Reports
Mobile speed cameras
The primary goal of speed cameras is to reduce speeding and make the roads safer. Our 2011 performance audit on speed cameras found that, in general, speed cameras change driver behaviour and have a positive impact on road safety.
Transport for NSW published the NSW Speed Camera Strategy in June 2012 in response to our audit. According to the Strategy, the main purpose of mobile speed cameras is to reduce speeding across the road network by providing a general deterrence through anywhere, anytime enforcement and by creating a perceived risk of detection across the road network. Fixed and red-light speed cameras aim to reduce speeding at specific locations.
Roads and Maritime Services and Transport for NSW deploy mobile speed cameras (MSCs) in consultation with NSW Police. The cameras are operated by contractors authorised by Roads and Maritime Services. MSC locations are stretches of road that can be more than 20 kilometres long. MSC sites are specific places within these locations that meet the requirements for a MSC vehicle to be able to operate there.
This audit assessed whether the mobile speed camera program is effectively managed to maximise road safety benefits across the NSW road network.
The mobile speed camera program requires improvements to key aspects of its management to maximise road safety benefits. While camera locations have been selected based on crash history, the limited number of locations restricts network coverage. It also makes enforcement more predictable, reducing the ability to provide a general deterrence. Implementation of the program has been consistent with government decisions to limit its hours of operation and use multiple warning signs. These factors limit the ability of the mobile speed camera program to effectively deliver a broad general network deterrence from speeding.
Many locations are needed to enable network-wide coverage and ensure MSC sessions are randomised and not predictable. However, there are insufficient locations available to operate MSCs that meet strict criteria for crash history, operator safety, signage and technical requirements. MSC performance would be improved if there were more locations.
A scheduling system is meant to randomise MSC location visits to ensure they are not predictable. However, a relatively small number of locations have been visited many times making their deployment more predictable in these places. The allocation of MSCs across the time of day, day of week and across regions is prioritised based on crash history but the frequency of location visits does not correspond with the crash risk for each location.
There is evidence of a reduction in fatal and serious crashes at the 30 best-performing MSC locations. However, there is limited evidence that the current MSC program in NSW has led to a behavioural change in drivers by creating a general network deterrence. While the overall reduction in serious injuries on roads has continued, fatalities have started to climb again. Compliance with speed limits has improved at the sites and locations that MSCs operate, but the results of overall network speed surveys vary, with recent improvements in some speed zones but not others.
There is no supporting justification for the number of hours of operation for the program. The rate of MSC enforcement (hours per capita) in NSW is less than Queensland and Victoria. The government decision to use multiple warning signs has made it harder to identify and maintain suitable MSC locations, and impeded their use for enforcement in both traffic directions and in school zones.
Appendix one - Response from agency
Appendix two - About the audit
Appendix three - Performance auditing
Parliamentary reference - Report number #308 - released 18 October 2018
Progress and measurement of the Premier's Priorities
The Premier’s Implementation Unit uses a systematic approach to measuring and reporting progress towards the Premier’s Priorities performance targets, but public reporting needed to improve, according to a report released today by the Auditor-General of NSW, Margaret Crawford.
The Premier of New South Wales has established 12 Premier’s Priorities. These are key performance targets for government.
| The 12 Premier's Priorities | |
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Source: Department of Premier and Cabinet, Premier’s Priorities website.
Each Premier’s Priority has a lead agency and minister responsible for achieving the performance target.
The Premier’s Implementation Unit (PIU) was established within the Department of Premier and Cabinet (DPC) in 2015. The PIU is a delivery unit that supports agencies to measure and monitor performance, make progress toward the Premier’s Priorities targets, and report progress to the Premier, key ministers and the public.
This audit assessed how effectively the NSW Government is progressing and reporting on the Premier's Priorities.
The Premier’s Implementation Unit (PIU) is effective in assisting agencies to make progress against the Premier’s Priorities targets. Progress reporting is regular but transparency to the public is weakened by the lack of information about specific measurement limitations and lack of clarity about the relationship of the targets to broader government objectives.The PIU promotes a systematic approach to measuring performance and reporting progress towards the Premier’s Priorities’ performance targets. Public reporting would be improved with additional information about the rationale for choosing specific targets to report on broader government objectives.
The PIU provides a systematic approach to measuring performance and reporting progress towards the Premier's Priorities performance targets. Public reporting would be improved with additional information about the rationale for choosing specific targets to report on broader government objectives. The data used to measure the Premier’s Priorities comes from a variety of government and external datasets, some of which have known limitations. These limitations are not revealed in public reporting, and only some are revealed in progress reported to the Premier and ministers. This limits the transparency of reporting.
The PIU assists agencies to avoid unintended outcomes that can arise from prioritising particular performance measures over other areas of activity. The PIU has adopted a collaborative approach to assisting agencies to analyse performance using data, and helping them work across organisational silos to achieve the Premier’s Priorities targets.
Data used to measure progress for some of the Premier’s Priorities has limitations which are not made clear when progress is reported. This reduces transparency about the reported progress. Public reporting would also be improved with additional information about the relationship between specific performance measures and broader government objectives.
The PIU is responsible for reporting progress to the Premier, key ministers and the public. Agencies provide performance data and some play a role in preparing progress reports for the Premier and ministers. For 11 of the Premier's Priorities, progress is reported against measurable and time-related performance targets. For the infrastructure priority, progress is reported against project milestones.
Progress of some Priorities is measured using data that has known limitations, which should be noted wherever progress is reported. For example, the data used to report on housing completions does not take housing demolitions into account, and is therefore overstating the contribution of this performance measure to housing supply. This known limitation is not explained in progress reports or on the public website.
Data used to measure progress is sourced from a mix of government and external datasets. Updated progress data for most Premier’s Priorities is published on the Premier’s Priorities website annually, although reported to the Premier and key ministers more frequently. The PIU reviews the data and validates it through fieldwork with front line agencies. The PIU also assists agencies to avoid unintended outcomes that can arise from prioritising single performance measures. Most, but not all, agencies use additional indicators to check for misuse of data or perverse outcomes.
We examined the reporting processes and controls for five of the Premier’s Priorities. We found that there is insufficient assurance over the accuracy of the data on housing approvals.
The relationships between performance measures and broader government objectives is not always clearly explained on the Premier’s Priority website, which is the key source of public information about the Premier’s Priorities. For example, the Premier’s Priority to reduce litter volumes is communicated as “Keeping our Environment Clean.” While the website explains why reducing litter is important, it does not clearly explain why that particular target has been chosen to measure progress in keeping the environment clean.
By December 2018, the Department of Premier and Cabinet should:
- improve transparency of public reporting by:
- providing information about limitations of reported data and associated performance
- clarifying the relationship between the Premier’s Priorities performance targets and broader government objectives.
- ensure that processes to check and verify data are in place for all agency data sources
- encourage agencies to develop and implement additional supporting indicators for all Premier’s Priority performance measures to prevent and detect unintended consequences or misuse of data.
The Premier's Implementation Unit is effective in supporting agencies to deliver progress towards the Premier’s Priority targets.
The PIU promotes a systematic approach to monitoring and reporting progress against a target, based on a methodology used in delivery units elsewhere in the world. The PIU undertakes internal self-evaluation, and commissions regular reviews of methodology implementation from the consultancy that owns the methodology and helped to establish the PIU. However, the unit lacks periodic independent reviews of their overall effectiveness. The PIU has adopted a collaborative approach and assists agencies to analyse performance using data, and work across organisational silos to achieve the Premier’s Priorities targets.
Agency representatives recognise the benefits of being responsible for a Premier's Priority and speak of the value of being held to account and having the attention of the Premier and senior ministers.
