What this report is about 

This report assesses how effectively SafeWork NSW, a part of the Department of Customer Service (DCS), has performed its regulatory compliance functions for work health and safety in New South Wales. 

The report includes a case study examining SafeWork NSW's management of a project to develop a realtime monitoring device for airborne silica in workplaces. 

Findings 

There is limited transparency about SafeWork NSW's effectiveness as a regulator. The limited performance information that is available is either subsumed within DCS reporting (or other sources) and is focused on activity, not outcomes. 

As a work health and safety (WHS) regulator, SafeWork NSW lacks an effective strategic and data-driven approach to respond to emerging WHS risks. 

It was slow to respond to the risk of respirable crystalline silica in manufactured stone. 

SafeWork NSW is constrained by an information management system that is over 20 years old and has passed its effective useful life. 

While it has invested effort into ensuring consistent regulatory decisions, SafeWork NSW needs to maintain a focus on this objective, including by ensuring that there is a comprehensive approach to quality assurance. 

SafeWork NSW's engagement of a commercial partner to develop a real-time silica monitoring device did not comply with key procurement obligations. 

There was ineffective governance and process to address important concerns about the accuracy of the real-time silica monitoring device. 

As such, SafeWork NSW did not adequately manage potential WHS risks. 

Recommendations 

The report recommended that DCS should: 

• ensure there is an independent investigation into the procurement of the research partner for the real-time silica detector 
• embed a formal process to review and set its annual regulatory priorities 
• publish a consolidated performance report 
• set long-term priorities, including for workforce planning and technology uplift 
• improve its use of data, and start work to replace its existing complaints handling system 
• review its risk culture and its risk management framework 
• review the quality assurance measures that support consistent regulatory decisions

Read the PDF report.

Parliamentary reference - Report number #390 - released 27 February 2024
 

What this report is about

The Forestry Corporation of NSW (FCNSW) is a state-owned corporation that manages over two million hectares of public native forests and plantations supplying timber to sawmills across NSW.

The NSW Environment Protection Authority (EPA) is responsible for regulating the native forestry industry in NSW.

FCNSW must comply with Integrated Forestry Operations Approvals (IFOAs), which set out rules for how timber harvesting may occur.

Most harvesting is undertaken under the Coastal IFOA, which commenced in 2018.

This audit assessed how effectively Forestry Corporation of NSW manages its public native forestry activities to ensure compliance, and how effectively the Environment Protection Authority regulates these activities.

What we found

Forestry Corporation of NSW (FCNSW) clearly articulates its compliance obligations.

While FCNSW undertakes monitoring of its contractors, it does not do so consistently and does not target its monitoring activities on a risk basis.

FCNSW has largely fulfilled mandatory Coastal IFOA training requirements, but has not yet trained other staff who would also benefit from the training.

Contractor compliance appears to be improving, but there are gaps and inconsistencies in FCNSW's documentation of this.

FCNSW is not measuring its overall compliance to determine how it is tracking against its target.

The EPA undertakes proactive inspections of Coastal IFOA harvesting operations on a risk basis. However, it does not assess the risk at harvest sites covered by other IFOAs.

Most EPA compliance staff have received basic training, but few have received more advanced training required to effectively undertake forestry inspections.

Some EPA offices do not have the necessary equipment to undertake forestry inspections.

The EPA and FCNSW are not implementing all elements of a Memorandum of Understanding that aims to promote a cooperative relationship between the agencies.

What we recommended

The report made recommendations to FCNSW which aim to improve:

• staff training
• consistency of compliance reviews and data capture
• targeting of compliance activities
• measurement of performance.

The report made recommendations to the EPA which aim to improve:

• risk-assessments
• staff training
• staff equipment.

The report also recommended that FCNSW and EPA should fully implement their Memorandum of Understanding.

The Forestry Corporation of NSW (FCNSW) is a state-owned corporation that supplies timber to sawmills in New South Wales, including timber harvested from public native forests. FCNSW is responsible for the management of around two million hectares of public native forests and plantations. Around half the area of native forests is permanently set aside for conservation.

Public native forestry is regulated through the Forestry Act 2012, Biodiversity Conservation Act 2016, Protection of the Environment Operations Act 1997 and associated regulations. Under the Forestry Act 2012, the objectives of FCNSW include, where its activities affect the environment, to conduct its operations in compliance with the principles of ecologically sustainable development contained in section 6(2) of the Protection of the Environment Administration Act 1991. This involves the integration of social, economic and environmental considerations in decision-making processes.

In undertaking its native forestry operations, FCNSW must comply with Integrated Forestry Operations Approvals (IFOA), issued jointly by the Minister for the Environment and the Minister for Agriculture, which set out rules to protect species and ecosystems where timber harvesting is occurring, and aim to ensure forests are managed in an ecologically sustainable way. FCNSW must also ensure that its contractors undertake forestry operations in line with IFOAs. The Coastal IFOA, developed in 2018, consolidated the four IFOAs for the Eden, Southern, Upper and Lower North East coastal regions of New South Wales into a single IFOA. The other three current IFOAs are Brigalow Nandewar, South Western Cypress and Riverina Redgum (the Western IFOAs).

The NSW Environment Protection Authority (EPA) is responsible for regulating native forestry in New South Wales. Under the Protection of the Environment Administration Act 1991, one of the objectives of the EPA is to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development. This includes monitoring FCNSW’s compliance with IFOA conditions, including by maintaining and enforcing a compliance program.

The Coastal IFOA also introduced a new structure and regulatory approach for IFOAs, establishing outcomes, conditions and protocols. The conditions set mandatory actions and controls intended to protect threatened plants, animals, habitats, soils and water. The protocols, referenced in the conditions, set out additional enforceable actions and controls intended to support the effective implementation of the conditions.

Public native forestry is the largest component of hardwood supply in New South Wales. The 2019–20 bushfires had a major impact on regional communities, and large areas of native forest. This heightened environmental risks and challenges in public native forestry. Five million hectares of New South Wales was impacted, including more than 890,000 hectares of native State Forests. This is over 40% of the coastal and tablelands native State Forests in New South Wales.

In addition to effective compliance activities, the success of the regulatory approach to public native forestry operations depends on how wood supply yields are modelled, and ensuring that harvested volumes do not exceed these yields. This is of particular importance in areas where forests have been severely damaged by fire. This audit did not consider sustainable yields. Recent reviews of this include an independent review of the FCNSW sustainable yield model and a Natural Resources Commission review in 2021.

This audit assessed how effectively Forestry Corporation of NSW manages its public native forestry activities to ensure compliance, and how effectively the Environment Protection Authority regulates these activities.

Appendix one – Responses from agencies
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 #382 - released 22 June 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

Sydney Metro is Australia’s largest public transport project. It requires the acquisition of many private properties, including residential and business properties.

This audit assessed the effectiveness of the acquisition of private properties for the Sydney Metro project. The audited agencies were Sydney Metro, the Department of Planning and Environment (Valuer General NSW) and Transport for NSW (the Centre for Property Acquisition).

The audit assessed agencies against the framework for property acquisitions in New South Wales. It did not re-perform the valuations done for individual properties that were acquired by Sydney Metro.

What we found

Acquisitions of private property for the Sydney Metro project were mostly effective in the sample of acquisitions we assessed. We found Sydney Metro:

• complied with legislative and policy requirements for compensation and communication with people subject to property acquisitions
• kept accurate records of its acquisitions and applied probity controls consistently
• did not complete detailed plans or negotiation strategies for the high-risk and high-value acquisitions we reviewed
• did not comply with legislative timelines for most compulsory acquisitions because of delays in receiving the required information from the Valuer General in these cases.

