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Published

Actions for Ambulance services in regional New South Wales

Ambulance services in regional New South Wales

Health
Internal controls and governance
Management and administration
Service delivery
Shared services and collaboration
Workforce and capability

About this report

NSW Ambulance delivers emergency and non emergency medical services and transport to patients in New South Wales, and connects patients who do not need an emergency medical response with the most appropriate health provider.

NSW Ambulance operates as part of a network of public health services. 

This audit assessed the efficiency and effectiveness of ambulance services in regional New South Wales.

Findings

NSW Health is maintaining effective ambulance services in regional New South Wales, despite increasing demand. 

NSW Ambulance and the Ministry of Health use effective governance arrangements to monitor regional ambulance performance. NSW Ambulance and Local Health Districts (LHDs) communicate effectively to manage day-to-day operational challenges. However, the audit identified opportunities to improve the Ministry’s oversight of regional performance, and to enhance information sharing between NSW Ambulance and LHDs.

NSW Health is working to identify opportunities to reduce demand on the NSW Ambulance fleet and hospital emergency departments in regional New South Wales.

NSW Ambulance undertakes holistic service planning to efficiently deliver ambulance services in regional New South Wales.

Recommendations

The audit recommends that:

  • The Ministry of Health, eHealth and NSW Ambulance implement a new NSW Ambulance Electronic Medical Record system
  • The Ministry of Health and NSW Ambulance improve system oversight, monitoring and reporting of ambulance performance at the regional and metropolitan level
  • The Ministry of Health finalise its Transport for Health strategy and undertake a review of all non-emergency patient transport operators across the state
  • NSW Ambulance and LHDs improve strategic engagement with other NSW Health entities.

 

NSW Ambulance is a front line health service provider, delivering emergency and non-emergency medical services and transport to patients in New South Wales. It provides medical help to patients experiencing life-threatening injuries (referred to as high acuity patients), illness, and trauma, and connects patients who do not need an emergency medical response (referred to as low acuity patients) with the most appropriate health provider.

NSW Ambulance operates as part of a network of public health services. For NSW Ambulance to efficiently transfer patients to hospitals, hospitals need to have sufficient capacity to accept new patients. In regional contexts, distance is an important factor in the effective delivery of ambulance services.

The objective of this audit is to assess the efficiency and effectiveness of ambulance services in regional New South Wales, by answering the following questions:

  1.  Does NSW Health work effectively and efficiently to deliver ambulance services in regional and rural New South Wales?
  2. Is NSW Health effectively and efficiently planning and allocating ambulance services in regional New South Wales?
  3. Is the effectiveness of ambulance services in regional and rural New South Wales increasing over time?

The NSW Health agencies included in this audit are NSW Ambulance, the Ministry of Health, Murrumbidgee and Southern NSW Local Health Districts, eHealth NSW and HealthShare NSW.

The Ministry of Health expects Local Health Districts and state wide health services (such as NSW Ambulance) to engage and collaborate with stakeholders throughout service planning, but it is unclear whether the Ministry ensures that this occurs

The Ministry of Health is responsible for setting policy and strategy direction for the overall NSW Health system and provides guidance to all NSW Health entities (including Local Health Districts and NSW Ambulance) to inform service planning. Local Health Districts are responsible for ensuring that relevant policy objectives are achieved through the planning and funding of the range of health services that best meet the needs of their communities.

Service plans describe how services will achieve measurable health improvements and outcomes. NSW Health entities create service plans within a broader framework of system-wide goals, objectives and priorities. The Guide to Service Plans notes the importance of active and inclusive stakeholder engagement and requires that stakeholders should be engaged throughout the planning process. It also notes that state-wide health and shared services impacted by planning should be engaged to assist with the assessment of service requirements and resource implications.

The audit identified several examples of service plans and key initiatives developed within Southern NSW Local Health District which directly related to ambulance services, but where NSW Ambulance was not identified as a stakeholder. These include:

  • A business case for a new MRI service at Goulburn hospital: prior to the establishment of MRI services in Goulburn, there were no MRI services available within Southern NSW Local Health District, with the closest available provider located in Bowral (a private provider) or at the Canberra Hospital. This business case included decreased reliance on patient transport for imaging as a benefit.
  • The clinical service plan for Batemans Bay Community Health Centre (which will provide urgent care services in Southern NSW Local Health District).

Southern NSW Local Health District included NSW Ambulance as a stakeholder in cross-border service planning, including NSW Ambulance as a signatory in a cross-border memorandum of understanding for stroke patient transfers between Southern NSW Local Health District, Murrumbidgee Local Health District, Canberra Health Services and NSW Ambulance.

In Murrumbidgee Local Health District, the audit identified one example of the Local Health District including NSW Ambulance as a stakeholder in planning activities. In an updated terms of reference document for the Cootamundra Partnership Reference Committee, which was established to develop a new Health Service Plan for the Cootamundra Health Service, NSW Ambulance has been included as an invitee to this forum.

No health entities undertake whole-of-system service planning for non-emergency patient transport services in rural and regional New South Wales

Non-emergency patient transport services in regional and rural Local Health Districts are provided by HealthShare NSW (in Hunter New England Local Health District and Illawarra Shoalhaven Local Health District), Local Health Districts and NSW Ambulance. Both Southern NSW Local Health District and Murrumbidgee Local Health District engage private providers and community transport providers to supplement their patient transport capacity. When non-emergency patient transport services are at capacity, Local Health Districts rely on NSW Ambulance to assist with facilitating patient transfers.

Despite these challenges, there is no whole-of-system approach to service planning for patient transport. Whole-of-system planning would enable NSW Health to better manage risk and reduce reliance on the use of the NSW Ambulance fleet for patient transport in rural and regional New South Wales.

NSW Ambulance undertakes holistic service planning, but it did not engage Local Health Districts as stakeholders in the development of its recent Clinical Services Plan

As a state-wide health service, NSW Ambulance’s service planning broadly reflects the key deliverables articulated in its Service Agreement with the Secretary of Health. The Ministry of Health, in its responsibility for planning key services and as the ‘purchaser’ of ambulance services, ensures that NSW Ambulance service planning gives regard to the broader strategic policy environment.

In 2023, NSW Ambulance developed a new Clinical Services Plan 2024–2029 which includes a focus on supporting innovative approaches to clinical redesign and the delivery of new clinical programs. This includes strengthening collaboration between NSW Ambulance and Local Health Districts (particularly in care models for smaller rural communities and the involvement of paramedics in care and management of patients with chronic diseases).

NSW Ambulance consulted with the Ministry in the development of the Clinical Services Plan. It advised the audit that as the Clinical Services Plan largely reflects the objectives contained in its Strategic Plan, specific consultation with Local Health Districts was not required.

While NSW Ambulance is currently developing a five-year roadmap for the implementation of its Clinical Services Plan, it is unclear how NSW Ambulance intends to implement and resource these objectives in a timeframe that complements similar work across NSW Health.

The Southern NSW Local Health District Clinical Services Plan does not include specific consideration of the provision of patient transport and it is not clear whether it consulted NSW Ambulance during development

Southern NSW Local Health District’s 2023–28 Clinical Services Plan notes development of the plan was informed by local, state and national strategic directions for the health system, as well as outcomes and recommendations of relevant NSW Health and local reviews and inquiries.

Southern NSW Local Health District identified five focus areas in its 2023–28 Clinical Services Plan:

  • Supporting health and wellbeing through primary, secondary, and tertiary prevention
  • Providing care closer to home
  • Ensuring the sustainability of our existing services
  • Planning for growth and ageing in our population
  • Ensuring equity of access to care.

The Southern NSW Local Health District conducted community stakeholder consultation during development of its Clinical Services Plan, which resulted in feedback relating to challenges accessing health services. Community consultation feedback provided to Southern NSW Local Health District included the below key points relating to transportation to access health services:

  • a lack of public and/or private transport to and from health facilities
  • the additional burden on rural residents to access health care, noting that rural communities are often long distances from tertiary facilities
  • difficulties with transportation, noting community transport options are limited and it can be difficult to coordinate timing.

Southern NSW Local Health District’s Clinical Services Plan acknowledges the District consulted with internal stakeholders and other service providers to develop the plan, however, it is not clear whether Southern NSW Local Health District included NSW Ambulance in consultation for feedback. Additionally, while actions to address the areas of focus for the Clinical Services Plan relate to more localised access to care and delivery of care, as well as increased capacity and access, the plan does not include any actions specific to the provision of health related transportation.

Southern NSW Local Health District has committed to improve access to clinical services in rural and remote settings through the delivery of virtual care models

In its 2023-28 Clinical Services Plan, Southern NSW Local Health District commits to establishing a single point of entry so that patients can access appropriate care in ‘the right place, at the right time’ through (among other actions), an enhancement and expansion of its Virtually enhanced Community Care program and establishment of the Virtual Rural Generalist Service.

This audit identified some examples of Local Health Districts partnering to improve access to clinical service in rural and remote settings. In Southern NSW Local Health District, the Local Health District has partnered with Western NSW Local Health District to implement the Rural Virtual Generalist Service in smaller facilities across the District.

NSW Ambulance’s workforce planning effectively considers demand, workload, coverage, and capability requirements and it uses this evidence to allocate personnel and other resources to efficiently deliver ambulance services in regional New South Wales

NSW Ambulance has a well evolved and evidenced service planning methodology. NSW Ambulance established a service planning capability in 2010, and the current methodology (developed in 2022–23) includes analysis at the station and local network level of demand projections, staffing levels required, the drivers of effective and efficient supply provision, models of care, specialty resources and capital and infrastructure requirements. It includes a substantial focus on station location and the type of resource required.