By June 2019, the Department of Premier and Cabinet should:
- establish routine collection of feedback about PIU performance including:
- independent assurance of PIU performance
- opportunity for agencies to provide confidential feedback.
Appendix one: Response from agency
Appendix three: About the audit
Appendix four: Performance auditing
Parliamentary reference - Report number #307 - released 13 September 2018
HealthRoster benefits realisation
The HealthRoster system is delivering some business benefits but Local Health Districts are yet to use all of its features, according to a report released today by the Auditor-General for New South Wales, Margaret Crawford. HealthRoster is an IT system designed to more effectively roster staff to meet the needs of Local Health Districts and other NSW health agencies.
The NSW public health system employs over 100,000 people in clinical and non-clinical roles across the state. With increasing demand for services, it is vital that NSW Health effectively rosters staff to ensure high quality and efficient patient care, while maintaining good workplace practices to support staff in demanding roles.
NSW Health is implementing HealthRoster as its single state-wide rostering system to more effectively roster staff according to the demands of each location. Between 2013–14 and 2016–17, our financial audits of individual LHDs had reported issues with rostering and payroll processes and systems.
NSW Health grouped all Local Health Districts (LHDs), and other NSW Health organisations, into four clusters to manage the implementation of HealthRoster over four years. Refer to Exhibit 4 for a list of the NSW Health entities in each cluster.
- Cluster 1 implementation commenced in 2014–15 and was completed in 2015–16.
- Cluster 2 implementation commenced in 2015–16 and was completed in 2016–17.
- Cluster 3 began implementation in 2016–17 and was underway during the conduct of the audit.
- Cluster 4 began planning for implementation in 2017–18.
Full implementation, including capability for centralised data and reporting, is planned for completion in 2019.
This audit assessed the effectiveness of the HealthRoster system in delivering business benefits. In making this assessment, we examined whether:
- expected business benefits of HealthRoster were well-defined
- HealthRoster is achieving business benefits where implemented.
The HealthRoster project has a timespan from 2009 to 2019. We examined the HealthRoster implementation in LHDs, and other NSW Health organisations, focusing on the period from 2014, when eHealth assumed responsibility for project implementation, to early 2018.
Business benefits identified for HealthRoster accurately reflect business needs.
NSW Health has a good understanding of the issues in previous rostering systems and has designed HealthRoster to adequately address these issues. Interviews with frontline staff indicate that HealthRoster facilitates rostering which complies with industrial awards. This is a key business benefit that supports the provision of quality patient care. We saw no evidence that any major business needs or issues with the previous rostering systems are not being addressed by HealthRoster.
In the period examined in this audit since 2015, NSW Health has applied appropriate project management and governance structures to ensure that risks and issues are well managed during HealthRoster implementation.
HealthRoster has had two changes to its budget and timeline. Overall, the capital cost for the project has increased from $88.6 million to $125.6 million (42 per cent) and has delayed expected project completion by four years from 2015 to 2019. NSW Health attributes the increased cost and extended time frame to the large scale and complexity of the full implementation of HealthRoster.
NSW Health has established appropriate governance arrangements to ensure that HealthRoster is successfully implemented and that it will achieve business benefits in the long term. During implementation, local steering committees monitor risks and resolve implementation issues. Risks or issues that cannot be resolved locally are escalated to the state-wide steering committee.
NSW Health has grouped local health districts, and other NSW Health organisations, into four clusters for implementation. This has enabled NSW Health to apply lessons learnt from each implementation to improve future implementations.
NSW Health has a benefits realisation framework, but it is not fully applied to HealthRoster.
NSW Health can demonstrate that HealthRoster has delivered some functional business benefits, including rosters that comply with a wide variety of employment awards.
NSW Health is not yet measuring and tracking the value of business benefits achieved. NSW Health did not have benefits realisation plans with baseline measures defined for LHDs in cluster 1 and 2 before implementation. Without baseline measures NSW Health is unable to quantify business benefits achieved. However, analysis of post-implementation reviews and interviews with frontline staff indicate that benefits are being achieved. As a result, NSW Health now includes defining baseline measures and setting targets as part of LHD implementation planning. It has created a benefits realisation toolkit to assist this process from cluster 3 implementations onwards.
NSW Health conducted post-implementation reviews for clusters 1 and 2 and found that LHDs in these clusters were not using HealthRoster to realise all the benefits that HealthRoster could deliver.
By September 2018, NSW Health should:
- Ensure that Local Health Districts undertake benefits realisation planning according to the NSW Health benefits realisation framework
- Regularly measure benefits realised, at state and local health district levels, from the statewide implementation of HealthRoster
- Review the use of HealthRoster in Local Health Districts in clusters 1 and 2 and assist them to improve their HealthRoster related processes and practices.
By June 2019, NSW Health should:
- Ensure that all Local Health Districts are effectively using demand based rostering.
Appendix one - Response from agency
Appendix two - About the audit
Appendix three - Performance auditing
Parliamentary reference - Report number #301 - released 7 June 2018
Regional Assistance Programs
Infrastructure NSW effectively manages how grant applications for regional assistance programs are assessed and recommended for funding. Its contract management processes are also effective. However, we are unable to conclude whether the objectives of these programs have been achieved as the relevant agencies have not yet measured their benefits, according to a report released today by the Auditor-General for New South Wales, Margaret Crawford.
In 2011, the NSW Government established Restart NSW to fund new infrastructure with the proceeds from the sale and lease of government assets. From 2011 to 2017, the NSW Government allocated $1.7 billion from the fund for infrastructure in regional areas, with an additional commitment of $1.3 billion to be allocated by 2021. The NSW Government allocates these funds through regional assistance programs such as Resources for Regions and Fixing Country Roads. NSW councils are the primary recipients of funding provided under these programs.
The NSW Government announced the Resources for Regions program in 2012 with the aim of addressing infrastructure constraints in mining affected communities. Infrastructure NSW administers the program, with support from the Department of Premier and Cabinet.
The NSW Government announced the Fixing Country Roads program in 2014 with the aim of building more efficient road freight networks. Transport for NSW and Infrastructure NSW jointly administer this program, which funds local councils to deliver projects that help connect local and regional roads to state highways and freight hubs.
This audit assessed whether these two programs (Resources for Regions and Fixing Country Roads) were being effectively managed and achieved their objectives. In making this assessment, we answered the following questions:
- How well are the relevant agencies managing the assessment and recommendation process?
- How do the relevant agencies ensure that funded projects are being delivered?
- Do the funded projects meet program and project objectives?
The audit focussed on four rounds of Resources for Regions funding between 2013–14 to 2015–16, as well as the first two rounds of Fixing Country Roads funding in 2014–15 and 2015–16.
The project selection criteria are consistent with the program objectives set by the NSW Government, and the RIAP applied the criteria consistently. Probity and record keeping practices did not fully comply with the probity plans.
The assessment methodology designed by Infrastructure NSW is consistent with2 the program objectives and criteria. In the rounds that we reviewed, all funded projects met the assessment criteria.
Infrastructure NSW developed probity plans for both programs which provided guidance on the record keeping required to maintain an audit trail, including the use of conflict of interest registers. Infrastructure NSW and Transport for NSW did not fully comply with these requirements. The relevant agencies have taken steps to address this in the current funding rounds for both programs.
NSW Procurement Board Directions require agencies to ensure that they do not engage a probity advisor that is engaged elsewhere in the agency. Infrastructure NSW has not fully complied with this requirement. A conflict of interest arose when Infrastructure NSW engaged the same consultancy to act as its internal auditor and probity advisor.
While these infringements of probity arrangements are unlikely to have had a major impact on the assessment process, they weaken the transparency and accountability of the process.