The Centre for Property Acquisition has overseen the implementation of reforms to residential acquisition processes, but its assessment of the effectiveness of these reforms has not been comprehensive.

What we recommended

The audit made four recommendations to the audited agencies to improve:

• plans and strategies for the acquisition of high-risk and high-value properties
• timeliness of issuing compensation determinations for compulsory acquisitions
• data quality on the experience of people subject to property acquisitions.

The NSW Government has the power to acquire land that is owned or leased by individuals or businesses, if it is needed for a public purpose. The power arises from the Land Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Act). Government agencies that have the power to compulsorily acquire private property are referred to as ‘acquiring authorities’. People who are subject to acquisitions are referred to as ‘affected parties’ and include property owners (business or residential), businesses with a commercial lease on a property, or individuals with residential tenancy leases. In recent years, the vast majority of acquisitions by the NSW Government have been for public transport or road projects.

Sydney Metro is a NSW Government agency with responsibility for building the Sydney Metro railway project. Sydney Metro is Australia’s largest public transport project. The project requires the acquisition of a large number of private properties. Sydney Metro has been one of the largest acquirers of private property in recent years, completing over 500 acquisitions between 2020 and mid-2022, with a total acquisition value of over $2 billion. Other agencies and statutory officers involved in the acquisition of property for the Sydney Metro project include:

• the Department of Planning and Environment (DPE), which supports the minister responsible for the Just Terms Act. DPE also provides staff to the Valuer General of NSW
• the Valuer General of NSW, an independent statutory officer that determines compensation in cases where the acquiring authority and the affected party cannot agree on compensation for property that has been acquired
• Transport for NSW, which includes the Centre for Property Acquisition (CPA). The CPA does not have a direct role in acquiring properties, but its responsibilities include developing guidance for acquiring agencies and monitoring and reporting on their activities.

About this audit

The objective of this audit was to assess the effectiveness of acquisitions of private properties for Sydney Metro projects. The audit assessed agencies against the legislative and policy requirements in place for government acquisitions of private property in New South Wales. In line with the Audit Office's legislative mandate, the audit does not comment on the merits of the policy objectives reflected in the Just Terms Act.

The audit examined a sample of 20 property acquisitions. This was not a statistically representative sample. While our report provides comments on Sydney Metro’s overall acquisition processes, it does not provide assurance regarding the acquisitions that were not examined for this audit.

The audit did not re-perform the valuations done for individual properties that were acquired by Sydney Metro. Affected parties who disagree with the valuation of their property have the right to seek independent assessment of this via the Valuer General and the Land and Environment Court.

This chapter presents our findings on Sydney Metro's acquisition of industrial and commercial properties. Industrial properties include construction businesses and manufacturing facilities. Commercial properties were mostly properties such as shopping centres and office towers. Many of these acquisitions involve businesses and properties that are relatively complex and have high values. This means the valuation process can require multiple experts and can be lengthy and contested. Adherence to governance and probity requirements is important for these acquisitions in order to demonstrate that the acquiring authority has achieved value for money.

This chapter presents our findings on Sydney Metro's acquisition of residential properties, which include apartments and houses, and small business leases, which mostly affected businesses in small shopping centres or arcades. Most of these acquisitions were lower value compared to industrial and commercial property acquisitions and did not require as much expert advice on complex technical issues. However, residential property acquisitions can be personally distressing for the affected parties and require staff from the acquiring authority to provide support and show empathy while ensuring legislative compliance and value for money.

Appendix one – Responses from agencies

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 #375 - released 9 February 2023

What the report is about

The Bushfire Local Economic Recovery (BLER) program was created after the 2019–20 bushfires, and commits $541.8 million to bushfire affected areas in New South Wales. It is co-funded by the Commonwealth and NSW governments.

This audit assessed how effectively the Department of Regional NSW (the department) and Resilience NSW administered rounds one and two of the BLER program. These rounds were:

• Round one: early co-funding, split between two streams:
  • ­Fast-Tracked projects 
  • ­Sector Development Grants (SDG)
• Round two: open round.

What we found

The Department of Regional NSW did not effectively administer the Fast-Tracked stream of the BLER. 

The administration process lacked integrity, given it did not have sufficiently detailed guidelines and the assessment process for projects lacked transparency and consistency. 

At the request of the Deputy Premier's office, a $1 million threshold was applied, below which projects were not approved for funding. The department advises that some of the projects excluded were subsequently funded from other programs. 

This threshold resulted in a number of shortlisted projects in areas highly impacted by the bushfires being excluded, including all shortlisted projects located in Labor Party-held electorates.

The department's administration of the SDG stream had a detailed and transparent assessment process. However, conflicts of interest were not effectively managed. 

The department's administration of the open round included a clearly documented, detailed and transparent assessment framework. Some weaknesses in the approach to conflicts of interest remained.

What we recommended

The Department of Regional NSW should ensure that for all future grant programs it:

1. establishes and follows guidelines that align with relevant good practice guidance 
2. ensures a communications plan is in place, including the communication of guidelines to potential applicants
3. ensures staff declare conflicts of interest prior to the commencement of a grants stream, and that these conflicts of interest are recorded and managed
4. ensures regular monitoring is in place as part of funding deeds 
5. documents all key decisions and approvals in line with record keeping obligations.

This audit assessed how effectively the Department of Regional NSW and Resilience NSW administered rounds one and two of the Bushfire Local Economic Recovery (BLER) program.

As noted in this report, Resilience NSW was involved in the set-up and ongoing administration and monitoring of the BLER program. During the audited period, Resilience NSW was tasked with working with the Department of Regional NSW to create program objectives, guidelines and criteria. Their role also involved liaising with the Commonwealth Government, which provided co-funding for the program. Resilience NSW also had an ongoing role in quality assurance and compliance to ensure agencies administering disaster assistance did so in accordance with relevant guidelines. On 16 December 2022, the NSW Government abolished Resilience NSW.

Our work for this performance audit was completed on 3 November 2022, when we issued the final report to the two audited agencies. The audit report does not make specific recommendations to Resilience NSW. On 24 November 2022, the then Commissioner of Resilience NSW provided a response to the final report, which we include as it is the formal response from the audited entity at the time the audit was conducted.

During the 2019–20 bushfire season, New South Wales experienced 11,774 fire incidents, burning 5.5 million hectares of the state. There were 26 fatalities and 2,476 homes destroyed. The agriculture sector was heavily impacted with 601,858 hectares of pasture damaged.

Due to the widespread impacts of these fires on the state, the NSW and Commonwealth governments committed $4.4 billion toward bushfire response, recovery, and preparedness. This included the establishment of the Bushfire Local Economic Recovery (BLER) program, with $541.8 million committed to support job retention and creation in areas impacted by bushfires. The program also aims to strengthen community resilience and reduce the impact of future natural disasters. The BLER program is co-funded, with the Commonwealth and NSW governments funding 50% each.

The BLER program is comprised of three funding rounds:

• round one early co-funding, split between
  • Fast-Tracked projects
  • Sector Development Grants (SDG)
• round two: open round
• round three: final projects and initiatives.

Resilience NSW was involved in setting up the BLER program and the Department of Regional NSW (the department) is responsible for administering it. The Commonwealth National Recovery and Resilience Agency must also endorse any projects proposed by the NSW Government for funding as part of the funding agreement between the State and Commonwealth governments.

Successful projects under the SDG stream were announced in September 2020 and projects funded through the Fast-Tracked stream were announced in October 2020. Round two (the open round) was administered after these two streams and successful projects were announced in June 2021.

The Department of Premier and Cabinet established the 'Good Practice Guide to Grants Administration' (the Good Practice Guide) in 2010 to assist the NSW Government in ensuring grants administration was performed consistently across all NSW Government grants programs. Compliance with the Good Practice Guide was not compulsory, but provided an outline of best practice covering the entire lifecycle of a grants program. This guide was in place at the time these grants were designed and administered.