Service planning informs (and is informed by) benefits realisation for new programs and initiatives (such as SWEP, SWIFT). NSW Ambulance has also developed a model to assess ‘unmet demand’ which it uses when determining sites for potential resource allocation and supplementation. NSW Ambulance continuously monitors its need and priority for additional or enhanced ambulance services and considers the following criteria:

  • volume of demand in town and surrounding area
  • distance from any ambulance service
  • current response times to emergency incidents
  • modelled improvement in response times if an ambulance station was commissioned
  • assessment of capacity and condition of closest ambulance station
  • capacity of NSW Ambulance volunteer service to provide a response.

NSW Ambulance continuously reviews key inputs into the service planning methodology, in particular its demand project methodology.

The main output of NSW Ambulance’s service planning methodology is the creation of a whole-of-state service model which describes the clinical service levels for each ambulance station. A station’s clinical service level determines both the number of clinical staff required and its specific roster pattern, as well as the staff type (graduate paramedic, specialist paramedic, etc.). NSW Ambulance then creates station rosters in alignment with this model.

In addition to the demand- and activity-based evidence sources NSW Ambulance uses to inform its service planning, NSW Ambulance includes evidence-based analysis in its business cases to support NSW Government funding requests, which also contain thorough descriptions of how the proposed funding would be allocated.

Recent investments in the regional paramedic workforce have allowed NSW Ambulance to reduce the use of on-call rostering and improve the working conditions of regional paramedics

NSW Ambulance rostering practices allow for some stations to utilise on-call resources, which can cause fatigue among paramedics rostered on shift following an on-call period.

Announced in the 2018–19 NSW Budget, the NSW Government announced funding for the recruitment of an additional 750 FTE paramedic and call-centre staff over four years commencing in 2018–19. The Statewide Workforce Enhancement Program (SWEP) was designed by NSW Ambulance to enable improvements in efficiency, coverage, quality, safety and performance across New South Wales and achieve response performance targets.

The SWEP business case detailed the extent to which NSW Ambulance relied upon various forms of premium labour in order to maintain service delivery and to meet community expectations in terms of response performance. The SWEP business case identified that $20 million in premium labour savings after the four-year implementation program would be achieved by reducing over-reliance on overtime.

SWEP resulted in an additional 376 FTE positions across ambulance stations in regional NSW, and allowed NSW Ambulance to reduce on-call rostering:

  • 22 regional/rural locations were converted to a 24/7 operating model removing overnight on-call
  • Removal of on-call at four locations that were previously operating on a 24/7 roster with overnight on-call
  • Reduction in on-call at eight locations.

NSW Ambulance measured premium labour savings achieved by monitoring callouts, crib-penalty payments, and dropped-shift overtime. In August 2022, as part of an internal review of the SWEP program, NSW Ambulance noted that the SWEP program achieved the reduction in premium labour expenditure and improved the working conditions of regional paramedics.

NSW Ambulance anticipates that recent changes to funding arrangements will result in a key program not achieving its intended benefits

In June 2022, the NSW Government announced a $1.76b investment in NSW Ambulance over a four-year period to fund 210 ambulance support staff (including the ongoing establishment of NSW Ambulance’s Virtual Clinical Care Centre (VCCC)), 1,878 new paramedics, 52 nurses, eight doctors, and build 30 stations.

Known as the Strategic Workforce InFrastructure Team program (SWIFT), NSW Ambulance designed the program to meet two objectives:

  • firstly, to improve patient outcomes, and the probability of survival from immediately life threatening conditions.
  • to achieve compliance with WHS obligations through the reduction of overrun shifts, overtime, and increase staff meal breaks.

When it was announced as part of the 2022–23 NSW Government budget, SWIFT was designed as a four-year program. However, recent changes to funding arrangements have changed the SWIFT timeframe and the program will now be delivered over seven years (at the same cost).

One of the key objectives of the SWIFT business case was to improve patient outcomes and the probability of patient survival by achieving response times within 15 minutes for 85% of P1 incidents by 30 June 2026. NSW Ambulance regularly reports and tracks performance on SWIFT indicators, and advises that as at 21 December 2023, the program was on track to meet the target.

NSW Ambulance modelled that the impact of extending the funding window from four years to seven years would add three years of additional demand growth and result in the program failing to achieve the 85% target by June 2026.

Appendix one – Response from agency

Appendix two – NSW Ambulance performance data

Appendix three – NSW Ambulance regional station map

Appendix four – NSW Ambulance key performance indicators

Appendix five – Types of patient transport operational across New South Wales

Appendix six – Scheduled psychiatric interhospital patient transfers

Appendix seven – NSW Ambulance governance bodies

Appendix eight – About the audit

Appendix nine – 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 #398 released 27 June 2024.

Published

Actions for Regulation insights

Regulation insights

Environment
Finance
Health
Local Government
Whole of Government
Compliance
Cyber security
Internal controls and governance
Management and administration
Procurement
Regulation
Risk

What this report is about

In this report, we present findings and recommendations relevant to regulation from selected reports between 2018 and 2024.

This analysis includes performance audits, compliance audits and the outcomes of financial audits.

Effective regulation is necessary to ensure compliance with the law as well as to promote positive social and economic outcomes and minimise risks with certain activities.

The report is a resource for public sector leaders. It provides insights into the challenges and opportunities for more effective regulation.

Audit findings

The analysis of findings and recommendations is structured around four key themes related to effective regulation:

  • governance and accountability
  • processes and procedures
  • data and information management
  • support and guidance.

The report draws from this analysis to present insights for agencies to promote effective regulation. It also includes relevant examples from recent audit reports.

In this report, we also draw out insights for agencies that provide a public sector stewardship role.

The report highlights the need for agencies to communicate a clear regulatory approach. It also emphasises the need to have a consistent regulatory approach, supported by robust information about risks and accompanied with timely and proportionate responses.

The report highlights the need to provide relevant support to regulated parties to facilitate compliance and the importance of transparency through reporting of meaningful regulatory information.

Image
Picture of Margaret Crawford Auditor-General for New South Wales in a copper with teal specks dress with black cardigan.

I am pleased to present this report, Regulation insights. This report highlights themes and generates insights about effective regulation from the last six years of audit.

Effective regulation is necessary to ensure compliance with the law. Effective regulation also promotes social, economic, and environmental outcomes, and minimises risks or negative impacts associated with certain activities. But regulation can be challenging and costly for governments to implement. It can also involve costs and impact on the regulated parties, including other public sector and private entities, and individuals. As such, effective regulation needs to be administered efficiently, and with integrity.

Having a clearly articulated and communicated regulatory approach is essential to achieving this outcome, particularly when this promotes voluntary compliance and sets performance standards that are informed by community expectations. A consistent approach to exercising regulatory powers is important: it should be supported by robust information about regulatory risks and issues, and accompanied with timely, proportionate responses. Providing relevant support to the regulated parties and coordinating activities to facilitate compliance and performance can generate efficiencies.

Finally, transparency matters. It matters so that government has oversight of and can be held accountable for its leadership of public sector compliance, and in regulating the activities of third parties. Transparency also matters because it can provide insights into the effective exercise of government power. To achieve this, meaningful regulatory information needs to be reported.

While these issues are most pertinent for government agencies that exercise traditional regulatory functions, they are also relevant to lead government agencies that provide a stewardship role in promoting compliance and performance by other government agencies in relation to particular areas of risk.

Over the past six years, our audit work has found many common and repeat performance gaps, creating risks, inefficiencies, and limiting outcomes of regulatory activities. In considering these gaps, this report provides public sector leaders with insights into the challenges and opportunities they may encounter when aiming for more effective regulation, including the good governance of regulatory activities. This includes insights for lead agencies that provide a public sector stewardship role. Through applying these insights and maximising regulatory effectiveness, unintended impacts on the people and sectors government serves and protects can be avoided or at the very least minimised.

 

Margaret Crawford PSM
Auditor-General for NSW

This report brings together key findings and recommendations relevant to regulation from selected performance and compliance audits between 2018 and early 2024 (19 in total), and from two reports that summarise results of financial audits during the same period. It aims to provide insights into the challenges and opportunities the public sector may encounter when aiming to enhance regulatory effectiveness.

The report is structured in two sections, each setting out insights from relevant audits and providing summaries as illustrative examples.

Section 3 is focused on insights from audits of agencies that administer regulatory powers and functions over other entities or activities (typically known as 'regulators'). The powers and functions of regulators are defined in law, and often relate to issuing approvals (e.g., licensing) for certain activities, and/or monitoring allowable activities within certain limits. Regulators often have compliance and enforcement powers that can be exercised in particular circumstances, such as when a regulated entity has not complied with relevant requirements.

Agencies may be primarily established as regulators or perform regulatory activities alongside other functions. Depending on the context, the regulated activity may relate to other state agencies, local government entities, non-government entities or individuals.

Section 4 summarises insights from a selection of audits of agencies that provide a stewardship role in promoting compliance by and performance of other state agencies and local government entities in relation to specific regulations or policies. These policies may or may not be mandatory and, unlike a more traditional regulator, the coordinating agency may not have enforcement powers to ensure compliance.

These policies, and accompanying guidelines and frameworks, are typically issued by ‘central agencies’ such as the Premier's Department that have a public sector stewardship role. They can also be issued by agencies with a leadership role in particular policy areas ('lead agencies'). While individual agencies and local government entities implementing these policies are responsible for their own compliance and performance, lead and central agencies have an oversight role including by promoting accountability and coordinating activities towards achieving compliance and performance outcomes across the public sector.

