared with 50.53 in Greater Sydney. Further, more than 70% of people who lose their lives in accidents on regional roads are residents of regional areas.

Residents of regional areas face particular transport challenges. They often need to travel longer distances for work, health care, or recreation purposes, yet their public transport options are more limited than metropolitan residents. Vehicle safety is also an issue. According to the NSW Road Safety Progress Report 2021, of the light vehicles registered in New South Wales that were manufactured in or after 2000, 48.4% of light vehicles in regional areas had a five-star Australasian New Car Assessment Program (ANCAP) rating, compared to 54.8% in metropolitan areas. Road conditions in regional areas can also be more challenging for drivers.

Regional New South Wales covers 98.5% of the total area of the state. The road network in New South Wales is vast — spanning approximately 200,000 kilometres.

The road network includes major highways, state roads and local roads. Speed limits range from 10 km/hr in high pedestrian shared zones, up to 110 km/hr on high volume and critical road corridors. Eighty per cent of the network has a 100 km/h speed limit, which is mostly applied as a default speed limit, regardless of the presence of safety features and treatments.

Speed is the primary causal factor in more crashes in New South Wales than any other factor, and car crashes in regional areas are more likely to be fatal because of the higher average speeds involved.

The responsibility for managing road safety outcomes across the entire New South Wales road network lies with Transport for NSW (TfNSW), pursuant to Schedule 1 of the Transport Administration Act 1988.

While its safety responsibilities are state-wide, TfNSW does not own or directly manage all of the road network in regional New South Wales, which spans approximately 200,000 kilometres. Approximately 80% of the roads are classified as Local Roads and are administered and managed by local councils. Local councils also maintain Regional Roads that run through their local government areas. TfNSW is responsible for managing State Roads (approximately 20% of roads), which are major arterial roads. It also provides funding for councils to manage over 18,000 km (approximately 10%) of state-significant Regional Roads.

According to TfNSW, between 2016 and 2020, there were 9,776 people killed or seriously injured on roads in regional New South Wales. Adding to the tragic loss of life, according to TfNSW, the estimated cost to the community between 2016 and 2020 resulting from regional road trauma and fatalities was around $13.7 billion.

TfNSW also noted that the ‘risk of road trauma is pervasive, and a combination of effective road safety measures is required to systematically reduce this risk’.

TfNSW released its first long-term road-safety strategy in December 2012, which introduced the goal of ‘Vision Zero’ — a long-term goal of zero deaths or serious injuries on NSW roads. The terminology was changed to ‘Towards Zero’ in the 2021 Road Safety Plan and has been retained in the NSW Road Safety Action Plan 2022–2026. Towards Zero has the stated goal of ‘no death or serious injury occurring on the road transport network’ by 2050.

The objective of this audit is to assess the effectiveness of TfNSW’s delivery of ‘Towards Zero’ in regional areas.

In making this assessment, the audit examined whether TfNSW:

• is effectively reducing the number of fatalities and serious injuries on regional roads
• has an effective framework, including governance arrangements, for designing and refreshing the NSW Road Safety Strategy 2012–2021 and the NSW Road Safety Action Plan 2022–2026
• effectively makes use of whole-of-government and other relevant sources of data to support decision-making, and to evaluate progress and outcomes
• effectively manages accountabilities, including roles and responsibilities, with respect to road safety outcomes and the use of data.

This audit focused on the policies and strategies used by TfNSW for managing road safety outcomes in regional areas. We did not evaluate individual road safety projects, programs and initiatives as part of this audit.

Whilst Regional Roads and Local Roads (as defined by the Road Network Classifications) are owned and maintained by local councils, we included these roads in this audit as TfNSW may advise and assist councils to promote and improve road safety, as well as manage grant programs that focus on improving road safety outcomes on these roads. Hereafter, unless otherwise stated, references to ‘regional roads’ refer to all classifications of roads in the state which are in regional New South Wales, irrespective of their ownership.

Local councils in regional areas are key stakeholders for the purposes of this audit, and we interviewed eight as part of the audit process (noting that this was not intended to be a representative sample). Road asset management by local councils is also out of scope for this audit as it is the focus of a subsequent performance audit by the Audit Office of New South Wales.b

The Audit Office of New South Wales has undertaken several performance audits relating to road safety since 2009 and these have been referenced while undertaking this audit. They include:

• Condition of State Roads (August 2006)
• Improving Road Safety: Heavy Vehicles (May 2009)
• Improving Road Safety: School Zones (March 2010)
• Improving Road Safety: Speed Cameras (July 2011)
• Regional Assistance Programs (May 2018)
• Mobile speed cameras (October 2018)
• Rail freight and Greater Sydney (October 2021).

Appendix one – Response from Transport for NSW

Appendix two – The Safe Systems framework and NSW road safety strategies and plans

Appendix three – About the audit

Appendix four – Performance auditing

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Parliamentary reference - Report number #386 - released 30 November 2023

What this report is about

This report draws together the financial impact of natural disasters on agencies integral to the response and impact of natural disasters during 2021–22.

What we found

Over the 2021–22 financial year $1.4 billion from a budget of $1.9 billion was spent by the NSW Government in response to natural disasters.

Total expenses were less than the budget due to underspend in the following areas:

• clean-up assistance, including council grants
• anticipated temporary accommodation support
• payments relating to the Northern Rivers Business Support scheme for small businesses.

Natural disaster events damaged council assets such as roads, bridges, waste collection centres and other facilities used to provide essential services. Additional staff, contractors and experts were engaged to restore and repair damaged assets and minimise disruption to service delivery.

At 30 June 2022, the estimated damage to council infrastructure assets totalled $349 million.

Over the first half of the 2022–23 financial year, councils experienced further damage to infrastructure assets due to natural disasters. NSW Government spending on natural disasters continued with a further $1.1 billion spent over this period.

Thirty-six councils did not identify climate change or natural disaster as a strategic risk despite 22 of these having at least one natural disaster during 2021–22.