Some councils have identified resourcing and capability issues which impact on their ability to participate in the application process. For both programs, the relevant agencies conducted briefings and webinars with applicants to provide advice on the objectives of the programs and how to improve the quality of their applications. Additionally, Transport for NSW and the Department of Premier and Cabinet have developed tools to assist councils to demonstrate the economic impact of their applications.
The relevant agencies provided feedback on unsuccessful applications to councils. Councils reported that the quality of this feedback has improved over time.
Recommendations
- By June 2018, Infrastructure NSW should:
- ensure probity reports address whether all elements of the probity plan have been effectively implemented.
- By June 2018, Infrastructure NSW and Transport for NSW should:
- maintain and store all documentation regarding assessment and probity matters according to the State Records Act 1998, the NSW Standard on Records Management and the relevant probity plans
Infrastructure NSW is responsible for overseeing and monitoring projects funded under Resources for Regions and Fixing Country Roads. Infrastructure NSW effectively manages projects to keep them on track, however it could do more to assure itself that all recipients have complied with funding deeds. Benefits and outcomes should also start to be measured and reported as soon as practicable after projects are completed to inform assessment of future projects.
Infrastructure NSW identifies projects experiencing unreasonable delays or higher than expected expenses as 'at‑risk'. After Infrastructure NSW identifies a project as 'at‑risk', it puts in place processes to resolve issues to bring them back on track. Infrastructure NSW, working with Public Works Advisory regional offices, employs a risk‑based approach to validate payment claims, however this process should be strengthened. Infrastructure NSW would get better assurance by also conducting annual audits of compliance with the funding deed for a random sample of projects.
Infrastructure NSW collects project completion reports for all Resources for Regions and Fixing Country Roads funded projects. It applies the Infrastructure Investor Assurance Framework to Resources for Regions and Fixing Country Roads at a program level. This means that each round of funding (under both programs) is treated as a distinct program for the purposes of benefits realisation. It plans to assess whether benefits have been realised once each project in a funding round is completed. As a result, no benefits realisation assessment has been done for any project funded under either Resources for Regions or Fixing Country Roads. Without project‑level benefits realisation, future decisions are not informed by the lessons from previous investments.
Recommendations
- By December 2018, Infrastructure NSW should:
- conduct annual audits of compliance with the funding deed for a random sample of projects funded under Resources for Regions and Fixing Country Roads
- publish the circumstances under which unspent funds can be allocated to changes in project scope
- measure benefits delivered by projects that were completed before December 2017
- implement an annual process to measure benefits for projects completed after December 2017
- By December 2018, Transport for NSW and Infrastructure NSW should:
- incorporate a benefits realisation framework as part of the detailed application.
Appendix one - Response from agencies
Appendix two - Maps of funded projects
Appendix three - About the audit
Appendix four - Performance auditing
Parliamentary reference - Report number #300 - released 17 May 2018
Internal Controls and Governance 2017
Agencies need to do more to address risks posed by information technology (IT).
Effective internal controls and governance systems help agencies to operate efficiently and effectively and comply with relevant laws, standards and policies. We assessed how well agencies are implementing these systems, and highlighted opportunities for improvement.
1. Overall trends
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New and repeat findings |
The number of reported financial and IT control deficiencies has fallen, but many previously reported findings remain unresolved. |
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High risk findings |
Poor systems implementations contributed to the seven high risk internal control deficiencies that could affect agencies. |
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Common findings |
Poor IT controls are the most commonly reported deficiency across agencies, followed by governance issues relating to cyber security, capital projects, continuous disclosure, shared services, ethics and risk management maturity. |
2. Information Technology
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IT security |
Only two-thirds of agencies are complying with their own policies on IT security. Agencies need to tighten user access and password controls. |
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Cyber security |
Agencies do not have a common view on what constitutes a cyber attack, which limits understanding the extent of the cyber security threat. |
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Other IT systems |
Agencies can improve their disaster recovery plans and the change control processes they use when updating IT systems. |
3. Asset Management
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Capital investment |
Agencies report delays delivering against the significant increase in their budgets for capital projects. |
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Capital projects |
Agencies are underspending their capital budgets and some can improve capital project governance. |
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Asset disposals |
Eleven per cent of agencies were required to sell their real property through Property NSW but didn’t. And eight per cent of agencies can improve their asset disposal processes. |
4. Governance
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Governance arrangements |
Sixty-four per cent of agencies’ disclosure policies support communication of key performance information and prompt public reporting of significant issues. |
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Shared services |
Fifty-nine per cent of agencies use shared services, yet 14 per cent do not have service level agreements in place and 20 per cent can strengthen the performance standards they set. |
5. Ethics and Conduct
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Ethical framework |
Agencies can reinforce their ethical frameworks by updating code‑of‑conduct policies and publishing a Statement of Business Ethics. |
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Conflicts of interest |
All agencies we reviewed have a code of conduct, but they can still improve the way they update and manage their codes to reduce the risk of fraud and unethical behaviour. |
6. Risk Management
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Risk management maturity |
All agencies have implemented risk management frameworks, but with varying levels of maturity. |
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Risk management elements |
Many agencies can improve risk registers and strengthen their risk culture, particularly in the way that they report risks to their lead agency. |
This report covers the findings and recommendations from our 2016–17 financial audits related to the internal controls and governance of the 39 largest agencies (refer to Appendix three) in the NSW public sector. These agencies represent about 95 per cent of total expenditure for all NSW agencies and were considered to be a large enough group to identify common issues and insights.
The findings in this report should not be used to draw conclusions on the effectiveness of individual agency control environments and governance arrangements. Specific financial reporting, controls and service delivery comments are included in the individual 2017 cluster financial audit reports tabled in Parliament from October to December 2017.
This new report offers strategic insight on the public sector as a whole
In previous years, we have commented on internal control and governance issues in the volumes we published on each ‘cluster’ or agency sector, generally between October and December. To add further value, we then commented more broadly about the issues identified for the public sector as a whole at the start of the following year.
This year, we have created this report dedicated to internal controls and governance. This will help Parliament to understand broad issues affecting the public sector, and help agencies to compare their own performance against that of their peers.
Without strong control measures and governance systems, agencies face increased risks in their financial management and service delivery. If they do not, for example, properly authorise payments or manage conflicts of interest, they are at greater risk of fraud. If they do not have strong information technology (IT) systems, sensitive and trusted information may be at risk of unauthorised access and misuse.
These problems can in turn reduce the efficiency of agency operations, increase their costs and reduce the quality of the services they deliver.
Our audits do not review every control or governance measure every year. We select a range of measures, and report on those that present the most significant risks that agencies should mitigate. This report divides these into the following six areas:
- Overall trends
- Information technology
- Asset management
- Governance
- Ethics and conduct
- Risk management.
Internal controls are processes, policies and procedures that help agencies to:
- operate effectively and efficiently
- produce reliable financial reports
- comply with laws and regulations.
This chapter outlines the overall trends for agency controls and governance issues, including the number of findings, level of risk and the most common deficiencies we found across agencies. The rest of this volume then illustrates this year’s controls and governance findings in more detail.