Readers are encouraged to view the full reports for further information. Links to versions published on our website are provided throughout this document, and a full list is in Appendix one. An overview of the rationale for selecting these audits and the approach to developing this report is in Appendix two.

The status of agencies' responses to audit recommendations

Findings from the audits referred to in this report were current at the time each respective report was published. In many cases, agencies accepted audit recommendations, as reflected in the letters from agency heads that are included in the appendix of each audit report.

The Public Accounts Committee of the NSW Parliament has a role in reporting on and ensuring that agencies respond appropriately to audit recommendations. Readers are encouraged to review the Public Accounts Committee's inquiries on agencies' implementation of audit recommendations, which can be found on the Committee's website.

Published

Actions for Effectiveness of SafeWork NSW in exercising its compliance functions

Effectiveness of SafeWork NSW in exercising its compliance functions

Finance
Industry
Health
Compliance
Internal controls and governance
Management and administration
Procurement
Project management
Regulation
Risk

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 real-time 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

SafeWork NSW is the work health and safety regulator in New South Wales. It was established by the State Insurance and Care Governance Act 2015.

As the regulator, SafeWork NSW is responsible for, among other things, enforcing compliance with the Work Health and Safety Act 2011 (the WHS Act) and the Work Health and Safety Regulation 2017. The regulator’s full functions are set out in section 152 of the WHS Act.

SafeWork NSW’s operations are guided by seven regulatory priorities for 2023, which contribute to three strategic outcomes:

  • Workers understand their rights and responsibilities.
  • Employers ensure that work is healthy and safe, with no advantage for cutting corners.
  • Regulation is fair and efficient.

This audit assesses the effectiveness of SafeWork NSW in monitoring and enforcing compliance with the WHS Act, through the examination of three lines of inquiry:

  1. Does SafeWork NSW have evidence-based processes to set its objectives and priorities for monitoring and enforcing compliance?
  2. How effectively does SafeWork NSW measure and report its performance in monitoring and enforcing compliance against the WHS Act?
  3. Are SafeWork NSW's policies and procedures for monitoring and enforcing compliance applied consistency across different sectors?

As SafeWork NSW is part of the NSW Department of Customer Service (DCS), the department is the auditee. Prior to 2019, SafeWork NSW was located in the former Department of Finance, Services and Innovation. Unless otherwise stated, any reference to SafeWork NSW should be read as including the broader department in which it sits.

This chapter considers whether SafeWork NSW has evidence-based processes to set its objectives and priorities, including how it takes into account operational feedback and expertise. It also includes how existing and emerging risks are assessed as part of the priority-setting process, and how planning and prioritisation takes into account resourcing, including workforce skills and capacity.

SafeWork NSW's operating model is now based on annual regulatory priorities, rather than longer-term priorities

From 2016 to 2022, SafeWork NSW worked under a six-year Work Health and Safety Roadmap (‘the Roadmap’). The Roadmap was revised in August 2018 and included the following statements:

The WHS Roadmap for NSW, along with the BRD Strategic Plan, provides a clear line of sight between our strategic objectives and the activities that will allow us to deliver our overall outcomes.

This Roadmap spans 2016-2022 but it will be refreshed and released every two years to ensure it stays relevant.

 

In addition to the Roadmap, SafeWork NSW operated under its 2019–20 Strategic Business Plan.

After SafeWork NSW was moved into DCS, the Roadmap was subject to a mid-term evaluation by ARTD Consultants in 2020. SafeWork NSW management subsequently accepted all nine recommendations of that mid-term evaluation, which included the following:

  • Strengthen business intelligence data systems to allow managers and inspectors to access to real-time data on safety incidents and workers compensation claim data (Rec 5).
  • Improve evidence available to assess Roadmap outcomes in 2022 (Rec 9).

In 2023, SafeWork NSW replaced its six-year Roadmap with a model of setting annual regulatory priorities. Seven regulatory priorities were set for 2023. These priorities were:

  •  gig economy – increase safety and WHS compliance in the sector, particularly food delivery riders and health care
  • safety around moving plant – reduce workplace safety incidents, particularly forklifts
  • seasonal workplaces – increase WHS compliance to support itinerant workers, particularly in the agricultural sector and those working with amusement devices
  • psychological safety – reduce the prevalence of psychological injury at workplaces, with a focus on mental health and well being
  • respect at work – reduce the incidence of bullying, sexual harassment, and customer aggression in the workplace, particularly in make dominated sectors and healthcare
  • exposure to harmful substances – reduce the incidence of worker exposure to dangerous substances in the workplace, particularly silica and dangerous chemicals
  • falls – reduce the incidence of falls from heights with a particular focus on construction.

These priorities are intended 'to deliver on three strategic outcomes’:

  • Workers understand their rights and responsibilities.
  • Employers ensure that work is healthy and safe, with no advantage for cutting corners.
  • Regulation is efficient and fair.

As SafeWork NSW works to deliver on these outcomes, the focus is on priority or vulnerable groups of workers – these being younger workers, workers from culturally and linguistically diverse backgrounds (especially newly arrived workers), and Aboriginal people.

Shorter-term priorities are intended to enable SafeWork NSW to be more responsive to work health and safety risks and were developed in consultation with operational staff

The adoption of shorter-term priority-setting is intended to enable a more agile approach to regulation that, according to DCS, is better able to adapt to changes in risk profiles and industries. It was put to the audit by some interviewees that the six-year plan was less able to respond to rapid changes in the economy that may lead to quickly emerging work health safety risks. An example commonly cited was the significant increase in gig economy workers, including in areas such as food delivery workers and personal care workers. It was put to the audit that this example highlighted new WHS risks unique to those emerging workplaces.

According to DCS, in addition to being more agile and responsive to macro changes in the workforce, the annual priorities are intended to enhance accountability by creating a more timely and contemporaneous link between activities and outcomes. The more immediate nature of annual priorities is also designed to provide a more immediate and tangible link to SafeWork NSW’s activities and ensure better accountability for delivery.

The annual priorities are intended to complement SafeWork NSW’s commitments under the national Australian Work Health and Safety Strategy 2023-33. This strategy sets a high-level vision and goal for Australia’s work health and safety regulators, including to address agreed persistent challenges, such as psychosocial risks, vulnerable workers, and ensuring that small businesses are adequately supported to meet their work health and safety obligations.

The process for developing regulatory priorities for 2023 involved internal consultation with SafeWork NSW executive directors, directors, managers, inspectors, project leads, as well as consultation with external stakeholders and experts. There is evidence that SafeWork NSW considered the feedback it received, including from its inspectors.

SafeWork NSW staff identified potential risks that SafeWork NSW will need to manage as the process for developing regulatory priorities continues to develop

The audit team interviewed almost all SafeWork NSW executive directors, directors, and team managers, particularly those performing regulatory functions. These interviews revealed a strong level of commitment to the purpose and functions of SafeWork NSW, as well as a shared desire to see the organisation fulfil its potential.

In regard to the annual priorities, senior executives and the majority of team managers we interviewed supported the adoption of annual priorities and expressed confidence that establishing annual priorities would improve the effectiveness of SafeWork NSW in delivering its compliance functions. It was noted by SafeWork NSW that the shift towards regulatory priorities 'brings us to a level of maturity mirroring the approach of regulators such as ASIC and the ACCC'.

While most staff interviewed during this audit welcomed the sharper focus and greater flexibility afforded by shorter-term priorities, others identified a range of risks. Some experienced people managers in SafeWork NSW expressed significant doubts about the pursuit of annual regulatory priorities. Risks identified during audit interviews included:

  • That the short-term focus had prevented SafeWork NSW from establishing a longer-term goal or vision.
  • That the annual priorities were simplistic and lacked sufficient detail to engage the regulator, industry, and the community.
  • That short-term priorities would make it difficult to meaningfully measure and report progress, especially for activities and initiatives that may take longer to achieve demonstratable change.
  • That the process of considering the next annual priorities may need to commence well before initiatives for the current year have been completed (or even commenced), hindering how effectively lessons can be incorporated into future planning.
  • That frequent changes in regulatory priorities may make it difficult to ensure that the SafeWork NSW workforce has appropriate capability and capacity, particularly for potentially complex emerging threats such as artificial intelligence in workplaces.

In response to these risks, SafeWork NSW has noted that:

  • SafeWork NSW has a separate vision in addition to the regulatory priorities. This is 'healthy, safe and productive working lives'.
  • A review process will occur to understand what went well and what did not from the first year of regulatory priorities before finalising priorities for 2024.
  • Planning will improve over time as the process reoccurs, and lessons learned will be linked to future priorities.

The inability to achieve full ‘buy-in’ from experienced people managers in SafeWork NSW suggests that change management, including consultative and communication processes, has not been completely successful. SafeWork NSW advised that this initiative was a significant shift for all its staff and in particular middle management. Given this, the leadership of SafeWork NSW should prioritise investment in effective change management processes, especially if the annual regulatory priorities are anticipated to change in 2024.

Importantly, the SafeWork NSW leadership team should undertake strategic planning to ensure that a meaningful set of longer-term priorities underpin their investment decision-making on organisational fundamentals, such as a capable and sustainable workforce and fit-for purpose technology systems. Without this, there is a real risk that the regulator's business needs and priorities will be overtaken by the priorities of a much bigger department.

