Unqualified opinions were issued for all agencies audited in the following report.

Some of the reports findings include:

• Most cultural bodies rely heavily on government grants to fund services

• The Sydney Opera House Trust earns most of its revenue from commercial operations

• Less than half of the 2014-16 service agreements between HealthShare NSW and its customers have been signed. HealthShare NSW and health entities should finalise their 2014-2016 service agreements by no later than 31 January 2014

• Five service level agreements with NSW Health Pathology for 2012-13 were never signed. NSW Health Pathology and local health districts/speciality networks should finalise their 2013-14 service agreements by no later than 31 December 2013

• HealthShare NSW is committed to sharing internal audit findings across NSW Health

• The Ministry has started a long-term project to review its policy directives

• A recent review concluded the health sector has mature risk management practices

• When changes to the Aboriginal Land Rights Act 1983 occur, the Minister should identify and assess any risks from the changes and develop strategies to mitigate against them.

Unqualified audit opinions were issued on the above corporations’ 30 June 2013 financial statements. During the year, Treasury issued TC 13/01 ‘Mandatory early close procedures for 2013’. This Circular aimed to improve the quality and timeliness of agencies’ annual financial statements. In 2012-13, application of the circular was made mandatory for State owned corporations. As a result, the port corporations were required to perform the early close procedures. All the port corporations were successful in performing the procedures, which helped them submit financial statements by an earlier due date. The early close procedures also resulted in general improvements to the quality of most financial statements.

The report recommends all transport entities should do more to reduce excessive annual leave balances to ensure they will comply with new targets set by the Premier, RailCorp, Sydney Trains and NSW Trains should minimise the amount of overtime bonuses paid to train drivers and that Transport for NSW should set targets to measure the overall satisfaction of train users.

Volume Nine focuses on our financial audits of New South Wales government agencies in the environment, water, planning and infrastructure and family and community services. Some agencies in the Department of Premier and Cabinet are also included.

Unqualified audit opinions were issued on the NSW Government controlled insurance and compensation entities’ 30 June 2013 financial statements, except the NSW Self Insurance Corporation (SICorp). SICorp’s audit opinion was qualified due to non-compliance with Australian Accounting Standards applicable to general insurance contracts. The auditor’s reports drew attention to the significant uncertainty in estimating outstanding claims liabilities of $14.0 billion in the Workers’ Compensation Nominal Insurer and $2.1 billion in the Lifetime Care and Support Authority. The audit of the Building Insurers’ Guarantee Corporation was not complete at the time of this report and is excluded from this commentary. 

During the year, Treasury issued TC 13/01 ‘Mandatory early close procedures for 2013’. This circular aimed to improve the quality and timeliness of agencies’ annual financial statements. In 2012-13, application of the circular was made mandatory for State owned corporations. As a result, the NSW Generators, Distributors and Transgrid were required to perform the early close procedures. All the electricity entities were broadly successful in performing the procedures, which helped them submit financial statements by an earlier due date.

This in turn enabled the financial statement audits to be finalised within an earlier timeframe of eight weeks (nine weeks in 2011-12), with the exception of Eraring Energy’s audit, which is yet to be finalised. The early close procedures also resulted in improvements to the quality of the financial statements, as evidenced by fewer reported misstatements in 2012-13 compared to 2011-12.

State Rail has made significant improvements since the purchase of the Tangara. It improved measures necessary for handling contracts dealing with technically complex and innovative projects, although some other problems have been encountered, with new lessons to learn. The design and manufacture of new trains requires a significant investment in both time and cost. The Millennium Train has come at a considerably higher price than originally expected. And it is very late compared to the Government’s original announcements, as the development/design took longer than planned.

Parliamentary reference - Report number #112 - released 17 June 2003

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

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

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