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

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

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

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

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

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

The report includes comments on his financial audits of NSW Government health agencies for 2009-10. It found Health Support Services need to agree the respective responsibilities for implementing effective standardised internal controls with its customers and the Department. Control deficiencies have increased the risk that irregularities are not prevented or detected. The standardised internal controls should be implemented at Health Support Services and its customers as soon as practicable.

The report includes comments on his financial audits of NSW Government transport, planning and industry agencies for 2009-10. A key recommendation from the report is that the New South Wales Government identify lessons learnt from the metro experience and ensure that future decision processes are developed to ensure the State never again expends such a large amount of scarce transport funding dollars and valuable time on a project that does not proceed.

The report includes comments on his financial audits of NSW Government environment, climate change and water agencies. The audits of these agencies’ financial reports for the year ended 30 June 2010 resulted in one qualified Independent Auditor’s Report. Sydney Water has not recognised assets and liabilities of the Build-Own-Operate schemes in their statement of financial position. The combined profit after tax of the four largest water utilities increased substantially from $300 million in 2008-09 to $584 million in 2009-10. Distributions to the Government were $379 million up 17 per cent or $55 million from last year.

The report includes comments on his financial audits of NSW Government human services and technology agencies. The audits of these agencies’ financial reports for the year ended 30 June 2010 each resulted in an unqualified Independent Auditor’s Report. The number of supported accommodation places for people with a disability has increased by 517 during 2009-10.

The report includes comments on NSW Treasury and agencies in the finance and superannuation sectors. The New South Wales public sector superannuation funds’ investments were $42.2 billion at 30 June 2010, up from $38.5 billion in 2009. Investment returns reached 14.5 per cent in 2009-10. This is a significant improvement on the investment returns of up to negative 18.4 per cent at the peak of the global financial crisis in 2008.
 

The report includes comments on financial audits of government agencies in the electricity sector. The audits of the seven NSW electricity corporations’ financial reports for the year ended 30 June 2010 each resulted in an unqualified Independent Auditor’s Report. We did note significant uncertainty that may affect the value of power station assets due to the unknown impacts of any future carbon pollution reduction scheme and the Government’s proposed electricity industry reforms.