SafeWork NSW consulted with external stakeholders in determining its 2023 annual regulatory priorities

SafeWork NSW developed a discussion paper in 2022 for external stakeholders as a precursor to consultation on its 2023 annual priorities. This discussion paper outlined an intent by SafeWork NSW to develop a new strategy that would prioritise activities that were the biggest points of leverage to drive material change and were the biggest risks and most important trends affecting WHS in NSW.

SafeWork NSW considered expert feedback and expertise in the development of its regulatory priorities through this process. A summary document detailing the rationale for its regulatory priorities provides evidence that feedback from external stakeholders, such as unions and industry groups, were taken into account.

SafeWork NSW has not established a formal process for determining its regulatory priorities for 2024 and beyond

SafeWork NSW has an indicative timeline for preparing its 2024 priorities which provides that the priorities will not be settled until March 2024 and will be based on the results of the previous year’s priorities to December 2023. However, no ongoing process for determining annual priorities in each future year was settled at the time of writing this report. Some priorities might be expected to remain relatively constant, especially persistent challenges such as preventing falls from heights. However, if the annual priorities model is to meet the expectation of being agile, then new and emerging priorities will need to be identified, understood, scoped, and responded to with relatively short notice.

Elements of the 2023 regulatory priorities will overlap with any new or revised priorities, such as the monitoring and evaluation framework, and the three-year Construction Services Blueprint. SafeWork NSW explains that these longer-term initiatives are 'intended to support the delivery of priorities that are likely to run over many years, providing more granular detail on specific drivers of harm, regulatory responses and targets'.

SafeWork NSW does not effectively use data to inform its priority-setting or assessment of risk, despite adopting the recommendations from the 2020 mid-term Roadmap evaluation

SafeWork NSW states that it chose its regulatory priorities in 2023 based on the following factors - potential for serious harm or death, new or emerging risks, and increases in the frequency of an issue. An emerging issue is where:

A hazard and/or risk to health and safety relating to a new or existing product, process or service was not previously known or fully realised and SafeWork NSW intervenes to address the workplace health and safety risks for example, guidance material, training, regulatory change. 

SafeWork NSW has a substantial data repository, with over 20 years of case and activity data contained in its Workplace Services Management System (WSMS). However, SafeWork NSW does not effectively interrogate this data to provide an evidence base for its regulatory functions.

SafeWork NSW has only recently established a data governance committee. SafeWork NSW also advised that a data science function was created within the Centre for Work Health and Safety during 2023, repurposing existing resources and supported by a business intelligence working group comprising of inspector representatives from operational directorates.

While this data science function is newly created, SafeWork NSW does not have a strategic business intelligence function that is both recognised and understood across each directorate and team, and the ability of its technology infrastructure to deliver sophisticated strategic and operational data intelligence has been limited.

As a result of this lack of central coordination and capability, directorates have sought to develop their own data analysis capability, with inconsistent, fragmented and potentially duplicative results. The audit did find specific (albeit isolated) examples of data being used to inform decision-making, though these efforts were disparate and uncoordinated at the directorate level.

SafeWork NSW said that data is used to inform leadership discussions at the quarterly SafeWork NSW Leadership Meetings, and monthly operational executive meetings. The audit did not review the agenda papers for these meetings.

At the 2020–21 NSW Parliament Budget Estimates Committee hearing, SafeWork NSW stated that it:

…used predictive analytics and machine learning to generate a WHS rating system leveraging a large dataset to aid decision-making. The WHS rating supports an evidence-based approach to identifying high risk workplaces and provides additional data-based evidence to assist in decision-making'. 

SafeWork NSW has started to use artificial intelligence to interrogate historical compliance data to rate the risk of different employers. However, this is used inconsistently across SafeWork NSW and there is limited evidence about its effectiveness. A similar tool does not exist for industry or product-related trends or relationships that may assist SafeWork to proactively identify high-risk workplaces and issues.

Outdated technology and uncertainty in planning its replacement is limiting SafeWork NSW's ability to effectively use its data for analytics and insights

SafeWork NSW uses WSMS to manage work health and safety data. This system has been in place for over 20 years. It was noted in interviews conducted during this audit that this data system is at the end of its effective life.

Issues noted by users of WSMS include:

The lack of governance associated with data management of WSMS. There is no data custodian, and a formalised data quality assurance process does not exist. This means that data can be extracted from the system with no controls on the accuracy of the analysis.

Access to WSMS cannot be tracked (and is therefore not auditable).

  • Data quality is variable, depending on the quality of notes provided by inspectors (with individuals noting that these notes could be full of speculation), and inconsistent approaches to entering information into the system. At the same time, inspectors noted that entering information into the system can be an administrative burden due to duplication and time requirements.
  • Analysis cannot readily be undertaken on a geographic basis (for example, all high-risk employers within a particular region).
  • As WSMS does not track information about the directors of companies, it is unable to identify risks associated with 'phoenixing', where directors of wound-up businesses establish new entities, or other forms of related-entity risk. The audit team linked WSMS data with ASIC data to match company directors with company and notice data. This was done in order to understand the additional intelligence that could be used to inform risk-based decision-making. As an example, the audit found that there is a large number of companies that have not received notices from SafeWork NSW but may be at higher risk due to the conduct of their directors:
    • There were approximately 151,000 companies with directors that were also linked to at least one other company that had received at least one type of notice from SafeWork NSW.
    • There were approximately 24,500 companies with directors that were also linked to one or more companies that had cumulatively received over 100 notices from SafeWork NSW.
    • There were approximately 8,600 companies with directors that were also linked to one or more other companies that had cumulatively received over 400 notices from SafeWork NSW.

In addition to the feedback provided by WSMS users within SafeWork NSW, the audit team also found related data quality issues during the course of our own analysis, including:

  •  Industry analysis is more challenging to perform because specific industry data points and grouping details are not captured in WSMS.
  • There was no systematic method to identify all silica-related incidents. The search terms were not standardised and relied on judgement, for example: ‘silic’ (potentially capturing both ‘silica’ and ‘silicosis’) and ‘benchtop’, though SafeWork NSW advised that consultation with subject matter experts informed these searches. There is a high-risk of false positives and incomplete analysis without time intensive manual review of each identified case. WSMS was not readily able to provide data on silica-related complaints without workarounds and manual file review (which proved unreliable) and requiring significant effort from data staff in both the Audit Office and SafeWork NSW.
  • Test data is captured in production systems, rather than in test systems. These records do not have a unique identifier and are difficult to identify and isolate for business intelligence analysis.
  • Data validations are not enforced (for example, on Australian Business Number, Australian Company Number columns). Instead, the data entry fields allow for incorrect details to be captured or left blank without explanation from the staff entering the data.

SafeWork NSW provided advice to the audit team that an upgrade of WSMS was planned as part of the broader e-regulation program across DCS (that is, the single digital platform for all 28 business regulators). However, this upgrade is now uncertain as there is no funding for SafeWork NSW to be onboarded to the new platform. This means that for the foreseeable future SafeWork NSW will be constrained by the limitations inherent to WSMS.

SafeWork NSW took around eight years to actively and sufficiently respond to the emerging risk of respirable crystalline silica in manufactured stone

Silicosis is a progressive, occupational lung disease resulting from inhalation of respirable crystalline silica (RCS). Silicosis is one of the oldest known occupational diseases, particularly affecting industries like mining. In Australia, silicosis has been a known cause of death and disability for over 100 years. This disease is preventable through appropriate workplace practices in a hierarchy of controls, which includes the use of correct personal protective equipment.

The use of manufactured stone for applications such as kitchen benchtops became popular in Australia in the early 2000s. Other substances that contain silica, such as rock, stone, clay, gravel, concrete and brick, may contain between 2% and 40% silica. In contrast, manufactured stone contains up to 95% silica. Workers exposed to respirable crystalline silica from manufactured stone are more likely to develop severe silicosis (and other serious lung diseases), and more quickly, than workers exposed to silica from other sources.

In 2010, international research was published that pointed to the specific heightened risk posed by the high silica content of manufactured stone used primarily for kitchen countertops and bathroom fixtures. This was confirmed by subsequent research published in 2012, which concluded that, in regard to a documented outbreak of silicosis among manufactured stone workers in Israel:

This silicosis outbreak is important because of the worldwide use of this and similar high-silica-content, artificial stone products. Further cases are likely to occur unless effective preventive measures are undertaken and existing safety practices are enforced. 

This research was relevant to Australia as the sample of workers was derived from the same Israeli-based manufacturer and exporter of manufactured stone that supplies the majority of the product used in Australia.

The first identified group of related workers who contracted silicosis in NSW was reported in literature in 2015. Further cases have been reported in the media since 2015. These included examples of relatively young workers developing silicosis, presumptively from inhaling silica dust derived from manufactured stone.

In 2017, SafeWork NSW listed RCS as one of the top ten priority chemicals in its 2017–2022 Hazardous Chemicals and Materials Exposures Baseline and Reduction Strategy (dated October 2017).

A legislatively-mandated case finding study conducted by SafeWork NSW in 20213 reported that screening conducted by icare between 2017–18 and 2019–20 found an average of 29 cases per year of silicosis among workers in the manufactured stone industry.4 Despite the relatively small size of this workforce, this was three times the number of cases of all workers engaged in all other at-risk industries.

While the heightened risk posed by respirable crystalline silica in manufactured stone was first published in research in 2010 and detected in cases from 2015, SafeWork NSW’s first substantial practical response commenced in 2018–19.