The design and delivery of round one of the program occurred quickly, as part of the response to the 2019–20 bushfires, and was responding to a request from the Commonwealth Government for rapid project identification.

The objective of this audit was to assess how effectively the Department of Regional NSW and Resilience NSW administered rounds one and two of the BLER program. Round three was excluded from this audit because it had not been announced at the time of the audit.

We addressed this objective by examining whether the audited agencies:

• effectively planned administration of the BLER program and established appropriate guidelines
• implemented an effective assessment process for the BLER program
• are effectively monitoring implementation of projects and program outcomes.

1. Recommendations

To promote integrity and transparency, the Department of Regional NSW should ensure that for all future grant programs it:

1. establishes and follows guidelines that align with relevant good practice guidance including accountabilities, key assessment steps and clear assessment criteria
2. ensures a communications plan is in place, including the communication of guidelines to potential applicants
3. ensures staff declare conflicts of interest prior to the commencement of a grants stream, and that these conflicts of interest are recorded and managed
4. ensures regular monitoring is in place as part of funding deeds
5. documents all key decisions and approvals in line with record keeping obligations.

Stage one of the BLER program consisted of early co-funded projects valued at a total of $180 million. This included 22 Fast-Tracked priority projects valued at a total of $107.8 million. The purpose of these projects was to deliver immediate and significant economic impacts to high and moderate bushfire-impacted areas.

A timeline of key dates may be found at Exhibit 5.

Fifty-two projects worth a total of $73.2 million were funded through the SDG stream. One grantee withdrew their project from the stream in early 2021, leaving a total of 51 projects (of which 49 are co-funded with the Commonwealth Government).

A timeline of key dates may be found at Exhibit 9.

The department distributed $283 million to 195 successful projects as part of the open round of the BLER program.

A timeline of key dates may be found at Exhibit 11.

The department entered into funding deeds with successful applicants

The Good Practice Guide advises that the agency administering a grant should enter into a formal agreement with each grant recipient which sets out the arrangements under which a grant is provided, received, managed and acquitted. Across all three streams, the department sent out a letter of offer to successful project managers to let them know that they had been successful in receiving funding, and then entered into funding deeds with grantees. The one exception was the project that RNSW managed, discussed below.

The reviewed funding deeds were signed by department staff with the appropriate level of delegation. They contained an appropriate level of information and key clauses that would allow the department to monitor the progress of the grant to ensure its completion as agreed with the grantee. The reviewed funding deeds contained key information, including:

• total value of the grant
• key deliverables at each milestone
• expected completion date of both the overall project and each milestone
• reporting requirements, including provisions to allow the department to request relevant information
• variation procedures.

The department only makes payments after confirming that milestones have been reached

The department has provided payments to grantees only after they could demonstrate that they had completed the agreed milestone. To ensure each milestone has been completed, the department requires grantees to provide evidence that they have fulfilled the milestone. Types of evidence provided includes photographs and invoices. Where the grantee provides insufficient evidence to the department, the department follows-up with the grantee to ensure that enough information is provided to justify the milestone payment.

The department also plans to undertake site visits of projects at select milestones and at the completion of most projects. The department has undertaken a risk assessment of each SDG and open round project, and uses this risk assessment to determine the number of milestones for the project, as well as the number of site visits that the department will undertake. Fast-Tracked projects all had PWA providing either project management or assurance and as such oversight is being provided through that mechanism. The milestones and site visits at each level of risk can be seen in Exhibit 15 for SDG and Exhibit 16 for open round.

The department does not monitor quarterly progress for SDG grants

As part of the LER framework, the department reports to the Commonwealth every quarter on the status and financials of each project, including whether there are any risks to project delivery and the mitigations in place for those risks. For projects funded through the Fast-Tracked stream and the open round, the department collects quarterly progress reports from the grantees. These progress reports allow the department to determine if there are project risks, which can then be reported to the Commonwealth. The progress reports also allow the department to determine if a milestone is likely to be met within the next quarter or whether a project variation may be needed.

While the department monitors projects funded through the Fast-Tracked stream and the open round on a quarterly basis, there is no quarterly monitoring of progress for projects funded through the SDG stream. The SDG funding deeds do not include a provision to require quarterly reporting to the department. The department only collects progress reports from grantees when the grantee reports that it has completed a milestone. Quarterly monitoring of the SDG stream would allow the department to determine if projects require corrective action.

Resilience NSW is not collecting quarterly reports for the Fast-Tracked grant it is responsible for administering

One of the projects funded through the Fast-Tracked stream was the rebuilding of three local halls across two LGAs, for a total value of $3 million. RNSW is responsible for managing this grant and entered into funding deeds with the relevant councils. It is not documented why RNSW is responsible for these funding deeds rather than the department, which is the signatory for all of the other Fast-Tracked stream funding deeds. RNSW advised it was due to the responsible RNSW Director having a strong working relationship with the relevant councils.

The funding deeds which RNSW signed with the relevant councils set out a requirement that the councils would report on this project to RNSW every quarter. The second milestone of each of these projects involved the submission of a quarterly report. However, RNSW was unable to provide evidence that it carried out this monitoring of the project. At the time of the audit, no second milestone payment had been made. Undertaking quarterly monitoring would provide RNSW with assurance that the money is being expended for the proper purpose and whether the projects will be completed by the target date.

RNSW and the relevant councils developed project control groups for each project, which allows it to monitor the implementation of the projects. PWA is also represented on these project control groups and provides an advisory role in the implementation of the projects.

RNSW and the department advised that responsibility for this project will be transitioned to the department and it will be monitored on a quarterly basis, in line with the other Fast-Tracked projects.

The department has a consistent approach to validating variations

The department's funding deeds with grantees allow for the variation of contracts at the department's discretion after the grantee has written to the department. It is important for the department to consider the impact of any project variation request on the overall program objectives, because a project which costs more than was originally planned or which takes additional time may put at risk the objectives of the BLER program. To ensure that requests for variation are handled consistently and appropriately, the department's Grants Management Office (GMO) has developed a process document which applies to variation requests across the BLER program.

For the grants reviewed as part of this audit, the GMO applied this variation process consistently and has documented the outcomes. Larger variations are reviewed at a higher level of delegation and sign-off. To determine whether a variation is accepted, the GMO considers the following factors:

• consistency with BLER program objectives
• delivery within the timeframes of the BLER program
• eligibility under the BLER program guidelines
• financial viability to deliver within the requested budget.

The department is preparing multiple evaluations, but it has delayed its process evaluation

When developing round one of the BLER program, the department developed an evaluation plan. A total of $1.1 million has been reserved for conducting process, outcome, and economic evaluations of the BLER program and two other bushfire recovery grant programs.

To assist with evaluating program outcomes and economic impact, the department is planning a post-completion survey in 2023–24. This timeline will allow most projects to be completed and enough time for project outcomes to be realised. The department advised that the data collected through this survey would allow the department to determine whether the BLER program has achieved its objectives, as it includes information such as the number of jobs created through each project.

The process evaluation was initially planned for March to June 2021. This would have aligned with the announcement of the open round funding and would have allowed for the learnings from rounds one and two of the BLER program to be applied to the development of round three. However, the department did not conduct this evaluation in a timely way. The department advised that this was because funding deed negotiations were still ongoing, and the department was waiting for 50% of funding deeds to be signed. Given this, the department was not in a position to commence its process evaluation. In December 2021, the department revised its evaluation plan and advised that it commenced its process evaluation in April 2022. It is unlikely that this will allow time for the department to apply learnings to round three, which is currently underway.