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Issues |
Recommendations |
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1.1 New and repeat findings |
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The number of internal control deficiencies reduced over the past three years, but new higher-risk information technology (IT) control deficiencies were reported in 2016–17. Deficiencies repeated from previous years still make up a sizeable proportion of all internal control deficiencies. |
Recommendation Agencies should focus on emerging IT risks, but also manage new IT risks, reduce existing IT control deficiencies, and address repeat internal control deficiencies on a more timely basis. |
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1.2 High risk findings |
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We found seven high risk internal control deficiencies, which might significantly affect agencies. |
Recommendation Agencies should rectify high risk internal control deficiencies as a priority |
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1.3 Common findings |
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The most common internal control deficiencies related to poor or absent IT controls. We found some common governance deficiencies across multiple agencies. |
Recommendation Agencies should coordinate actions and resources to help rectify common IT control and governance deficiencies. |
Information technology (IT) has become increasingly important for government agencies’ financial reporting and to deliver their services efficiently and effectively. Our audits reviewed whether agencies have effective controls in place over their IT systems. We found that IT security remains the source of many control weakness in agencies.
| Issues | Recommendations |
2.1 IT security |
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User access administration While 95 per cent of agencies have policies about user access, about two-thirds were compliant with these policies. Agencies can improve how they grant, change and end user access to their systems. |
Recommendation Agencies should strengthen user access administration to prevent inappropriate access to sensitive systems. Agencies should:
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Privileged access Sixty-eight per cent of agencies do not adequately manage who can access their information systems, and many do not sufficiently monitor or restrict privileged access. |
Recommendation Agencies should tighten privileged user access to protect their information systems and reduce the risks of data misuse and fraud. Agencies should ensure they:
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Password controls Forty-one per cent of agencies did not meet either their own standards or minimum standards for password controls. |
Recommendation Agencies should review and enforce password controls to strengthen security over sensitive systems. As a minimum, password parameters should include:
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2.2 Cyber Security |
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Cyber security framework Agencies do not have a common view on what constitutes a cyber attack, which limits understanding the extent of the cyber security threat. |
Recommendation The Department of Finance, Services and Innovation should revisit its existing framework to develop a shared cyber security terminology and strengthen the current reporting requirements for cyber incidents. |
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Cyber security strategies While 82 per cent of agencies have dedicated resources to address cyber security, they can strengthen their strategies, expertise and staff awareness. |
Recommendations The Department of Finance, Services and Innovation should:
Agencies should ensure they adequately resource staff dedicated to cyber security. |
2.3 Other IT systems |
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Change control processes Some agencies need to improve change control processes to avoid unauthorised or inaccurate system changes. |
Recommendation Agencies should consistently perform user acceptance testing before system upgrades and changes. They should also properly approve and document changes to IT systems. |
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Disaster recovery planning Agencies can do more to adequately assess critical business systems to enforce effective disaster recovery plans. This includes reviewing and testing their plans on a timely basis. |
Recommendation Agencies should complete business impact analyses to strengthen disaster recovery plans, then regularly test and update their plans. |
Agency service delivery relies on developing and renewing infrastructure assets such as schools, hospitals, roads, or public housing. Agencies are currently investing significantly in new assets. Agencies need to manage the scale and volume of current capital projects in order to deliver new infrastructure on time, on budget and realise the intended benefits. We found agencies can improve how they:
- manage their major capital projects
- dispose of existing assets.
| Issues | Recommendations or conclusions |
3.1 Capital investment |
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Capital asset investment ratios Most agencies report high capital investment ratios, but one-third of agencies’ capital investment ratios are less than one. |
Recommendation Agencies with high capital asset investment ratios should ensure their project management and delivery functions have the capacity to deliver their current and forward work programs. |
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Volume of capital spending Most agencies have significant forward spending commitments for capital projects. However, agencies’ actual capital expenditure has been below budget for the last three years. |
Conclusion The significant increase in capital budget underspends warrant investigation, particularly where this has resulted from slower than expected delivery of projects from previous years. |
3.2 Capital projects |
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Major capital projects Agencies’ major capital projects were underspent by 13 percent against their budgets. |
Conclusion The causes of agency budget underspends warrant investigation to ensure the NSW Government’s infrastructure commitment is delivered on time. |
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Capital project governance Agencies do not consistently prepare business cases or use project steering committees to oversee major capital projects. |
Conclusion Agencies that have project management processes that include robust business cases and regular updates to their steering committees (or equivalent) are better able to provide those projects with strategic direction and oversight. |
3.3. Asset disposals |
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Asset disposal procedures Agencies need to strengthen their asset disposal procedures. |
Recommendations Agencies should have formal processes for disposing of surplus properties. Agencies should use Property NSW to manage real property sales unless, as in the case for State owned corporations, they have been granted an exemption. |
Governance refers to the high-level frameworks, processes and behaviours that help an organisation to achieve its objectives, comply with legal and other requirements, and meet a high standard of probity, accountability and transparency.
This chapter sets out the governance lighthouse model the Audit Office developed to help agencies reach best practice. It then focuses on two key areas: continuous disclosure and shared services arrangements. The following two chapters look at findings related to ethics and risk management.
| Issues | Recommendations or conclusions |
4.1 Governance arrangements |
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Continuous disclosure Continuous disclosure promotes improved performance and public trust and aides better decision-making. Continuous disclosure is only mandatory for NSW Government Businesses such as State owned corporations. |
Conclusion Some agencies promote transparency and accountability by publishing on their websites a continuous disclosure policy that provides for, and encourages:
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4.2 Shared services |
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Service level agreements Some agencies do not have service level agreements for their shared service arrangements. Many of the agreements that do exist do not adequately specify controls, performance or reporting requirements. This reduces the effectiveness of shared services arrangements. |
Conclusion Agencies are better able to manage the quality and timeliness of shared service arrangements where they have a service level agreement in place. Ideally, the terms of service should be agreed before services are transferred to the service provider and:
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Shared service performance Some agencies do not set performance standards for their shared service providers or regularly review performance results. |
Conclusion Agencies can achieve better results from shared service arrangements when they regularly monitor the performance of shared service providers using key measures for the benefits realised, costs saved and quality of services received. Before agencies extend or renegotiate a contract, they should comprehensively assess the services received and test the market to maximise value for money. |
All government sector employees must demonstrate the highest levels of ethical conduct, in line with standards set by The Code of Ethics and Conduct for NSW government sector employees.
This chapter looks at how well agencies are managing these requirements, and where they can improve their policies and processes.
We found that agencies mostly have the appropriate codes, frameworks and policies in place. But we have highlighted opportunities to improve the way they manage those systems to reduce the risks of unethical conduct.
| Issues | Recommendations or conclusions |
5.1 Ethical framework |
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Code of conduct All agencies we reviewed have a code of conduct, but they can still improve the way they update and manage their codes to reduce the risk of fraud and unethical behaviour. |
Recommendation Agencies should regularly review their code-of-conduct policies and ensure they keep their codes of conduct up-to-date. |
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Statement of business ethics Most agencies maintain an ethical framework, but some can enhance their related processes, particularly when dealing with external clients, customers, suppliers and contractors. |
Conclusion Agencies can enhance their ethical frameworks by publishing a Statement of Business Ethics, which communicates their values and culture. |
5.2 Potential conflicts of interest |
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Conflicts of interest All agencies have a conflicts-of-interest policy, but most can improve how they identify, manage and avoid conflicts of interest. |
Recommendation Agencies should improve the way they manage conflicts of interest, particularly by:
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Gifts and benefits While all agencies already have a formal gifts-and-benefits policy, we found gaps in the management of gifts and benefits by some that increase the risk of unethical conduct. |
Recommendation Agencies should improve the way they manage gifts and benefits by promptly updating registers and providing annual training to staff. |
Risk management is an integral part of effective corporate governance. It helps agencies to identify, assess and prioritise the risks they face and in turn minimise, monitor and control the impact of unforeseen events. It also means agencies can respond to opportunities that may emerge and improve their services and activities.