From July 2018, SafeWork NSW convened a Manufactured Stone Industry Taskforce, including representatives from industry, unions, health, education and other government agencies. During the term of this taskforce (which ended at 30 June 2019), SafeWork NSW conducted 523 visits to 246 manufactured stone sites. These inspections resulted in 656 improvement notices being issued, along with 43 prohibition notices (this included matters not related to silica). Prior to this, the extent of SafeWork NSW’s active response to the emerging risk was to conduct a limited inspection program of six work sites in May 2017 (one site) and August 2017 (five sites). The results of these six workplace visits were incorporated into a research project report that was finalised in August 2018.

In the period from 2012 to 2018, SafeWork NSW also received complaints about silica-related matters, including matters not related to manufactured stone. These are detailed in Exhibit 1 below. The number of complaints was a relatively small proportion of all complaints received, though the number increased after 2018. This increase may be a result of increased community and industry awareness through media reporting and SafeWork NSW’s proactive audit work.5 The majority of these complaints did not result in further regulatory action by SafeWork NSW beyond preliminary inquiries and, in some cases, site visits. The right-hand column of the below table shows key events leading up to and shortly after SafeWork NSW’s first regulatory interventions.

Exhibit 1: Silica-related complaints made to SafeWork NSW, 2012–2023
YearNumberSilica-related activity and events
201255International published research reiterates 2010 findings of a link between manufactured stone and silicosis.
201352 
201455 
201538First NSW case series linked to manufactured stone industry.
201654Youngest known case of silicosis in NSW admitted to hospital.
201770Crystalline silica listed as the second priority chemical (out of 10 priority chemicals) by SafeWork NSW. Media reporting on the ABC.
2018104SafeWork NSW commences proactive work. Manufactured Stone Industry Taskforce commenced. Media reporting on the ABC, The Project and Daily Mail on silicosis.
2019173NSW Parliamentary Dust Diseases Review.
Probable first Australian death from silicosis caused by manufactured stone.
2020210Silicosis becomes notifiable, fines introduced, workplace exposure standard halved.
2021174Respirable crystalline silica exposure in the NSW manufactured stone industry case finding study undertaken.
Media reporting by The Project and ABC 7.30 Report.
2022193 
2023*381 
TOTAL1559 

*         2023 data are to 30 November 2023.
Note: Complaints received by SafeWork NSW where the issue description includes ‘silic*’ or ‘benchtop’. This will include silica derived from sources other than manufactured stone, including relating to those products listed in the Safe Work Australia 2020 national guide.
Source: Audit Office analysis of WSMS data.

High-profile media reporting in 2018, 2021, and early 2023 appeared to provide impetus to SafeWork NSW’s regulatory actions. SafeWork NSW subsequently conducted further rounds of proactive compliance, education and awareness activities among identified workplaces. This work increasingly targeted high-risk workplaces. Since 2018–19, SafeWork NSW has conducted three rounds of workplace inspections that have progressively focused on the highest risk workplaces. This program has adopted a strategic and evidence-based approach.

Since October 2019, 17 matters were progressed to further investigation with a view to prosecution. Five silica-related matters have been filed in court for prosecution. Three of these matters were still in court at the time of this audit, and two matters have been finalised.

In 2020, NSW introduced a range of legislative reforms including:

  • Banning the practice of dry cutting engineered stone containing crystalline silica. Maximum penalty of $30,000 for a body corporate and $6,000 for an individual, with on-the-spot fines for uncontrolled dry processing of engineered stone.
  • Halving the Workplace Exposure Standard from 0.1mg/m3 to 0.05 mg/m3 (ahead of the national deadline to implement it).
  • Silicosis becoming a notifiable disease requiring clinicians to report each case of silicosis diagnosed in NSW. Those notifications are shared with SafeWork NSW to manage a NSW Dust Disease Register. An annual report is tabled in Parliament and published on the NSW Government website www.nsw.gov.au (NSW Silica Dashboard) alongside some information on compliance activities.
  • On 27 October 2020, silicosis became a notifiable disease requiring clinicians to report each case of silicosis diagnosed in NSW. Those notifications are shared with SafeWork NSW to manage a NSW Dust Disease Register. In August 2021, SafeWork NSW published the first NSW Dust Disease Register Annual Report, detailing diagnosed cases of silicosis, asbestosis, and mesothelioma in NSW during 2020–21 and the Case Finding Study Report on silica exposure in the Manufactured Stone Industry. The Annual Report is tabled in Parliament and published on the NSW Government website www.nsw.gov.au (NSW Silica Dashboard) alongside some information on compliance activities.

Also in 2020, SafeWork NSW released the NSW Dust Strategy 2020-2022, which identified silica as one of three focus areas for the regulator.

In February 2022, New South Wales introduced the NSW Code of Practice – Managing the risks of respirable crystalline silica from engineered stone in the workplace, based on the National Model Code that was finalised in late 2021. The Code provides practical information on how to manage health and safety risks associated with respirable crystalline silica from engineered stone in the workplace.

Silica continues to be a priority for SafeWork NSW in 2023 under the SafeWork NSW regulatory priority: Exposure to harmful substances - Reduce the incidence of worker exposure to dangerous substances in the workplace, particularly silica and dangerous chemicals.

The online NSW Silica Dashboard provides members of the public with information on SafeWork NSW’s silica workplace visit program that commenced in 2018 through to 30 September 2023.

Organisational silos within SafeWork NSW contribute to inconsistent regulatory decision-making, duplication of effort, and inefficient practices

There is evidence indicating that SafeWork NSW works in silos, with limited communication, collaboration, and awareness of activities across functions.

We note the finding made by the South Australian Independent Commission Against Corruption in reviewing SafeWork SA:

A failure to ensure adequate and appropriate communication within an agency can result in duplication of effort, inconsistent approaches to the same function and the creation of unique risks. 

The existence of silos was evidenced by the audit team through:

  • The inconsistent application of policies and procedures. For example, performance management practices differ between directorates and individual teams. This is further discussed in Chapter 4.
  • How data is used across SafeWork NSW. While there are pockets of effective data analysis, they often seem to operate in isolation from each other, resulting in duplication and a failure to achieve economies of scale and the benefits of synergies.
  • Limited feedback loops across SafeWork NSW. SafeWork NSW does not have an overarching continuous improvement framework, and communication surrounding decision-making is limited. For example, where the Investigations and Emergency Response team decide to discontinue an investigation, there is no requirement to inform the referring inspector that this has occurred, or the rationale behind the decision.

Similar findings on the existence of silos, and the need to improve teamwork and collaboration, have been made by SafeWork NSW in internal reviews undertaken as part of restructuring activities.

This audit also found broader issues of concern regarding organisational structure. SafeWork NSW staff frequently expressed reservations about the effectiveness of the current structure and compared it unfavourably to the regulator’s previous form. In particular, some SafeWork NSW staff said that the existing structure:

  • reduced SafeWork NSW’s profile as the regulator for work health and safety in NSW
  • confused lines of accountability for senior strategic leadership
  • diluted the regulator’s focus and the cohesion of the staff.

The Independent Review of SafeWork NSW being conducted by Mr Robert McDougall KC is examining organisational structural issues. In the interim, the decision has been made by DCS that SafeWork NSW will transition out of the Better Regulation Division of DCS from 1 December 2023, to become a standalone division within DCS.

Organisational restructuring and any uncertainty that it involves in the short- to medium-term could impact on the SafeWork NSW's progress in achieving desired policy outcomes, especially if the change management process is not effective.

The lack of a strategic approach to data and intelligence by SafeWork NSW hampers effective targeting and prioritisation of proactive compliance activity

Effective proactive compliance work is an important part of an effective regulatory approach. For SafeWork NSW, these activities range from dedicated state-wide programs over extended periods through to specific, localised ‘blitzes’ of targeted workplaces. These activities are performed alongside 'reactive compliance activities' such as responding to incidents, complaints, or requests by ‘persons conducting a business or undertaking’ (PCBUs) for education and awareness-building activities.

In accordance with Safe Work Australia’s National Compliance and Enforcement Policy, proactive compliance activities are intended to be:


…conducted in line with the activities of assessed highest risk and the strategic enforcement priorities.
 

SafeWork NSW’s proactive compliance activity is intended to be based on:

  • SafeWork NSW’s annual regulatory priorities
  • data and insights on high-risk harms, industries or businesses
  • the identification of new or emerging risks
  • targeted programs focused on reducing the greatest harms.

As discussed earlier in this section, SafeWork NSW does not effectively use data to inform priorities or to assess risk.

While managers at SafeWork NSW referred to an overall target for proactive work (it was commonly suggested that between 60% and 70% of regulatory activities should be proactive), we were informed by the Head of SafeWork NSW (and Deputy Secretary of the Better Regulation Division) that there was no specific target.

In practice, there is significant variation in the mix of proactive and reactive compliance activities between directorates and teams, with some teams doing either largely proactive or largely reactive activities. This can depend on the nature of the industry sectors and geographic areas in which they function, and the extent of teams’ non-discretionary reactive workload.

Planning, implementing and evaluating proactive compliance work is inconsistently done across SafeWork NSW, making it hard to assess whether resources are being used effectively

The audit team found widely differing approaches to how directorates and even individual teams within the same directorate used evidence to identify and target risk areas for proactive work programs, such as blitzes. While there was evidence that data was used to inform how activities would be targeted, this was not consistent. For example, some teams draw on intelligence generated by dedicated interventions staff in their directorates, while others rely entirely on opportunistically identifying potential worksites for proactive work by driving or walking past sites. The audit found examples of effective use of data and intelligence to plan proactive activities.