Appendix one – Responses from agencies

Appendix two – BLER program distribution

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 #373 - released 2 February 2023

What the report is about

The Transport Asset Holding Entity (TAHE) is the State's custodian of rail assets. It is a state owned corporation and commenced operating on 1 July 2020.

This audit assessed the effectiveness of NSW Government agencies' design and implementation of TAHE. We audited TAHE, Transport for NSW (TfNSW) and NSW Treasury.

Separate and related audits on TAHE are reported in 'State Finances 2022', 'State Finances 2021' and 'Transport and Infrastructure 2022' reports.

What we found

The design and implementation of TAHE, which spanned seven years, was not effective.

The process was not cohesive or transparent. It delivered an outcome that is unnecessarily complex in order to support an accounting treatment to meet the NSW Government's short-term Budget objectives, while creating an obligation for future governments.

The benefits of TAHE were claimed in the 2015–16 NSW Budget before the enabling legislation was passed by Parliament in 2017. This committed the agencies to implement a solution that justified the 2015–16 Budget impacts, regardless of any challenges that arose.

Rail safety arrangements were a priority throughout TAHE's design and implementation, and risks were raised and addressed.

Agencies relied heavily on consultants on matters related to the creation of TAHE, but failed to effectively manage these engagements. Agencies failed to ensure that consultancies delivered independent advice as an input to decision-making. A small number of firms were used repeatedly to provide advice on the same topic. The final cost of TAHE-related consultancies was $22.6 million compared to the initial estimated cost of $12.9 million.

What we recommended

We recommended that the audited agencies should:

• improve accountability and transparency for major new fiscal transformation initiatives
• ensure entities do not reflect the financial impact of significant initiatives in the Budget when there is uncertainty, or it creates perverse incentives
• review record keeping practices, systems and policies to ensure compliance with the State Records Act 1998, and the NSW Government Information Classification, Labelling and Handling Guidelines
• review procurement policies to ensure that consultant use complies with all NSW Government policy requirements.

The NSW Government established the Transport Asset Holding Entity (TAHE), a statutory State Owned Corporation (SOC), on 1 July 2020 to replace the former rail infrastructure owner – RailCorp. It is the State's custodian of rail network assets, including rail tracks and other infrastructure, rolling stock, land, train stations and facilities, retail space, and signal and power systems, within metropolitan and regional New South Wales. It is responsible for $2.8 billion of major capital projects in 2022–23.

TAHE was established under Part 2 of the Transport Administration Act 1988 and is governed by a decision-making board. The Treasurer and the Minister for Finance and Employee Relations are the Shareholding Ministers of TAHE, and they annually agree performance expectations articulated in a Statement of Corporate Intent.

Whereas TAHE is the custodian of rail assets, Sydney Trains and NSW Trains operate public rail services. TAHE does not have responsibility for the operation of the heavy rail network or train services, nor does it have network control functions. TAHE, Sydney Trains and NSW Trains are in the Transport and Infrastructure cluster in the public sector (formerly the Transport cluster and renamed in April 2022), which also includes Sydney Metro and Transport for NSW (TfNSW).

TfNSW leads the Transport and Infrastructure cluster. Its role is to set the strategic direction for transport across the State. This involves the shaping of planning, policy, strategy, regulation, resource allocation and other service and non-service delivery functions for all modes of transport.

TAHE's Operating Licence is granted by the Portfolio Minister and authorises the entity to perform the functions required to acquire, develop, finance, divest and hold assets, pursuant to the Transport Administration Act 1988. The Portfolio Minister also issues a Statement of Expectations which outlines the government’s expectation for the business for the next three to five years.

TAHE's original Portfolio Minister was the Minister for Transport who approved, on 30 June 2020, the issuing of an interim 12-month Operating Licence to enable TAHE to commence operating on 1 July 2020. The Portfolio Minister then granted TAHE's current Operating Licence in 2021. After TAHE requested a 12-month extension to its current Operating Licence, its next Operating Licence is due on 1 July 2024. The current Portfolio Minister is the Minister for Infrastructure, Cities and Active Transport.

About this audit

This audit assessed the effectiveness of NSW Government agencies' design and implementation of TAHE. In making this assessment, we considered whether: 

• the process of designing and implementing TAHE was cohesive and transparent, and delivered an effective outcome
• agencies' roles and responsibilities were clear in the planning of TAHE
• agencies effectively identified and managed certain risks.

Appendix one – Responses from audited agencies, and Audit Office clarification of matters raised in the TAHE formal response 

Appendix two – Classification of government entities 

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 #372 - released 24 January 2023

What the report is about

The Aboriginal Land Rights Act 1983 (NSW) (the Act) provides land rights over certain Crown land for Aboriginal Land Councils in NSW.

If a claim is made over Crown land (land owned and managed by government) and meets other criteria under the Act, ownership of that land is to be transferred to the Aboriginal Land Council.

This process is intended to provide compensation for the dispossession of land from Aboriginal people in NSW. It is a different process to the recognition of native title rights under Commonwealth law.

We examined whether relevant agencies are effectively facilitating and administering Aboriginal land claim processes. The relevant agencies are:

• Department of Premier and Cabinet (DPC)
• Department of Planning and Environment (DPE)
• NSW Aboriginal Land Council (NSWALC).

We consulted with Local Aboriginal Land Councils (LALCs) and other Aboriginal community representative groups to hear about their experiences.

What we found

Neither DPC nor DPE have established the resources required for the NSW Government to deliver Aboriginal land claim processes in a coordinated way, and which transparently commits to the requirements and intent of the Act.

Delays in determining land claims result in Aboriginal Land Councils being denied the opportunity to realise their statutory right to certain Crown land. Delays also create risks due to uncertainty around the ownership, use and development of Crown land.

DPC has not established governance arrangements to ensure accountability for outcomes under the Act, and effective risk management.

DPE lacks clear performance measures for the timely and transparent delivery of its claim assessment functions. DPE also lacks a well-defined framework for prioritising assessments.

LALCs have concerns about delays, and lack of transparency in the process.

Reviews since at least 2014 have recommended actions to address numerous issues and improve outcomes, but limited progress has been made.

The database used by DPC (Office of the Registrar) for the statutory register of land claims has not been upgraded or fully validated since the 1990s.

In 2020, DPE identified the transfer of claimable Crown land to LALCs to enable economic and cultural outcomes as a strategic priority. DPE has some activities underway to do this, and to improve how it engages with Aboriginal Land Councils – but DPE still lacks a clear, resourced strategy to process over 38,000 undetermined claims within a reasonable time.

What we recommended

In summary:

• DPC should lead strategic governance to oversee a resourced, coordinated program that is accountable for delivering Aboriginal land claim processes
• DPE should implement a resourced, ten-year plan that increases the rate of claim processing, and includes an initial focus on land grants
• DPE and DPC should jointly establish operational arrangements to deliver a coordinated interagency program for land claim processes
• DPC should plan an interagency, land claim spatial information system, and the Office of the Registrar should remediate and upgrade the statutory land claims register
• DPC and NSWALC should implement an education program (for state agencies and the local government sector) about the Act and its operations
• DPE should implement a five-year workforce development strategy for its land claim assessment function
• DPE should finalise updates to its land claim assessment procedures
• DPE should enhance information sharing with Aboriginal Land Councils to inform their claim making
• NSWALC should enhance information sharing and other supports to LALCs to inform their claim making and build capacity.

The return of land under the Aboriginal Land Rights Act 1983 (NSW) (the Act) is intended to provide compensation for the dispossession of land from Aboriginal people in New South Wales. A claim on Crown land¹ made by an Aboriginal Land Council that meets criteria under the Act is to be transferred to the claimant council as freehold title. The 2021 statutory review of the Act recognises the spiritual, social, cultural and economic importance of land to Aboriginal people.