This year we looked at the overall maturity of the risk management frameworks that agencies use, along with two important risk management elements: risk culture and risk registers.
| Issues | Recommendations or conclusions |
6.1 Risk management maturity |
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All agencies have implemented risk management frameworks, but with varying levels of maturity in their application. Agencies’ averaged a score of 3.1 out of five across five critical assessment criteria for risk management. While strategy and governance fared best, the areas that most need to improve are risk culture, and systems and intelligence. |
Conclusion Agencies have introduced risk management frameworks and practices as required by the Treasury’s:
However, more can be done to progress risk management maturity and embed risk management in agency culture. |
6.2 Risk management elements |
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Risk culture Most agencies have started to embed risk management into the culture of their organisation. But only some have successfully done so, and most agencies can improve their risk culture.
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Conclusion Agencies can improve their risk culture by:
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Risk registers and reporting Some agencies do not report their significant risks to their lead agency, which may impair the way resources are allocated in their cluster. Some agencies do not integrate risk registers at a divisional and whole-of-enterprise level. |
Conclusion Agencies not reporting significant risks at the cluster level increases the likelihood that significant risks are not being mitigated appropriately. |
Effective risk management can improve agency decision-making, protect reputations and lead to significant efficiencies and cost savings. By embedding risk management directly into their operations, agencies can also derive extra value for their activities and services.
Planning and Environment 2017
The following report highlights results of financial audits of agencies in the Planning and Environment cluster. The report focuses on key observations and findings from the most recent audits of these agencies.
The audits were completed for most agencies in the cluster and unqualified audit opinions issued. Issues identified during the financial statement audits of seven small agencies delayed their finalisation beyond the statutory deadline, and six of these remain incomplete. Apart from these small agencies, the quality of financial reporting across the cluster remained at a high standard.
This report provides Parliament and others with the audit results, observations and recommendations for Planning and Environment cluster agencies. The report has been structured into two chapters focussing on financial reporting and controls and service delivery.
The Planning and Environment cluster plays a role in ensuring each community across New South Wales receives the services and infrastructure it needs.
This chapter outlines our audit observations and recommendations related to financial reporting and controls of Planning and Environment cluster agencies for 2016–17.
| Observation | Conclusion or recommendation |
2.1 Quality of financial reporting |
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Unqualified audit opinions were issued for 39 of the 45 cluster agencies' financial statements. |
Issues identified during the financial statement audits of seven smaller agencies delayed their completion. Six audits remain incomplete at the date of this report. Apart from these seven small agency audits, the quality of financial reporting across the cluster remained at a high standard. |
2.2 Timeliness of financial reporting |
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Seven agencies' financial statement audits were not completed by the statutory deadline with six audits incomplete at the date of this report. |
Issues identified during the financial statement audits of seven smaller agencies delayed their finalisation beyond the statutory deadline. These agencies would benefit from performing additional early close procedures in future reporting periods. |
2.3 Financial and sustainability analysis |
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Water and Electricity utility agencies continue to operate with low liquidity ratios. |
A liquidity ratio below one is an indicator that an entity may not be able to pay its debts as and when they fall due. Whilst liquidity ratios were below one, utility agencies demonstrated they can continue to support ongoing operations due to:
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2.5 Internal controls |
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One in six internal control weaknesses reported in 2016–17 were repeat issues. |
Delays in implementing audit recommendations can prolong the risk of fraud and error. Recommendation (repeat issue): anagement letter recommendations to address internal control weaknesses should be actioned promptly, with a focus on addressing repeat issues. |
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Nine of these internal control weaknesses related to the creation, modification, deletion and review of user access to financial systems. |
These control weaknesses may compromise the integrity and security of financial data. Recommendation (repeat issue): Management of user administration over financial systems should be strengthened to prevent inappropriate access to financial information. |
This chapter outlines our audit observations, conclusions and recommendations relating to service delivery for 2016–17.
| Observation | Conclusion or recommendation |
3.1 Premier's and State priorities |
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| The Planning and Environment cluster is responsible for delivering five Premier's and State priorities. |
One priority target was achieved in 2016–17, two targets are on track to be achieved and progress towards one target slowed. Progress against one target cannot be determined. |
3.2 Planning |
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Housing Completion |
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| There were 63,506 housing completions in 2016–17. This was 4.1 per cent above the Premier’s priority target of delivering 61,000 housing completions per year. |
The Australian Bureau of Statistics data shows the housing completions target was achieved in 2016–17. |
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Housing supply |
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| The number of approvals for new houses in 2016–17 was 72,472 against the State priority target of more than 50,000 approvals per year. |
The Australian Bureau of Statistics data indicates the housing approvals target was achieved in 2016–17. |
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Major project assessment |
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| State significant developments are not clearly defined for the purposes of reporting against the State priority target. | The Department of Planning and Environment will clarify with the Department of Premier and Cabinet which developments are captured by the State priority target. |
| The Department of Planning and Environment’s data shows the time taken to assess complex State significant developments increased by 16 per cent in 2016–17 while the time taken to assess less complex developments reduced by 20 per cent. | The Department of Planning and Environment considers it is on track to meet the State priority target of halving the time taken to assess State significant developments, despite uncertainty over the target measure. |
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Housing acceleration fund |
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Program business cases were not developed for projects in Housing Acceleration Fund Rounds 1 to 4. The Department advised a program business case will be developed for Housing Acceleration Fund Round 5 projects. |
A program business case is necessary to ensure related projects are evaluated, managed and coordinated effectively. |
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A benefit realisation review process has not yet been approved for Housing Acceleration Fund projects. The Department of Planning and Environment advised it is developing a benefit realisation review process. |
A benefit realisation review process is necessary to determine whether funded projects achieved intended outcomes. |
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Greater Sydney Commission |
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| The Greater Sydney Commission forecasts a further 725,000 dwellings in the greater Sydney region will be required up to 2036 to meet housing demand. | In response to population growth, the Commission has set a five-year housing supply target of 189,100 houses across the five Greater Sydney Commission districts. |
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ePlanning system |
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| The Department of Planning and Environment did not perform a benefit realisation review for phase one of the ePlanning project. It has committed to performing a benefit realisation review after completion of phase two in 2018. | It cannot be determined if phase one of the project delivered expected outcomes as a benefit realisation review was not performed. |
3.3. Environment and Heritage |
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| Litter volume in New South Wales was 6.6 litres per 1,000 square metres in 2016–17, an increase of 16 per cent from the prior year. This is above the Premier's priority litter volume target of 4.2 litres per 1,000 square metres by 2020. | The Environment Protection Authority's data indicates the progress towards the target of reducing the volume of litter by 40 per cent by 2020 has slowed. |
| The NSW Government plans to invest $240 million to facilitate strategic biodiversity conservation on private land. | Performance measures have not yet been developed for the private land conservation program. |
3.4 Water |
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| IPART reduced water usage charges for most Sydney Water Corporation customers in 2016–17. | Water usage prices in New South Wales compare favourably to larger water utilities in other jurisdictions. |
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Hunter Water Corporation's water recycling and water conservation performance has been stable over recent years. The volume of Sydney Water Corporation’s recycled water reduced by 12 per cent in 2016–17 compared to the previous year. |
Sydney Water Corporation experienced reduced industry demand for recycled water. Several large industrial customers relocated away from Sydney. |
3.5 Arts and culture |
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| A State priority target is to increase overall attendance at cultural venues and events in New South Wales by 15 per cent from 2014–15 levels by 2019. | The Department of Planning and Environment's data indicates overall attendance increased by 16 per cent in 2015–16, although attendance fluctuated across individual venues and events. This indicates progress towards achieving the overall target by 2019. |
Transport 2017
The following report focuses on key observations and findings from the most recent financial statement audits of agencies in the Transport cluster.
Unqualified audit opinions were issued for all agencies' financial statements. However, the report notes the agencies can improve their asset revaluation processes.