There is also no consistent approach to planning, implementing, or evaluating proactive compliance work across SafeWork NSW. Even within the same directorate, there can be significant differences in approach. Some of these differences can be explained by the different types of matters and circumstances that apply to PCBUs across different industries. However, inconsistencies extended to fundamental aspects of proactive compliance work such as:

  • the rigour of evidence and intelligence by which priorities are determined and targeted, which was partly reflected by directorates having different levels of internal data capability
  • the degree of project management capability and resourcing, including where some directorates have dedicated specialist project management skills, while others rely on inspectors to perform project management
  • the extent to which different directorates and teams had a clear approach to how programs would be evaluated, beyond simply measuring activity, something which appears undermined by the absence of an evaluation framework
  • whether the strategic intent of programs and blitz activities are to drive meaningful behavioural change or just, as some interviewees expressed it, to ‘make sure they tick some boxes.’

These material differences and lack of consistency in approaches to proactive compliance makes it difficult to assess whether these activities are effective and efficient regulatory interventions. While there was strong support for proactive compliance activity among both managers and inspectors (indeed, most thought that there should be more proactive activity), there were relatively few who could provide an evidence base to justify the significant staff resources that they consume.

The Centre for Work Health and Safety has a function to improve data, research, and evidence to support risk identification

The Centre for Work Health and Safety (CWHS), a functional unit within SafeWork NSW, was established in December 2017 under the WHS Roadmap 2016-2022. Among other things, it has an insights and analytics function. Its establishment was driven by the recognition that SafeWork NSW was not effectively using data and evidence to support its decision-making and activities.

Two pieces of work undertaken by the CWHS are intended to provide SafeWork NSW with greater capability in identifying and addressing risk in both strategic and operational contexts.

First, the WHS Radar project is intended to deliver ‘…regular and actionable insights about WHS in an Australian context.’ Conducted twice a year, the WHS Radar synthesises information about work health and safety by drawing on five sources of evidence:

  • existing data, including incidents, worker’s compensation, ABS, and prosecutions
  • analysis of grey literature (non-peer reviewed sources, such as government reports, some conference papers, and reports from academic, business and industry bodies)
  • social media listening
  • nationwide survey of WHS inspectors and experts
  • nationwide survey of Australian workers across all industries.

The WHS Radar is intended to reduce the extent to which SafeWork NSW is dependent on lag data, by actively collecting more contemporaneous data from multiple sources. The first WHS Radar report was released publicly in April 2023.

A second piece of work delivered by the CWHS is the WHS Risk Rating tool for a PCBU.6 This tool attributes a rating to many businesses in NSW based on assessment of their future risk of non-compliance with WHS legislation. The WHS Risk Rating is intended to:

  • support existing SafeWork NSW Triage decision-making
  • support IDMP decision-making
  • select high-risk profiles during blitz operations
  • proactively screen and target high-risk profiles.

While some managers in SafeWork NSW did use the WHS Risk Rating tool, others were less confident in its value, expressing doubts about the accuracy and completeness of the data, or were not aware of it at all. These inconsistent views between different managers and directors, between those who use the WHS Risk Rating tool and those who do not use it or do not even have awareness about it, suggests that its purpose and functionalities have not been fully communicated to the wider inspectorate.

The governance of the CWHS, and particularly its relationship to SafeWork NSW, is somewhat unclear. While the Centre sits under the Executive Director, Regulatory Engagement, it identifies on its website as ‘A division of the Department of Customer Service’. Structurally, it is equivalent to a directorate under the Regulatory Engagement business area of SafeWork NSW, rather than a division of the department.

SafeWork NSW's inspectors are its core asset, and its ability to recruit, train and retain inspectors is key to fully performing its functions and meeting the internationally recognised benchmark

SafeWork NSW is funded to fully operate with up to 370 inspectors, though with 352 inspectors at August 2023 it has not recruited to full capacity.

Staff retention within the inspectorate has been a historic strength of the regulator. However, there has been a recent increase in inspector turnover. SafeWork NSW notes that from 2020 to 2022 attrition rates doubled from 5.3% to 10.6% within the inspectorate, which – due to the average age of its workers – was anticipated. Nearly one-third of inspectors were 56 years or older in the 2021–22 financial year. SafeWork NSW also experienced a general increase in resignations since the COVID-19 pandemic.

Increased recruitment activity is intended to mitigate the impact of ongoing attrition due to retirement. However, given the training requirements for new inspectors, there is a significant lag time between recruitment and the utility of inspectors in the field to progress regulatory priorities. SafeWork NSW notes however that inspectors receive authorisations to use their powers throughout the 12-month training period, with individuals assessed at a number of stages based on individual competence.

Where there have been capacity limitations, there have been localised responses such as the sharing of inspectors between teams, or the change in resourcing profile of investigations where instead of one inspector working on a case, a case is assigned to a team.

The International Labour Organization sets a benchmark of one labour inspector per 10,000 workers in industrial market economies. This benchmark is considered the number of inspectors deemed sufficient to ensure the effective discharge of the duties of the inspectorate. In October 2022, SafeWork NSW reported at the Parliamentary Budget Estimates Committee hearings that recruiting the full contingent of 370 inspectors would have meant that there was one SafeWork NSW inspector for every 10,000 workers, allowing it to meet this benchmark.

SafeWork NSW provided advice to the audit team that forecast increases in the number of workers and workplaces in New South Wales will result in 471 inspectors being required to meet the International Labour Organization benchmark by 2027.

SafeWork NSW inspectors can take up to two years to be considered ready to be fully utilised, due to training requirements and variations in their experience

Once recruitment is completed and new inspectors commence employment, they will start the New Inspector Training Program (NITP). The NITP is a 12-month comprehensive training program which prepares new Inspectors to perform the duties required of an Inspector within SafeWork NSW as well as providing training and assessment required for the PSP50116 Diploma of Government (Workplace Inspection) qualification. Inspectors will be fully trained after 12 months.

They will be issued with their instrument of appointment (authorities) to use their powers throughout the 12 month course. However it was noted throughout interviews with the inspectorate that it can take up to two years for new inspectors to be deployed in the field on their own and confidently making decisions. SafeWork NSW notes that the level of mentoring and support provided to individual inspectors, and access to a variety of experiences to build a range of skills contributes to variations in new inspectors building their confidence.

SafeWork NSW also provides:

  • a structured framework for new inspector onboarding and capacity-building, including in May 2023 formalising requirements for accompanied field visits, and delivering the NITP, delivered by the SafeWork NSW Registered Training Organisation (RTO) and utilising experienced inspectors from across the directorate to deliver training across the 12-month period
  • a SafeWork NSW Inspectorate and Manager Continuing Professional Development Program Policy
  • formal processes for Inspectorate Continuing Professional Development and Manager Continuing Professional Development, including recognition of prior learning through credit transfer from other registered training organisations
  • a formalised procedure for inspectors to progress to senior inspector and principal inspector.

While it was beyond the scope of this audit to assess the effectiveness of this training and capability development framework, it was recognised by interviewees that the commitment of time and resources provided by SafeWork NSW to training inspectors was significant. This underscores the importance of ensuring the effective use of inspectors.

There are inconsistent expectations around the responsibilities of SafeWork NSW inspectors and managers for identifying new and emerging issues

Inspectors may apply to the Inspector Progression Panel of SafeWork NSW to progress from Inspector to the level of Senior Inspector, or Senior Inspector to the level of Principal Inspector. In addition to the overarching requirements of the (Department of Customer Service – SafeWork NSW Inspectors 2007) Reviewed Award, this process is governed by a formal written procedure.

This procedure sets out that in considering applications for progression, the panel should take into account whether the applicant has fulfilled the responsibilities of their current role. The procedure specifies that inspectors and principal inspectors are accountable to:

Identify trends and emerging issues and provide advice to inform decision making.’ 

It is unclear why inspectors and principal inspectors have this responsibility, but not the intermediate level of senior inspectors. It is also unclear whether people managers, such as team managers, directors, and executive directors, also have similar formal obligations to proactively identify emerging issues.

Moreover, as senior inspectors are not accountable for identifying trends and emerging issues, inspectors are not assessed against this accountability when seeking progression to the senior inspector level. In contrast, when seeking progression from senior inspector to principal inspector, the applicant is required to provide evidence of how they meet this accountability, even though it is not an accountability specified for senior inspectors.

The accuracy of SafeWork NSW’s workforce planning is uncertain

Workload capacity is managed at the directorate level, with a forecasting report on the capacity across all teams discussed quarterly at the SafeWork NSW Leadership Group. Inspectors do not fill out timesheets, instead, this is based on time estimates for specific activities undertaken by inspectors. Directorates are also responsible for leading or supporting work against specific regulatory priorities, requiring directorates to discuss workforce capacity as part of planning proactive work.

SafeWork NSW has a 'workload management treatment model' that provides operation guidance once certain thresholds are reached within this forecasting report. These mechanisms include the reallocation of resources within the directorate at 125% of capacity reached, sharing and reallocation of work between equivalent portfolios at 150% of capacity reached, and cross directorate sharing of work and resources as well as the cessation or deference of work at 175% of capacity reached.

The actual allocation of inspectors to individual directorates is determined at the executive level when vacancies arise, with SafeWork NSW noting that 'consideration is given to the demand for regulatory services (current and expected future) across all teams to determine which directorate and office location a replacement position should be allocated'.