The Minister for Aboriginal Affairs administers the Act, with support from Aboriginal Affairs NSW (AANSW) in the Department of Premier and Cabinet (DPC). AANSW also leads the delivery of Opportunity, Choice, Healing, Responsibility and Empowerment (OCHRE), the NSW Government's plan for Aboriginal affairs, and assists the Minister to implement the National Agreement on Closing the Gap – which includes a target for increasing the area of land covered by Aboriginal and Torres Strait Islander people's legal rights or interests.

The Act gives responsibility for registering land claims to an independent statutory officer, the Registrar of the Aboriginal Land Rights Act (the Registrar), whose functions are supported by the Office of the Registrar (ORALRA) which is resourced by AANSW.²

The Land and Environment Court of New South Wales has stated that there is an implied obligation for land claims to be determined within a reasonable time. The Minister administering the Crown Land Management Act 2016 (NSW) is responsible for determining land claims. This function is supported by the Department of Planning and Environment (DPE),³ whose staff assess and recommend claims for determination based on the criteria under section 36(1) of the Act. There is also a mechanism under the Act for land claims to be negotiated in good faith through an Aboriginal Land Agreement.

The NSW Aboriginal Land Council (NSWALC) is a statutory corporation constituted under the Act with a mandate to provide for the development of land rights for Aboriginal people in NSW, in conjunction with the network of 120 Local Aboriginal Land Councils (LALCs). LALCs are constituted over specific areas to represent Aboriginal communities across NSW. Both NSWALC and LALCs can make land claims.

DPC and DPE are responsible for governance and, in partnership with NSWALC, operational and information-sharing activities that are required to coordinate Aboriginal land claim processes. LALCs, statutory officers, government agencies, local councils, and other parties need to be engaged so that these processes are coordinated effectively and managed in a way that is consistent with the intent of the Act, and other legislative requirements.

The first land claim was lodged in 1983. The number of undetermined land claims has increased over time, and at 31 December 2021 DPE data shows 38,257 undetermined claims.

The issue of undetermined land claims has been publicly reported by the Audit Office since 2007. Recommendations to agencies to better facilitate processes and improve how functions are administered have been made in multiple reviews, including two Parliamentary inquiries in 2016.

The objective of this audit was to assess whether relevant agencies are effectively facilitating and administering Aboriginal land claim processes. In making this assessment, we considered whether:

• agencies (DPE, DPC (AANSW and ORALRA) and NSWALC) coordinate information and activities to effectively facilitate Aboriginal land claim processes
• agencies (DPE and DPC (ORALRA)) are effectively administering their roles in the Aboriginal land claim process.

We consulted with LALCs to hear about their experiences and priorities with respect to Aboriginal land claim processes and related outcomes. We have aimed to incorporate their insights into our understanding of their expectations of government with respect to delivering requirements, facilitating processes, and identifying opportunities for improved outcomes. 

Since 1983, 53,861 Aboriginal land claims have been lodged with the Registrar.²⁵

The Land and Environment Court of New South Wales has stated there is an implied obligation on the Crown Lands Minister to determine land claims within a reasonable time.²⁶

As at 31 December 2021, DPE has processed less than a third (31 per cent) of these land claims: 14,273 were determined by the Crown Lands Minister (that is, granted or refused, in whole or part) and 2,562 were withdrawn. This amounts to 16,835 claims processed, including the negotiated settlement of 15 claims through three Aboriginal Land Agreements. As a result, DPE reports that approximately 163,900 hectares of Crown land has been granted to Aboriginal Land Councils since 1983 up to 31 December 2021.

There are 38,257 land claims awaiting determination, which cover about 1.12 million hectares of Crown land.

The 2017 report on the statutory review of the Act noted that the land claims ‘backlog’ was one of the ‘Top 5’ priorities identified by LALCs during consultations. The importance of this issue is consistent with findings from our consultations with LALCs in 2021 (see Exhibit 7).

Delays in delivering on the statutory requirement to determine land claims, and limited use of other mechanisms to process claims in consultation or agreement with NSWALC and LALCs, undermines the beneficial and remedial intent of Aboriginal land rights under the Act. It also:

• impacts negatively on DPE’s ability to comply with the statutory requirement to determine land claims, because often the older a claim becomes the more difficult it can be to gather the evidence required to assess it
• creates uncertainty around the ownership, use and development of Crown land, which can have financial impacts on Aboriginal Land Councils, government agencies, local councils and developers.

Risks that arise in the context of undetermined claims are discussed further in section 3.3.

NSW Treasury describes public sector governance as providing strategic direction, ensuring objectives are achieved, and managing risks and the use of resources responsibly with accountability.

Consistent with the NSW Treasury’s Risk Management Toolkit (TPP-12-03b), governance arrangements for Aboriginal land claim processes should ensure their effective facilitation and administration. That is, arrangements are expected to contribute to and oversee the performance of administrative processes and service delivery towards outcomes, and ensure that legal and policy compliance obligations are met consistent with community expectations of accountability and transparency.

DPC and DPE are responsible for governance and, in partnership with NSWALC, operational and information-sharing activities required to coordinate Aboriginal land claim processes. LALCs, statutory officers, government agencies, local councils, and other parties (such as native title groups and those with an interest in development on Crown land) need to be engaged so that these processes are coordinated effectively with risks managed – consistent with the intent of the Act, and other legislative requirements.

Policy commitments to Aboriginal people and communities made by the NSW Government in the OCHRE Plan and Closing the Gap priority reforms establish an expectation for culturally informed governance.

The Crown Lands Minister, supported by DPE, is required to determine whether Aboriginal land claims meet the criteria to be ‘claimable Crown lands’ under section 36(1) of the Act. DPE staff within its Crown Lands division are responsible for assessing land claims and preparing recommendation briefs to the Crown Lands Minister, or their delegate, on determination outcomes. That is, on whether to grant or refuse the claim.³⁸ DPE staff also make decisions about which land claims within the large number of undetermined claims should be processed first.

Appendix one – Response from agencies

Appendix two – About the audit

Appendix three – Performance auditing

Banner image used with permission.
Title: Forces of Nature
Artist: Lee Hampton – Koori Kicks Art

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 #365 - released 28 April 2022.

What the report is about

The report focuses on how effectively the Department of Customer Service (DCS) and Department of Planning and Environment (DPE) led reforms addressing the unsafe use of combustible external cladding on existing residential and public buildings.

Nine local councils were included in the audit because they have responsibilities and powers needed to implement the NSW Government’s reforms.

What we found

After the June 2017 Grenfell Tower fire in London, the NSW Government committed to a ten-point action plan, which included establishing the NSW Cladding Taskforce, chaired by DCS, and with DPE as a key member. The Taskforce co-ordinates and oversees the implementation of the plan.

Depending on the original source of development approval, either individual local councils or DPE are responsible for ensuring that buildings are identified, assessed, and remediated. NSW Government-owned buildings are the responsibility of each department.

Identifying buildings potentially at risk was complex and resource intensive. However, on balance, it is likely that most affected buildings have now been identified.

By October 2021, around 40 per cent of assessed high-risk buildings that are the responsibility of local councils had either been remediated or found not to pose an unacceptable fire risk.

By February 2022, almost 50 per cent of affected NSW Government-owned buildings, and 90 per cent of buildings that are the responsibility of DPE, have either been cleared or are in the process of being remediated.

Earlier guidance on some key issues could have been provided by DCS and DPE in the two years after the Grenfell Tower fire. This may have reduced confusion and inconsistency across local councils we audited, and in some NSW Government departments. This especially relates to the application of the Fair Trading Commissioner's product use ban.