Managing demand for ambulance services 2017
NSW Ambulance has introduced several initiatives over the past decade to better manage the number of unnecessary ambulance responses and transports to hospital emergency departments. However, there is no overall strategy to guide the development of these initiatives nor do NSW Ambulance's data systems properly monitor their impact. As a result, the Audit Office was unable to assess whether NSW Ambulance's approach to managing demand is improving the efficiency of ambulance services.
NSW Ambulance uses a telephone referral system to manage triple zero calls from people with medical issues that do not require an ambulance. This has the potential to achieve efficiency improvements but there are weaknesses in NSW Ambulance's use and monitoring of this system. Paramedics are now able to make decisions about whether patients need transport to a hospital emergency department. NSW Ambulance does not routinely measure or monitor the decisions paramedics make, so it does not know whether these decisions are improving efficiency. Extended Care Paramedics who have additional skills in diagnosing and treating patients with less urgent medical issues were introduced in 2007. NSW Ambulance analysis indicates that these paramedics have the potential to improve efficiency, but have not been used as effectively as possible.
Our 2013 audit of NSW Ambulance found that accurate monitoring of activity and performance was not being conducted. More than four years later, this remains the case.
NSW Ambulance has recognised the need to change the way it manages demand and has developed initiatives that have the potential to improve efficiency. However, there are significant weaknesses in the strategy for and implementation of its demand management initiatives.
NSW Ambulance has identified the goal of moving from an emergency transport provider to a mobile health service and developed several initiatives to support this. Its demand management initiatives have the potential to contribute to the broader policy directions for the health system in New South Wales. However, there is no clear overall strategy guiding these initiatives and their implementation has been poor.
NSW Ambulance's reasons for changing its approach to demand management have not been communicated proactively to the community. Demand management initiatives that have been operating for over a decade still do not have clear performance measures or targets. Project management of new initiatives has been inadequate, with insufficient organisational resources to oversee them and inadequate engagement with other healthcare providers.
NSW Ambulance uses an in-house Vocational Education and Training course to recruit some paramedics, as well as recruiting paramedics who have completed a university degree. No other Australian ambulance services continue to provide their own Vocational Education and Training qualifications. Paramedics will need more support in several key areas to be able to fulfil their expanded roles in providing a mobile health service. Performance and development systems for paramedics are not used effectively. Up to date technology would help paramedics make better decisions and improve NSW Ambulance's ability to monitor demand management activity.
There are gaps in NSW Ambulance's oversight of the risks of some of the initiatives it has introduced, particularly its lack of information on the outcomes for patients who are not transported to hospital. Weaknesses in the way NSW Ambulance uses its data limit its ability to properly assess the risks of the demand management initiatives it has introduced.
Parliamentary reference - Report number #295 - released 13 December 2017
Health 2017
The following report highlights results of the financial audits of entities in the NSW health cluster. The report focuses on key observations and findings from the most recent audits of these entities.
The report also includes a range of findings on service delivery. Overall, NSW Health is achieving most of their targets. Some local health districts are continuing to experience increased demand for their services and are finding it more difficult to meet their targets. For example, three local health districts had not achieved some emergency department response time targets for three consecutive years.
1. Financial reporting and controls
| Financial Reporting |
All health cluster entities received unqualified audit opinions and the quality of financial reporting remains high across the cluster. Early close procedures were largely completed and all financial statements were submitted by the deadlines. |
| Financial performance |
Overall, NSW Health recorded an operating surplus of $407 million in 2016–17. Eleven local health districts/specialty networks recorded operating deficits in 2016–17, four more than 2015–16. Expenses across NSW Health increased by 4.4 per cent in 2016–17 (6.0 per cent in 2015–16), lower than the expected long term annual expense growth rate. |
| Excess annual leave | Managing excess annual leave is a continual challenge for NSW Health, with thirty–five per cent of the workforce having excess balances. |
| Overtime payments | NSW Health entities are generally managing overtime well; however NSW Ambulance’s overtime payments, $74.6 million in 2016–17, remain significantly higher than other health entities. |
| Time and leave recording practices | Unapproved employee timesheets continue to be a problem for health entities. Weak timesheet approval controls increase the risk of staff claiming and being paid for hours they have not worked. There is also an increased risk of high volumes of roster adjustments, manual pays, salary overpayments and leave not being recorded accurately. |
2. Service Delivery
| Service Agreements | Most of the service agreements between the Secretary of NSW Health and health entities were signed earlier than prior years. |
| Performance monitoring | Five NSW Health entities are not meeting the Ministry of Health’s performance expectations at 30 June 2017. |
| Emergency department performance | Data provided by the Ministry indicates NSW Health, on average, met emergency department triage response time targets across all triage categories for the fourth consecutive year. |
| Ambulance response times | Data provided by the Ministry shows NSW Ambulance response times for imminently life‑threatening incidents of 7.5 minutes in 2016–17 was within the Ministry’s target of 10.0 minutes. Data provided by the Ministry indicates NSW Ambulance response times for potentially life‑threatening incidents did not improve in 2016–17. The median response time of 11.1 minutes in 2016–17 was similar to 2015–16 (11.0 minutes). This is despite the number of Priority 1 responses reducing by 4.3 per cent. |
| Unplanned hospital re-admissions | Data provided by the Ministry shows eight local health districts achieved the Ministry of Health’s unplanned hospital re‑admissions target in 2016–17. The target is for local health districts to reduce re‑admission rates from the previous financial year. |
This report sets out the results of the 30 June 2017 financial statement audits of Health cluster entities.
The report has been structured into two chapters focusing on:
- Financial reporting and controls
- Service delivery.
This chapter outlines audit observations, conclusions and recommendations related to financial reporting and internal controls of entities for 2016-17.
| Observation | Conclusion or recommendation |
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2.1 Quality of financial reporting |
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| All cluster entities received unqualified audit opinions and misstatements identified in financial statements fell. | The quality of financial reporting remains high across the cluster. |
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2.2 Timeliness of financial reporting |
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| Early close procedures were largely completed and all financial statements were submitted by the deadlines. | Health entities controlled by the Ministry of Health continued submitting their financial statements well ahead of the statutory deadlines. |
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2.4 Financial and sustainability analysis |
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NSW Health recorded an operating surplus of $407 million in 2016–17.
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The statewide operating surplus was $84 million higher than 2015–16. Net surpluses contribute to NSW Health’s ability to invest in new facilities, upgrades and redevelopments. The 2016–17 financial results were once again impacted by the NSW Government initiative to improve cash management across the sector. |
| 2.5 Performance against budget | |
| Ten local health districts/specialty networks’ expense budget variance was outside performance expectations agreed with the Ministry at the beginning of 2016–17. | The Ministry continues to manage performance across NSW Health to improve the accuracy of budgeting practices. |
| 2.7 Human Resources | |
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Thirty-five per cent of NSW Health’s workforce have excess annual leave balances.
NSW Ambulance had the highest average sick leave rate in NSW Health of 85.2 hours per FTE in 2016–17 (78.7 hours in 2015–16). This was higher than the statewide average of 62.1 hours (62.0 hours in 2015–16).
Unapproved employee timesheets continue to be a problem for health entities. Weak timesheet approval controls increase the risk of staff claiming and being paid for hours they have not worked.
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Managing excess annual leave is a continual challenge for health entities.