Audit interviews identified some concern that the calculations the forecasting reports are based on were not accurate, overestimated time, and that the data was used inconsistently and as a method to 'grab for resources'. While this audit did not examine SafeWork NSW's forecasting methodology in detail, a sample of the workforce forecasting report for April to June 2023 showed average capacity ranging from 9% to 390%, which may indicate under-utilised or over-utilised teams, or under or overweighted activities.

While there are mechanisms in place to review operational capacity, longer-term strategic workforce planning does not seem to form part of these review processes.

As part of developing its regulatory priorities, SafeWork NSW released a discussion paper that noted broader trends affecting workplaces and communities that it regulates, for example the rise in mental health issues in the workplace, automation, and the return of regional on-shore manufacturing. SafeWork NSW has a SafeWork Inspectorate and Manager Continuing Professional Development Program Policy, however this policy was only finalised in July 2023.


3 This study, conducted by a third-party, stemmed from a recommendation made by the NSW Parliament’s 2019 Dust Disease Review to amend the WHS Act to require SafeWork NSW to ensure that a case finding study was carried out:

  • to investigate respirable crystalline silica exposure in the manufactured stone industry, and

  • to gather information to improve the identification and assessment of workers at risk of exposure.

The purpose of this recommendation was to ‘to improve the identification and assessment of workers at risk of exposure.

4 The authors of this case finding study identified significant data limitations, which meant that it was not possible to estimate with confidence the complete number of workers potentially affected by silicosis.

5 Because of the lag period between when a worker is exposed to risky work practices and when they may develop silicosis, complaint data is not necessarily a useful tool to identify the emerging risk, especially where awareness of the risk is low. Unlike with risks that pose a more immediate and direct harm – such as falling off an insecure elevated platform - individuals may be less conscious to complain about a risk where the potential injury is not immediately visible.

6 A person conducting a business or undertaking has the primary duty of care for work health and safety.

 

This chapter considers how effectively SafeWork NSW measures and reports its performance in monitoring and enforcing compliance with the WHS Act. This includes whether it has meaningful performance measures, whether its performance is transparent to all stakeholders, and whether it uses performance information to support continuous improvement and quality assurance.

Performance measurement and reporting are essential to demonstrating a regulator's effectiveness

The Audit Office’s 2022 Audit Insights 2018–22 report noted that:

Defining measurable outcomes, tracking and reporting performance are core to delivering system stewardship, and to ensure effective and economical use of public funds.’ 

The same report also observed that government activity should:

…be supported by performance frameworks that provide structure for agencies to set performance targets, assess performance gaps, measure outcomes achieved, and benefits realised, capture lessons learned, and implement continuous improvement. 

Relatedly, the Organisation for Economic Co-Operation and Development has said that it is important for regulators to be aware of the impacts of their regulatory actions and decisions, and that this:

…helps drive improvements and enhance systems and processes internally. It also demonstrates the effectiveness of the regulator to whom it is accountable and helps to build confidence in the regulatory system. 

SafeWork NSW reports its activities and performance against certain KPIs, along with equivalent regulators in other Australian jurisdictions

Safe Work Australia, the national policy body for work health and safety, collects, analyses and publishes data across jurisdictions. SafeWork NSW provides data on regulatory activities such as the volume of proactive and reactive regulatory work, and performance measures such as injuries and fatalities. This is contained in the Safe Work Australia Comparative Performance Monitoring – Work Health and Safety Performance, and Work Health and Safety Compliance and Enforcement Activities reports.

The data published by Safe Work Australia provides comparative and longitudinal performance data relating to workplace injuries, fatalities, and compliance activities. This is ‘lag’ data, often 12 months or more in arrears. SafeWork NSW notes that due to the currency of data, it is not useful for planning purposes.

The ability to directly compare jurisdictional activities to form a view on the effectiveness of each regulator is limited, due to differences in how each work health and safety regulator works and the scope of their powers and responsibilities. For example, unlike in other states and territories, SafeWork NSW is not responsible for claims management or return to work matters.

Data reported by SafeWork NSW to Safe Work Australia indicates that, while fatalities have decreased, SafeWork NSW may not have had meaningful impact on the rates of serious injuries and disease claims since 2016–17

The data provided to Safe Work Australia shows that SafeWork NSW has presided over a period where there has been an increase in the incident rate of serious injury and disease claims in New South Wales. While SafeWork NSW is not responsible for workers compensation, the payment of workers compensation necessitates that a workplace injury has occurred.

The audit team has not seen evidence that SafeWork NSW has interrogated the root cause data trends since 2016–17 (discussed below). While the causes of workplace injury are often complex and multifaceted, the data suggests that SafeWork NSW may not be having a meaningful impact on reducing rates of serious injuries, but the poor data quality means that we cannot be sure. It was beyond the scope of this audit to specifically examine serious injuries and disease claims, or the root cause(s) for the upward trend.

An extract of one performance indicator is shown in Exhibit 2 below. It shows serious injury and disease claim data from 2012–13 through to 2020–21 (where 2020–21p stands for preliminary data). The 2015–16 financial year is highlighted to indicate the establishment phase of SafeWork NSW.

 

This chapter considers selected policies and procedures that SafeWork NSW has implemented to ensure that it performs its compliance functions in a manner that is consistent with regulatory good practice. This includes that regulatory decisions are fair, consistent, predictable, transparent and in accordance with any laws or government policy. This extends to how complaints and incidents are initially triaged, the decisions inspectors make in response to complaints or incidents, and decisions made about whether a matter is referred to investigation for possible prosecution.

SafeWork NSW has made significant efforts to promote consistency in regulatory decision-making

A core element of an effective compliance regime is that the regulator’s behaviour and decision-making should be consistent and predictable. This encourages trust and confidence in the regulator, while promoting clarity and certainty among regulated entities.

SafeWork NSW faces particular challenges to achieving consistency in regulatory outcomes without fettering the legislative decision-making authority of individual inspectors. The audit was made aware of cases where stakeholders could not understand the rationale by which decisions were made, including in matters raised in Parliamentary Budget Estimates Committee hearings.

The reasons for the lack of consistency, whether perceived or actual, includes such matters as:

  • the unique circumstances that may apply to individual risks, hazards, or incidents
  • the wide variation in characteristics of PCBUs, including in regard to matters that might affect their culpability for non-compliance, such as their size or compliance history
  • varying levels of experience across inspectors
  • potential differences between individual inspectors in risk appetite, regulatory posture and attitudes to varying regulatory interventions.

These complexities have received heightened attention by SafeWork NSW since the 2020 findings of the NSW Ombudsman’s inquiry into SafeWork NSW and the Blue Mountains City Council. Among other things, in this inquiry the Ombudsman found that:

  • only inspectors had the authority to form a ‘reasonable belief’ that non-compliance with the WHS Act or regulation had occurred
  • where an inspector forms a ‘reasonable belief’ of non-compliance, then they must issue a regulatory notice
  • instances had occurred where inspectors had issued notices without forming the necessary ‘reasonable belief’ that valid grounds existed for those notices
  • inspectors had issued notices without forming their own requisite ‘reasonable belief’ because they had been directed to issue notices by management.

Notwithstanding these challenges, SafeWork NSW was able to demonstrate that it has implemented measures aimed at promoting consistency in regulatory decision-making. These measures include:

  • extensive guidance in exercising discretionary decision-making
  • inspector practice notes
  • directorate and team level discussions intended to promote consistency in decision-making.

These measures are primarily focused at encouraging consistency in the application of the law prospectively. There was less evidence that decisions were consistently, formally, and robustly reviewed retrospectively, such as by:

  • peer review
  • internal audit or quality assurance of decisions
  • managerial coaching and mentoring.

The audit found varying practices and processes across SafeWork NSW teams and directorates for these sorts of retrospective and reflexive learning processes. Some managers and directors were able to describe regular review activities, either through one-on-one case reviews with individual inspectors, or through team meetings, though the evidence was that these activities were not consistent across regulatory decision-making areas of SafeWork NSW.

Such retrospective mechanisms would not be aimed at varying decisions already made, but at contributing to standardising how inspectors make future decisions by promoting consistency through setting precedents for responding to substantively similar matters.

Staff performance management is inconsistent across SafeWork NSW, which may hinder consistent practices, behaviours and outcomes

The use of organisational performance management and planning systems can be an important tool for promoting consistent behaviours, understandings and outcomes.
This audit included a survey of all members of the inspectorate, excluding team managers. Approximately 60% the inspectorate responded to the survey. The survey of found that:

  • 36% said that they did not have an annual performance agreement – almost one in every two inspectors (46%) in the two metropolitan focused directorates said they did not have performance agreements that set out what was required of them
  • the Investigation and Emergency Response directorate had a comparatively higher rate of reported performance agreements in place (80%) than all the other directorates that comprised SafeWork NSW (57%) – the reasons for this were not examined by the survey.

Findings from a survey of the inspectorate highlight the role of discretion in decision-making, and how these factors can be inconsistently applied

The survey conducted by the audit also asked inspectors about how different factors might affect their decision to issue a penalty notice for a breach of the WHS Act (excluding the most serious categories of matters that would ordinarily be immediately referred to full investigation and possible prosecution).