Given the inherent risks posed by combustible external cladding, buildings initially assessed as low-risk may also still warrant further action.

While most high-risk buildings have likely been identified, poor information handling makes it difficult to keep track of all buildings from identification, through to risk assessment and remediation.

What we recommended

DCS and DPE should:

1. address the confusion surrounding the application of the Commissioner for Fair Trading's product use ban for aluminium composite panels with polyethylene content greater than 30 per cent
2. develop an action plan to address buildings assessed as low-risk
3. improve information systems to track all buildings from identification through to remediation.

NSW Government's response to the risks posed by combustible external cladding

The NSW Government first became aware of the potential heightened risks posed by combustible external cladding on building exteriors after the 2014 Lacrosse Tower fire in Melbourne. However, it was the tragic loss of life from the Grenfell Tower fire in London, in June 2017, that gave added urgency to the need to address these risks.

Within six weeks of the London fire, the NSW Government committed to a ten-point plan of action for NSW to:

• identify and remediate any buildings with combustible external cladding
• ensure that regulation prevented the unsafe use of such cladding
• ensure that experts involved in providing advice and certifying fire safety measures had the necessary skills and experience.

One of the actions in the ten-point plan was the creation of the NSW Government's Fire Safety and External Wall Cladding Taskforce (the Cladding Taskforce) chaired by the Department of Customer Service (DCS) and with the Department of Planning and Environment (DPE) as a key member.

The ten-point plan also specified that NSW Government departments would be responsible, in regard to buildings they owned to '…audit their buildings and determine if they have aluminium cladding'.

Local councils play a key role in implementing the Government's reforms, given their responsibilities and powers under the Environmental Planning and Assessment Act 1979 (EPA Act) and Local Government Act 1993 (Local Government Act) to approve building works (as 'consent authorities'), as well as to ensure fire safety standards are met. DPE plays an equivalent role for a smaller number of 'State Significant Developments' for which it is the consent authority under delegation from the Minister for Planning.

Commissioner for Fair Trading's building product use ban

On 18 December 2017, the Building Products (Safety) Act 2017 (BPS Act) came into effect in NSW, introducing new laws to prevent the use of unsafe building products. Notably, the BPS Act gave the Secretary of DCS and the Commissioner for Fair Trading the power to ban unsafe uses of building products.

After an extensive consultative process, the Commissioner for Fair Trading used these powers to issue a product use ban on 15 August 2018. This banned the use of external wall cladding of aluminium composite panels with a core comprised of more than 30 per cent polyethylene by mass on new buildings, unless the proposed use was subject to independent fire propagation testing of the specific product and method of application to a building in accordance with relevant Australian Standards.

Buildings occupied before the product use ban came into force are not automatically required to have the banned product removed. Under the BPS Act, consent authorities may determine necessary actions to eliminate or minimise the risk posed by the banned material on existing buildings.

Project Remediate

Project Remediate is a three-year NSW Government program announced in November 2020. The program was designed by the NSW Government to assist building owners of multi-storey apartments (two storeys or more) with high-risk combustible cladding to remediate their building to a high standard and for a fair price.

The scheme is voluntary and includes government paying for the interest on ten-year loans, as well as incorporating assurance and project management services to provide technical and practical support to owners’ corporations and strata managing agents. Building remediations under the program are expected to commence in 2022.

About this audit

This audit assessed whether DCS and DPE effectively led reforms to manage the fire safety risk of combustible external cladding on existing residential and public buildings.

In making this assessment, we considered whether the expressed policy intent of the NSW Government's ten-point plan for fire safety reform had been achieved by asking:

• are the fire safety risks of combustible external cladding on existing buildings identified and remediated?
• is there a comprehensive building product safety scheme that prevents the dangerous use of combustible external cladding products on existing buildings?
• is fire safety certification for combustible external cladding on existing buildings carried out impartially, ethically and in the public interest by qualified experts?

Consistent with the focus of the Cladding Taskforce on multi-storey residential buildings and public buildings, the scope of our audit is limited to buildings categorised under the Building Code of Australia (BCA) as class 2, 3 and 9. These classes are defined in detail in section 1.2, but include: multi-unit residential apartments, hotels, motels, hostels, back-packers, and buildings of a public nature, including health care buildings, schools, and aged care buildings. The scope was also limited to existing buildings, which is defined as buildings occupied by 22 October 2018.

Auditees

The Department of Customer Service chairs the NSW Government's Cladding Taskforce, which is responsible for coordinating the combustible external cladding reforms. The Commissioner of Fair Trading sits within DCS and DCS regulates the industry accreditation scheme for fire safety practitioners, as well as administering the BPS Act.

The Department of Planning and Environment administers the EPA Act and the Environmental Planning and Assessment Regulation 2000 (EPA Regulation), which regulate the building development process. As well as being the delegated consent authority for State Significant Developments, DPE is also responsible for maintaining the mandatory cladding register requiring building owners of multi-storey (BCA class 2, 3 or 9) buildings to register buildings with combustible external cladding on an online portal.

Functions and responsibilities between DCS and DPE varied over time. For example, in October 2019, the DPE building policy team responsible for co-ordinating the DPE response to the combustible cladding issue was transferred to DCS, following changes to agency responsibilities resulting from machinery of government changes. DPE advised this resulted in a lessening of DPE's subsequent policy work on combustible cladding and its involvement in the Cladding Taskforce.

While the focus of the audit was on the oversight and coordination provided by DCS and DPE, nine councils were also auditees for this performance audit. Councils play an essential part as consent authorities for building development approvals in NSW, as well as having responsibilities and powers to ensure fire safety standards. To fully understand how well their activities were overseen and coordinated, a sample of councils was included as auditees.

Nine councils were selected to represent both metropolitan and regional areas, noting that there are very few in-scope buildings in rural areas. The audited councils were:

• Bayside Council
• City of Canterbury Bankstown Council
• Cumberland City Council
• Liverpool City Council
• City of Newcastle Council
• City of Parramatta Council
• City of Ryde Council
• City of Sydney Council
• Wollongong City Council.

Terminology

The two NSW Government department auditees have, over time, been subject to machinery of government changes, which have changed some of their functions and what the departments are called.

Relevant to this audit, the effect of these changes has been:

• the Department of Finance, Services, and Innovation (DFSI) became the Department of Customer Services (DCS) on 1 July 2019
• on 1 July 2019, the Department of Planning and Environment became the Department of Planning, Industry, and Environment (DPIE)
• on 21 December 2021, DPIE became the Department of Planning and Environment (DPE).

To avoid confusion, we use the titles by which these departments are known at the date of this report: the Department of Customer Service and the Department of Planning and Environment.

This chapter considers the part played by DCS and DPE as key members of the Cladding Taskforce in ensuring that buildings with combustible external cladding were effectively identified and remediated through processes implemented by:

• local councils or DPE, where those bodies were consent authorities under the EPA Act for the relevant buildings
• in the case of NSW Government buildings, the departments that owned those buildings.

This chapter considers what has been done to deliver a comprehensive building product safety scheme that prevents the dangerous use of combustible external cladding products.

This chapter considers whether reforms have ensured that only people with the necessary skills and experience are certifying buildings and signing off on fire-safety.

Inspections of existing buildings and development of any subsequent action plans to address combustible external cladding are not activities covered by accreditation or registration schemes for building certifiers

Almost all the risk assessment and remediation work done on buildings in the scope of this audit have been undertaken under fire safety orders issued by consent authorities using their powers under the EPA Act. This has been the recommended approach by DPE and DCS since at least 2016 (that is, before the Grenfell Tower fire in London).