Recommendation: NSW Ambulance should further review the effectiveness of its rostering practices to identify strategies to reduce excessive overtime payments. Recommendation: Health entities should conduct a risk‑based review of time and leave recording practices to ensure control weaknesses are identified and fixed. |
This chapter outlines our audit observations, conclusions and recommendations relating to service delivery for 2016–17.
| Observation | Conclusion or recommendation |
| 3.1 Service agreements in NSW Health | |
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Most of the service agreements between the Secretary of NSW Health and health entities were signed earlier than prior years. Thirteen local health districts/specialty networks signed their service agreements by the 31 July 2017 due date. This is a significant improvement with only seven local health districts/specialty networks meeting the date in 2015–16. |
Having service agreements signed as close as possible to the start of each year provides the Ministry and NSW Health entities with clarity around roles, responsibilities, performance measures, budgets, and service volumes and levels. |
| 3.2 Performance of NSW Health entities | |
| Five NSW Health entities were not meeting the Ministry’s performance expectations at 30 June 2017. | The Ministry is managing the five entities in accordance with its performance review process. |
| 3.4 Emergency department response times | |
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Data provided by the Ministry indicates NSW Health again, on average, met emergency department triage response time targets across all triage categories for the fourth consecutive year. The Ministry manages performance across NSW Health to ensure patients presenting at emergency departments receive care in a clinically appropriate timeframe. |
Based on the Ministry’s data, local health districts/specialty networks are, on average, meeting triage targets despite increasing emergency department attendances. The data shows eleven local health districts met all triage targets in 2016–17, compared to eight in |
| 3.5 Emergency treatment performance | |
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The Ministry manages public patient access to emergency services in public hospitals. It has an emergency treatment performance target of 81 per cent of patients leaving emergency departments within four hours. |
Data provided by the Ministry indicates NSW Health maintained its overall emergency treatment performance in 2016–17, but did not achieve its target. The State average emergency treatment performance was 74.2 per cent (74.2 per cent in 2015–16). Based on the Ministry’s data, only four local health districts achieved the target in 2016–17, five in |
| 3.6 Ambulance response times | |
| NSW Ambulance has a response time target of 10.0 minutes for imminently life‑threatening incidents in New South Wales. | Data provided by the Ministry indicates NSW Ambulance response times for imminently life-threatening incidents of 7.5 minutes in 2016–17 was within the Ministry’s target. |
| 3.7 Transfer of care | |
| The Ministry has a target of 90 per cent for the number of ambulance arrivals within a 30 minute ‘transfer of care’ timeframe. | Data provided by the Ministry indicates the rate of ambulance arrivals within a 30 minute 'transfer of care' timeframe improved from 87.6 per cent in 2015–16 to 91.7 per cent in 2016–17, exceeding the Ministry’s target. |
| 3.8 Average length of stay in hospital | |
| Based on the Ministry’s 2016–17 data, the average length of stay for acute episodes was 3.0 days. The average length of stay in New South Wales hospitals is lower than the national average of 3.2 days (in 2015–16). | The Ministry’s data shows the average length of stay by patients for acute episodes has remained stable in New South Wales hospitals for four years. |
| 3.9 Elective surgery access performance | |
| Data provided by the Ministry indicates NSW Health continues to manage waiting times for elective surgery in public hospitals. | The Ministry’s data shows NSW Health improved on‑time admission of patients for elective surgery in 2016–17 despite a 1.8 per cent increase in admissions. While the result improved, only one of the three targets for elective surgery waiting times was met in 2016–17. |
| 3.10 Unplanned hospital re-admissions | |
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Data provided by the Ministry indicates NSW Health, on average, did not reduce the rate of unplanned hospital re‑admissions in 2016–17. The Ministry has a target of reducing unplanned hospital re‑admissions compared to the previous financial year. Low re‑admission rates may indicate good patient management practices and post-discharge care. |
The Ministry’s data shows eight local health district met the target to reduce the rate of re‑admissions compared to the previous financial year. The statewide average rate increased from 6.3 per cent to 6.4 per cent. |
| 3.11 Post discharge care for acute mental health patients | |
| NSW Health has a goal to increase community-based care to acute mental health patients after they are discharged. Continuity of care in the community can lead to reduced symptom severity, lower re‑admission rates, and improved quality of life. | The Ministry’s 2016–17 data shows the statewide average for post discharge follow-up of acute mental health patients within seven days was 70.0 per cent (66.0 per cent in 2015–16). The statewide average improved and met the NSW Health target of 70 per cent. Nine local health districts exceeded the NSW Health target. |
| 3.12 Mental health acute re-admissions | |
| NSW Health has a goal to reduce acute public sector mental health re-admissions. High re‑admission rates may indicate deficiencies in inpatient treatment and follow up care. | The Ministry’s data shows twelve local health districts did not achieve the NSW Health target of 13 per cent mental health acute re‑admissions in 2016–17. |
| 3.13 Unplanned and emergency re‑presentations | |
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NSW Health aims to reduce the number of unplanned and emergency re‑presentations to emergency departments. The Ministry’s 2016–17 data shows the State average of emergency department re‑presentations decreased marginally from 5.0 per cent in 2015–16 to 4.9 per cent. |
Patients attending rural emergency departments are more likely to re‑present within 48 hours of being discharged than those in regional or metropolitan emergency departments. |
| 3.14 Healthcare associated infection | |
| The national target for the rate of Staphylococcus aureus (golden staph) bloodstream infection is two cases per 10,000 bed days. | Data provided by the Ministry indicates the rate of golden staph bloodstream infection in New South Wales hospitals continues to be well below the target and national benchmark at 0.72 cases per 10,000 bed days in 2016–17 (0.75 in 2015–16). |
| 3.15 Patient experience and satisfaction | |
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The Bureau of Health Information analyses and reports on the results of patient surveys. The Bureau’s survey shows 65 per cent of adult admitted patients rated the care they received in hospital as ‘very good’ and 29 per cent rated it as ‘good’. |
NSW Health recognises that patient surveys are an important feedback mechanism on the health care system that can only come from personal experiences. |
Justice 2017
The following report focuses on key observations and findings from the most recent audits of law and order and emergency services agencies in the Justice cluster.
No qualified audit opinions were issued on Justice agencies' financial statements. However, agencies that used the Department of Justice as their service provider experienced difficulties finalising their accounts. This was due to issues with the department’s implementation of a new financial accounting and reporting system and the continued establishment of its Business Support Centre. The Department is working to remediate the new finance system.
| Financial reporting | Unqualified audit opinions were issued for all agencies' 30 June 2017 financial statements. However, some agencies' year end financial reporting procedures were impacted by the implementation of a new finance system and processes at the Department. |
| Early Close | Early close procedures continue to help agencies present audited financial statements on time, but there is room for further improvement. |
| NSW Police Force Death and Disability Scheme | The cost of the NSW Police Force Death and Disability Scheme was higher than the statutory target. |
| Fire and Rescue NSW Death and Disability Scheme | The Fire and Rescue NSW Death and Disability Scheme liability was $179 million, but is projected to reach $257 million by 30 June 2022. |
| Internal Controls |
The Department experienced significant, but avoidable internal control issues in its payroll and finance functions following implementation of a new IT finance system (Justice SAP) and continued establishment of its Business Support Centre. We found 94 internal controls issues, including 28 findings repeated from the previous year. |
| Human Resources | Agencies have not met State targets for managing annual leave balances. |
2. Service Delivery
| Domestic violence reoffending | The Department reports decreases in domestic violence reoffending rates, but they remain above the Premier's target |
| Rates of reoffending | Adult reoffending rates remain above the State's priority target. Last year, more than half had returned to prison or Corrective Services within two years of release. The Department has introduced initiatives to reduce reoffending, but their impact will not be known for several years |
| Road Fatalities | New South Wales' road fatalities decreased slightly in 2016–17, but remains slightly above the State priority target.. |
| NSW crime trends | NSW Bureau of Crime statistics and Research data shows the trend in most crime categories in New South Wales has been better than national trends over the last five years. |
| Adult inmate numbers | Departmental data shows that NSW prisons remained overcrowded in 2016–17, but the rate of growth in inmate numbers slowed. |
| Adult inmate resources | Data from the Department and the Justice Heath and Forensic Mental Health Network shows inmate access to some resources and services has not kept pace with increases in prison populations. |
| NSW District Court case backlog | After falling last year, the backlog of cases in the NSW District Court again increased but the age of backlog cases decreased, according to Departmental data. |
| Hazard Reduction works | The Office of the NSW Rural Fire Service advise adverse weather conditions reduced the total hectares of completed hazard reduction works by 50.7 per cent in 2016–17 compared to 2015–16. |
Financial reporting is an important element of good governance. Confidence in public sector decision making and transparency is enhanced when financial reporting is accurate and timely. Appropriate financial controls help ensure the efficient and effective use of resources and administration of agency policies. They are essential for quality and timely decision making.