While there have been reforms to certifier registrations scheme, these were not intended to ensure that combustible cladding-remediation on existing buildings is supported by people with the necessary skills and experience in fire safety under the fire safety order process. Instead, they are focused on offering better assurance for work done in respect to new building projects where accredited experts certify that building work is carried out in accordance with BCA under the DCS managed certifier registration schemes.

No steps have been taken to ensure the quality of the work done by experts inspecting, assessing the fire risk and developing action plans to address combustible external cladding on existing buildings, other than where consent authorities have chosen to exercise their discretion. This includes requiring fire safety experts to be appropriately qualified and requiring peer review of some cladding risk assessments and remediation plans.

Consent authorities determine whether individuals with accreditation are required for combustible cladding inspection, risk assessments and remediation on existing buildings

Whether an individual with certifier accreditation participates in a cladding inspection, risk assessment, or remediation for an existing building will be determined by what councils as consent authorities specify in their fire safety orders unless building owners opt to use such experts without being directed to do so by the consent authority.

As discussed earlier, councils acting as consent authorities vary in whether they require building owners to engage individuals with certifier accreditation. In most of the councils we audited, A1 or C10 accredited experts were either required, or recommended, to perform functions such as auditing suspected combustible cladding, or conducting fire safety risk assessments and developing plans to rectify combustible cladding.

However, these types of work are not functions covered by the accreditation or registration schemes that apply to building and development certifiers.

Certifier accreditation schemes do not cover cladding remediation work done under fire safety orders

While councils may require or recommend that independent accredited A1 or C10 certifiers be engaged by building owners for cladding risk assessment and remediation, they are not performing those functions as certifiers — they are, in effect, more akin to expert consultants. Accordingly, how they perform their functions and duties is not covered by the legislation supporting the accreditation scheme for certifiers that was operated until July 2020 by the Building Professional Board.

Instead, their use in this process is a convenient and practical way for consent authorities to ensure that building owners use appropriate experts who have the qualifications, skills and experience needed to investigate and identify combustible cladding, and then to formulate appropriate action to deal with such cladding. However, these individuals are not performing regulated or accredited work, are not subject to regulatory oversight, and are not accountable to any accreditation body for the quality of the work they perform.

While councils could (and sometimes do) choose to decline poor quality or incomplete cladding-related work prepared by A1 or C10 certifiers, the burden of resolving poor quality would fall on the building owner, who would have to seek amended or additional risk assessments or rectification plans.

In the absence of regulatory oversight, disincentives for poor quality cladding-related work, may include litigation being commenced by the property owner, harm to the expert's reputation in a small and competitive market, and the potential impact on whether the individual could retain their professional indemnity insurance at a reasonable cost (especially in an environment when many insurance providers withdrew coverage for cladding related work).

Reforms impact on regulated experts doing work on new buildings

The reforms that commenced on 1 July 2020, replaced categories of accreditation with classes of registration, and varied the classes such that:

• accredited building surveyor category A1 became registered building surveyor-unrestricted
• accredited certifier—fire safety engineer category C10 became registered certifiers-fire safety.

The legislation that introduced these reforms, the Building and Development Certifiers Act 2018, also repealed the pre-existing Building Professionals Act 2005 and abolished the Building Professionals Board. The new Act was accompanied by the Building and Development Certifiers Regulation 2020.

While the scope of this audit is limited to existing buildings, we note that there are buildings with combustible external cladding that are yet to be remediated. Just as these processes previously drew on the expertise of A1 and C10 category certifiers, it seems inevitable that the remediation of existing buildings will continue to draw on the expertise of the equivalent new classes of registered building surveyor-unrestricted and registered certifier-fire safety.

Appendix one – Response from agencies

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 #364 - released 13 April 2022.

What the report is about

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

This audit looked at whether three campaigns run by Destination NSW (DNSW) during 2020–21 were carried out in an effective, economical and efficient manner:

• Love Sydney (comprising two sub campaigns being ‘Sydney - Love It Like You Mean It’ and ‘Get Your Sydney On’)
• Love NSW
• Road Trips. 

What we found

DNSW complied with section 6 of the Government Advertising Act 2011 (the Act), prohibiting political content.

The Act requires the head of an agency to sign a compliance certificate that certifies that the campaign complies with the Act and is an efficient and cost effective means of achieving its public purpose. 

When the Acting Chief Executive of DNSW signed DNSW’s compliance certificate, evidence to support this certification was not available.

The Act requires a peer review and cost benefit analysis for campaigns over $1.0 million. DNSW did not complete the peer review or cost-benefit analysis for the audited advertising campaigns before they had concluded. 

The Department of Customer Service (DCS), which manages the peer review process, did not escalate the issue of the outstanding peer review documentation to senior DNSW staff. 

DNSW did not set targets for all measures established for the campaigns. This limits the ability to assess their effectiveness.

The impact of the COVID-19 pandemic likely contributed to the campaigns not meeting a substantial proportion of established outcome and impact targets.

None of the audited campaigns met the minimum requirement of 7.5 per cent for the allocation of the media budget for communications with Culturally and Linguistically Diverse and Aboriginal audiences.

What we recommended

DNSW should:

• implement processes for planning and delivering advertising campaigns delivered in urgent circumstances to bring them in line with NSW Government practice
• ensure that it establishes measurements and targets for outcomes and impacts of its advertising campaigns consistent with NSW Government evaluation frameworks and guidance.

The Department of Customer Service should:

• establish a policy and procedure for ensuring that campaign documentation is completed in a timely manner in the case of urgent campaigns, including establishing expectations around timeframes for the completion of peer review
• establish a procedure for escalating issues of outstanding documentation to ensure that the peer review is completed in line with reasonable expectations and timeframes.

The Government Advertising Act 2011 (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 assesses whether a government agency or agencies have carried out activities in relation to government advertising in an effective, economical and efficient manner and in compliance with the Act, the regulations, other laws and the Government Advertising Guidelines (the Guidelines). This audit examined three campaigns run by Destination NSW during the 2020–21 financial year:

• Love Sydney (comprising two sub-campaigns being ‘Sydney - Love It Like You Mean It’ and ‘Get Your Sydney On’), focussing on increasing visitor activity in Sydney
• Love NSW, focussing on increasing visitor activity in regional New South Wales
• Road Trips, focussing on encouraging visitor activity on iconic road trips in regional New South Wales.

Section 6 of the Act prohibits political advertising. Under this section, material that is part of a government advertising campaign must not contain the name, voice or image of a minister, member of Parliament or a candidate nominated for election to Parliament or the name, logo or any slogan of a political party. Further, a campaign must not be designed to influence (directly or indirectly) support for a political party.

The Act and associated regulations and the Guidelines also establish an accountability and compliance framework around the investment in advertising by NSW Government agencies.

The government's operating circumstances at the commencement of the 2020–21 financial year were highly challenging, with the 2019–20 bushfires being followed by the COVID-19 pandemic. This created new demands across a range of government services, and without any clear view on the severity of the pandemic and when it would end. This was the case for Destination NSW, which had to plan for its advertising activities in the context of an uncertain future for national border closures (impacting international in-bound travel) and lockdowns across Australia, including in New South Wales (impacting domestic travel). Further, the sudden nature of outbreaks and lockdowns meant that Destination NSW often was required to change the targeting of its campaigns and, in some situations, had to cease particular advertising activities until specific lockdowns had ended.

Campaign materials we reviewed did not contain political content

The audit team reviewed campaign materials developed as part of each of the paid advertising campaigns including radio transcripts, digital videos and display. See Appendix two for examples of campaign materials for this campaign.

Section 6 of the Act prohibits political advertising as part of a government advertising campaign. A government advertising campaign must not:

• be designed to influence (directly or indirectly) support for a political party
• contain the name, voice or image of a minister, a member of parliament or a candidate nominated for election to parliament
• contain the name, logo, slogan or any other reference to a political party.

The audit found no breaches of section 6 of the Act in the campaign material reviewed.

All reviewed campaigns were for purposes permitted by section 1.2 of the Guidelines

Section 4 of the Act states that government advertising campaigns are 'the dissemination to members of the public of information about a government program, policy or initiative, or about any public health or safety or other matter'. To support this, section 1.2 of the NSW Government Advertising Guidelines states that government advertising campaigns may only be used to achieve certain objectives. One of these objectives is to encourage changed behaviours or attitudes that will lead to improved public health and safety or quality of life.

The audit team considers that each of the reviewed advertising campaigns was consistent with this objective. This reflects the intent of each of the campaigns to increase economic activity driven by tourism activity in New South Wales, that contributes to improved quality of life for New South Wales residents.

The Acting Chief Executive signed Destination NSW's compliance certificate without supporting evidence

The Acting Chief Executive of Destination NSW signed a single compliance certificate for all Destination NSW campaigns for 2020–21 (including the three campaigns that are considered by this audit) on 28 February 2020. Evidence was not available at this date to support the statements included in the compliance certificate for the campaigns that were considered by this audit.

The compliance certificate is required by section 8 of the Act and states that the head of the agency confirms that a proposed government advertising campaign:

• complies with the Act, the regulations and the Guidelines, and
• contains accurate information, and
• is necessary to achieve a public purpose and is supported by analysis and research, and
• is an efficient and cost-effective means of achieving that public purpose.

At the time of signing the certificate in February 2020, Destination NSW had not conceived, designed or planned any of the campaigns that are considered by this audit, nor had it developed the relevant supporting information that would enable the agency to support these statements. As noted above, peer review had not commenced prior to this date. Further, Destination NSW had not completed a cost-benefit analysis or equivalent analysis.

Without any form of cost-benefit analysis or other evaluation for any of the campaigns prior to the date of signing of the compliance certificate, the Acting Chief Executive had no evidence that could support the certification that the campaigns were 'an efficient and effective means of achieving the public purpose'. The absence of peer review or a cost-benefit analysis also means that the Acting Chief Executive could not certify that the campaigns complied with the Act, the regulations or the Guidelines, nor that the campaign was supported by analysis and research.

Destination NSW did not complete peer reviews for the advertising campaigns before they ended, limiting assurance over campaign effectiveness, efficiency and economy

As all the campaigns subject to this audit were valued at over $250,000, each campaign was required to undergo peer review. The peer review is an independent review of the need for the proposed advertising campaign, the creative and media strategy (including objectives and target audiences) and how the agency will manage the campaign. Ordinarily, a peer review would be completed prior to a campaign commencing, however section 7(4) of the Act permits agencies to carry out a peer review after the advertising campaign commences 'if the head of the government agency concerned is satisfied that the campaign relates to an urgent public health or safety matter or is required in other urgent circumstances'.

DCS supported Destination NSW's assessment that these were urgent campaigns and that it would accept consideration of peer review components in parallel with the roll-out of the advertising campaigns, given the urgency of the need to generate economic activity, initially after the 2019–20 bushfires and then after the challenging circumstances brought on by the COVID-19 pandemic. This is in line with section 7(4) of the Act.

Destination NSW presented and obtained clearance on creative materials and media planning on a timely basis for two of the three campaigns (but not for the Road Trips campaign), which would ordinarily form part of peer review. However, for all campaigns, the peer reviews were not completed or signed off by DCS prior to the completion of advertising campaigns. In particular, Destination NSW did not submit material related to the accountability for campaign effectiveness, including the campaign objectives and measures before the end of the campaigns.

The absence of peer review of much of the material prior to completion of the campaigns reduces the ability of the agency and government to be confident that the advertising expenditure was consistent with NSW Government requirements, or represented efficient, effective and economical use of funds.

Destination NSW noted that section 7(4) of the Act allows the peer review to be completed after the commencement of a campaign in urgent circumstances but places no requirement on it to be completed before the end of the campaign. The audit has determined that for the peer review to meet its intended purpose, being to inform the design and delivery of the advertising campaign, it needs to be completed prior to the end of the campaign, even in urgent circumstances. DCS has supported this intent of the framework.

By the end of September 2021, DCS advised Destination NSW that it would not consider any further material for peer review related to the 2020–21 advertising campaigns. At this time, DCS closed the peer review for the Love NSW and Road Trips campaigns and assessed them as incomplete. DCS assessed the Love Sydney peer review as complete, despite noting that the campaign evaluation was not complete and with no details or confirmation of meeting culturally and linguistically diverse (CALD) advertising requirements, including for Aboriginal communities.

DCS did not escalate the issue of outstanding peer review materials

DCS worked at officer level to remind Destination NSW that peer review material was outstanding during the year. While this is appropriate as an initial point of escalation, at no time was the issue of non-compliance escalated to higher levels of management. DCS also never sent formal correspondence requesting the materials needed to ensure the completion of peer review.

DCS does not have a process for ensuring the timely completion of peer review in situations where urgency exemptions are used. There is an opportunity to formalise this process to ensure that there are appropriate escalation points and to ensure that compliance obligations are fulfilled in future.

Destination NSW did not meet the minimum requirement for allocation of the media budget for communications with CALD and Aboriginal audiences

The NSW Government 'CALD and Aboriginal Advertising Policy' stipulates that at least 7.5 per cent of an advertising campaign media budget is to be spent on direct communications to multicultural and Aboriginal audiences. Spend may be on media or non-media communication activities (e.g. events, participation at cultural festivals, direct mail, competitions and websites).

Destination NSW spent only 1.6 per cent of its media spend on culturally and linguistically diverse specific media placement on the 'Sydney - Love It Like You Mean It' campaign and none of its media placement for the other audited campaigns. This level of expenditure is substantially below the requirement.

Destination NSW could not demonstrate how its campaign designs or media placements effectively supported the cultural needs and issues of culturally and linguistically diverse populations. In connection with the 'Sydney - Love It Like You Mean It' campaign, it was noted that timeframes and production issues limited the ability to incorporate culturally diverse individuals in imagery.

Destination NSW advised that it believes the application of a 7.5 per cent threshold for specific audiences is not an effective way to reach these audiences. Destination NSW advised that its advertising was targeted at audiences with a propensity to travel, which did not necessarily include culturally diverse audiences, and its media channel research influenced its decision not to target specific CALD-focussed media channels.

None of the above factors negate Destination NSW's responsibility to ensure that the 'CALD and Aboriginal Advertising Policy' requirements are met.

In addition, Destination NSW also noted a number of non-media activities that supported culturally and linguistically diverse audiences, including translations on the sydney.com website, capturing of culturally and linguistically diverse audiences in production shooting and the production of a range of other collateral for culturally and linguistically diverse audiences. Despite these non-media activities, which Destination NSW did not quantify, the requirement for minimum expenditure in the reviewed campaigns for CALD audiences was not met by Destination NSW.

Destination NSW advised that it believes that the 7.5 per cent requirement does not apply to advertising outside of New South Wales, which the 'Get Your Sydney On', Love NSW and Road Trips campaigns targeted in whole or in part. The 'CALD and Aboriginal Advertising Policy' does not specifically limit its application to advertising for New South Wales residents.

Appendix one – Response to Destination NSW

Appendix two – Response from agencies

Appendix three – About the campaigns

Appendix four – About the audit

Appendix five – 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 #360 - released (23 December 2021).

What the report is about

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

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

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

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

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

What we found

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

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

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

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

What we recommended

DPIE should:

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

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

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

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

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

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

Appendix one – Response from agency

Appendix two – Planning determination pathways

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 #354 - released (27 July 2021).