This chapter outlines audit observations, conclusions and recommendations for financial reporting and controls of Justice cluster agencies.
| Observation | Conclusion or recommendation |
| 2.1 Financial reporting | |
| Unqualified audit opinions were issued for all agencies' financial statements. | Unqualified audit opinions were issued for all agencies' 30 June 2017 financial statements. The Department and agencies that used the Department as their service provider, were impacted by the Department's Justice SAP, and Business Support Centre implementations. |
| 2.2 Timeliness of financial reporting | |
| Most agencies complied with the statutory timeframes for completion of early close procedures and preparation and audit of financial statements. | Early close procedures continue to facilitate the timely preparation of financial statements and completion of audits. Early close procedures for some agencies was diminished by the Department's Justice SAP and Business Support Centre implementations. |
| 2.3 Death and disability schemes | |
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The cost of the NSW Police Blue Ribbon scheme reportedly decreased, but remains above the statutory target of 4.6 per cent of total NSW Police Officer's remuneration. The Fire and Rescue Death and Disability Scheme liability has almost doubled over the past five years. |
The Blue Ribbon Scheme cost $12.7 million or 10.4 per cent less in 2016–17 following an improvement in claims' experience. The was reflected in the cost of the scheme, which decreased from 6 per cent to 5.45 per cent of total NSW Police Officers’ remuneration. The Scheme’s liability was $179 million at 30 June 2017, almost double the $92 million recorded at 30 June 2013. A five-year period has been used due to the sensitivity of annual movements in the liability to changes in discount rates. According to Fire and Rescue NSW projections the liability will reach $257 million by 30 June 2022. |
| 2.5 Internal Controls | |
| There were significant payroll and general finance related issues resulting from the Department's Justice SAP system implementation and establishment of the Business Support Centre. | Recommendation: The Department should reinstate controls over financial information as soon as possible, and capture and apply lessons learned from recent project implementations, including LifeLink, in any relevant future implementations. |
| 2.7 Human Resources | |
| More than a third of Justice cluster employees have annual leave balances above the State's target. | Recommendation: Cluster agencies with annual leave balances above the State's target should proactively manage their leave balances. Particular focus should be given to employees who have taken little or no leave in the last 12 months. |
Achievement of government outcomes can be improved through effective delivery of the right mix of services, whether from the public, private or not for profit sectors. Service delivery reform will be most successful if there is clear accountability for service delivery outcomes, decisions are aligned to strategic direction and performance is monitored and evaluated.
The Justice cluster is an integrated cluster with key service delivery inter-dependencies. Achieving State priorities and ensuring communities are safe requires both upstream and downstream agencies to be adequately resourced. This is a delicate balance. Increases in frontline policing can subsequently impact the court system. Court backlogs can in turn increase prison overcrowding, and limit the opportunities for inmate rehabilitation. Failure to successfully rehabilitate prisoners and prevent reoffending could impact future police resourcing.
This chapter outlines our audit observations, conclusions and recommendations related to service delivery by agencies in the Justice cluster for 2016–17.
| Observation | Conclusion or recommendation |
| Data from the NSW Bureau of Crime Statistics and Research shows that domestic violence reoffending decreased from 15.9 per cent in 2014–15 to 15.5 per cent in 2015–16, but remains 4.8 percentage points above the Premier's target. | Reducing domestic violence reoffending is challenging. While there was a marginal improvement in 2015–16, the Justice cluster needs to continue efforts to reduce reoffending rates, if the Premier's priority target is to be met by 2019. |
| Productivity Commission data shows that in the year to 30 June 2016, 50.7 per cent of released prisoners had returned to prison and 55.1 per cent to Corrective Services, within two years of release. | There has been a consistent increase in reoffending rates over the last five years. Recommendation: The Department should reassess the sufficiency and effectiveness of measures aimed at reducing reoffending, including the recently announced initiatives, if the State priority target is to be met by 2019. A $237 million program to reduce reoffending was announced in August 2016. While new initiatives were introduced in 2016–17, their impact on reoffending rates will not be known for several years. |
| New South Wales' road fatalities per 100,000 people slightly exceeded the 2016–17 target. | Statistics from the NSW Centre for Road Safety shows that New South Wales' road fatalities decreased to 4.6 deaths per 100,000 people in 2016–17, slightly above the State priority target of 4.3 deaths. This is better than the 5.1 deaths recorded in 2015–16, but worse than the 4.0 deaths in 2014–15. |
| Between 31 December 2012 and 31 December 2016, the number of crimes has trended down in most crime categories, except for sexual assault, which has increased in each of the last five years. | The downward trend in most crime categories indicates the cluster is effectively achieving the State’s priority to prevent and reduce crime. However, the Department should assess whether the mix of offered programs is consistent with crime trends. |
| Department data shows that the NSW prison system remained overcrowded in 2016–17. Overcrowding of correctional centres can negatively impact all aspects of custodial life, and ultimately higher reoffending rates. |
Data from the Department shows that the inmate population reached 13,253, compared to an operational capacity of 13,402 beds on 27 August 2017. This equates to an operational vacancy rate of 1.1 per cent, which is significantly less than the recommended 5.0 per cent buffer. However, the rate of inmate growth slowed to 5.1 per cent, from 11.8 per cent in 2015–16. The Department should ensure that measures aimed at reducing reoffending are not compromised by continued overcrowding. Reoffending, will in the long term contribute to further overcrowding. |
| Adult inmate resources. | Inmate access to some resources and services has not kept pace with increases in prison populations, such as the ratio of nurses to inmates. In addition, Productivity Commission information on out-of-cell hours in 2015–16 shows New South Wales prisoners' average time out-of-cell of 7.8 hours was the lowest of any Australian jurisdiction. |
| After falling in 2015–16, the backlog of cases in the NSW District Court increased again in 2016–17. The age of cases however decreased in 2016–17 compared to 2015–16. | A working group which includes the Department and the Chief Judge of the District Court has identified a number of new measures to address the backlog. The Department needs to assess whether these measures will be sufficient, given that the backlog increased again in 2016–17. As noted in financial reporting and controls chapter, staffing levels in a number of just cluster agencies increased in 2016–17, in response to the backlog. |
| Department data shows the annual cost of a juvenile detainee decreased from $355,444 to $335,840 (5.5 per cent) in the three-year period between 2014–15 and 2016–17. | The Department has been analysing the Juvenile Justice division's operating costs in the context of declining custodial numbers, and has achieved some cost savings. The savings in part reflect decreases in the number of detainees. |
| The Office of the NSW Rural Fire Service data shows that completed hazard reduction works decreased in 2016–17. | The total hectares of completed hazard reduction works decreased 50.7 per cent in 2016–17 compared to 2015–16. The Office of the NSW Rural Fire Service attributes the decrease to adverse weather conditions during the peak burning period |