The discretionary factors that were included in the survey included:

  • a sample taken from SafeWork NSW's written procedure for issuing penalty notices (shown in Exhibit 5 below)
  • a small number that had been raised with the audit team by SafeWork NSW staff during interviews, namely: current regulatory priorities, media or political interest, and the size of the PCBU (specifically, whether or not a hypothetical PCBU was a small, family-owned business).
Exhibit 5: Discretionary factors when issuing a penalty notice

Factors that are considered relevant to the exercise of discretion to issue a penalty notice are:

  1. The seriousness of the risk and the actual or potential consequences or harm.
  2. The extent of any injury or illness (penalties must not be issued for a fatality or serious injury which may lead to a full investigation or prosecution unless in accordance with this procedure).
  3. The duty holder’s safety and compliance history, e.g., a repeat offender or there is a likelihood of the offence being repeated.
  4. The prevalence of the offence in the jurisdiction and industry impact.
  5. The culpability of the duty holder, that is, how far below acceptable standards the conduct falls and the extent to which the duty holder contributed to the risk.
  6. Whether the duty holder was authorised to undertake certain types of work, e.g., work requiring a licence, registration, permit or other authority (however described) as required by the regulations.
  7. Prior notice of the risk or offence (e.g., direct to the duty holder or through codes of practice, educational material, safety alerts, guidance sheets, campaigns or priority interventions etc).
  8. Whether the circumstances warrant the application of an administrative sanction at a lesser scale than an enforceable undertaking or prosecution (in addition to remedial action in the form of an improvement or prohibition notice).
  9. Any mitigating or aggravating circumstances including efforts undertaken by the duty holder to control risks and the duty holder’s co-operation and willingness to address the issue.

Source: SafeWork NSW, Penalty Notice Procedure.

Inspectors were asked whether a range of selected factors were in general more, less, or not at all likely to influence their decision to issue a penalty notice.

As shown in Exhibit 6 below, the survey found that the most common response to most of the factors was that they made it neither more nor less likely that an inspector would issue a penalty notice in response to non-compliance. In some cases, this is probably to be expected.

For example, whether or not a non-compliant PCBU is a NSW government agency should probably not affect whether it is issued with a penalty notice. This was the case for 80% of respondents (though notably, 20% of inspectors responded that it would affect their decision, including 3% who responded that they would be much more likely to issue a penalty notice).

Other variations seem less intuitive to explain. This is particularly the case when a factor is written in policy or procedures. For example, 44% of inspectors responded that their decision would not be affected by whether or not the PCBU had prior notice of the risk, even though prior notice is prescribed in the SafeWork NSW procedure as a factor that should be taken into account (see item 7 of Exhibit 5).

The role played by SafeWork NSW regulatory priorities is also uncertain. On the one hand, 62% of inspectors said that they would be more (39%) or much more (23%) likely to issue a penalty if the non-compliance related to a regulatory priority, while 38% said it would have no impact.

The survey also found noticeable variations in responses between directorates regarding when penalty notices would be more or less likely to be issued. This included in regard to:

  • whether a non-compliant PCBU was a small business or not
  • the role of PCBU culpability
  • whether non-compliance related to a matter of media or political interest.

This chapter presents a case study that arose during the course of this audit. The case study demonstrates issues discussed in earlier chapters of this report, particularly in relation to the management of risk and the proper application of policies and procedures to ensure SafeWork NSW’s effectiveness as a regulator.

About the case study

The case study concerns the activities of the Department of Customer Service and SafeWork NSW, the latter of which is located within the department. Neither the case study nor this performance audit generally examined the activities of the commercial partner (including any related companies) referenced in the case study, including Trolex Ltd (UK), Trolex Nome Australia Pty Ltd., or Trolex Sensors Pty Ltd. No findings have been made, either express or implied, in relation to the commercial partner.

The case study was based on a review of evidentiary documents, primarily in the form of emails sourced from SafeWork NSW. To avoid compromising other processes, interviews were not held.

SafeWork NSW’s respirable crystalline silica real-time detection project

As discussed earlier, silicosis is a progressive, occupational lung disease resulting from inhalation of respirable crystalline silica. In recent years, there has been high profile attention to respirable crystalline silica exposure from manufactured stone products (such as kitchen benchtops), though these risks had been published in international research since at least 2010. Unlike asbestos, respirable crystalline silica from manufactured stone can lead to the development of silicosis and other lung diseases after relatively short exposure and latency periods, resulting in relatively young workers developing serious diseases.

From 2016 to 2022, SafeWork NSW’s Work Health and Safety Roadmap included a target to reduce workplace exposure to priority hazardous chemicals and materials by 30%. This focus was retained in SafeWork NSW's regulatory priorities for 2023, which included the aim of reducing the incidence of worker exposure to harmful substances such as silica.

In 2018, SafeWork NSW commenced a project to fund a ‘research partner’ to develop a device that would detect in real-time the presence of respirable crystalline silica in workplaces. This project was led by the Centre for Work Health and Safety within SafeWork NSW.

Following a selection process, Trolex, a private company from the United Kingdom, was selected as the research partner. Trolex developed a device intended to meet the objective of the project. This device is called the Air XS and sells for approximately $18,500 AUD. The Air XS device was launched on 7 April 2022. The first-generation of the Air XS devices are no longer on the market, however up to 60 second-generation devices are currently in use across Australia.

In December 2022, this research project won the DCS Secretary’s Award for Excellence in Digital Innovation and was also one of the department’s nominees for a Premier’s Award in 2022.

As part of understanding SafeWork NSW’s response to the work health and safety risks of respirable crystalline silica from manufactured stone products, the audit examined this research project to procure a 'research partner' to develop a respirable crystalline silica real-time detection device. The findings of this examination are set out below.

SafeWork NSW’s processes were ineffective in responding to and mitigating risk and in ensuring compliance

As detailed below, our examination of this project found significant governance failings in SafeWork NSW, including the absence of key documentation, which created risks relating to whether the project would deliver its objective and whether it complied with procurement requirements. Concerns about whether the Air XS device would satisfy project objectives were not properly addressed.

We also found non-compliance with mandatory procurement policies. The failure to ensure compliance with procurement requirements leaves open the risk that value for money was not achieved, or that the procurement was not fair, transparent, consistent with promoting competition, or free from corruption or maladministration.

As a result of the Audit Office raising these issues with the Head of SafeWork NSW, the regulator undertook to enter into discussions with the CSIRO to conduct further testing of the real-time RCS detection device.

Concerns were raised by staff about the accuracy of the Air XS devices, though these concerns were not escalated beyond Director-level staff

Both before and after the launch of the Air XS device, concerns were raised by technical staff within SafeWork NSW about the accuracy of the devices and the rigour with which they had been tested during development.

It should be noted that the manufacturer, in correspondence with SafeWork NSW, defended the accuracy of the Air XS devices. It was beyond the scope of the audit to reconcile apparently conflicting technical assessments. Rather, the audit examined how SafeWork NSW managed the potential project delivery risk when these material concerns were raised.

Toward the end of 2021, concerns first emerged about the accuracy of the Air XS devices in emails between staff in the Regulatory Engagement business area of SafeWork NSW. These emails outlined concerns that the Air XS devices were not sufficiently accurate in detecting respirable crystalline silica. These views were derived from testing performed outside of any technical assurance process. At the time, these concerns were not shared with executive-level staff, including with any relevant Directors.

By the end of March 2022, the Centre for Work Health and Safety had requested and received from Trolex testing reports on the Air XS device. Two technical staff in the Testing Services directorate of SafeWork NSW were asked to review the testing reports. They were given five days to conduct these reviews.

On 5 April 2022, two days before the product was launched, one of the technical staff emailed the Director, Testing Services, advising that each of the two technical staff had independently prepared assessments and that their conclusions were ‘…not what DCS will want to hear’.

The internal assessment reports were subsequently provided to the Director, Testing Services, and to the Centre for Work Health and Safety. One of the reports stated that the product was not ‘market ready’ and that further testing was required. The audit did not find evidence that these conclusions were escalated to the Executive Director, Regulatory Engagement.

On 6 April 2022, the research project manager was advised by a staff member in the Centre for Work Health and Safety that an independent expert’s report (commissioned by the Centre for Work Health and Safety) concluded that ‘…there isn’t enough data to assess the validity of the device’.

Despite these concerns, the product launch occurred on 7 April 2022.

The audit found that concerns were again documented on at least two occasions after the product was launched. First, in September 2022, a senior technical staff member in the Centre for Work Health and Safety expressed concerns to colleagues, including the Director, Testing Services, that the staff member was uncomfortable promoting the Air XS without further testing being conducted.

Secondly, in May 2023, an internal test report prepared within the Testing Services business unit highlighted specific concerns about the accuracy of a first-generation Air XS device. This internal test report was provided to the Director, Testing Services, and was conducted with at least the knowledge of the Director, Research and Evaluation.

In both cases (September 2022 and May 2023), there are gaps in the evidence concerning how widely these internal concerns were shared. The audit found no evidence of:

  • any material response by SafeWork NSW management to address the concerns that had been raised
  • any assessment of risks posed to SafeWork NSW and other stakeholders
  • any escalation of the concerns to the relevant Executive Director or to the Head of SafeWork NSW.

This apparent lack of management action was despite the potential risks to the work health and safety of workers who may have relied on the Air XS, and to the reputation of the regulator.

Some SafeWork NSW staff were hesitant to raise concerns about the Air XS device

Some staff reported to us that they did not raise these risks with their managers due to concerns that to do so might affect their employment. In the Auditor-General’s 2018 audit report Managing risks in the NSW public sector: risk culture and capability, it was noted that:

Effective risk management is essential to good governance, and supports staff at all levels to make informed judgements and decisions. 

The report also observed that it is now widely accepted that organisational culture is a key element of risk management because it influences how people recognise and engage with risk. This includes ensuring that agencies have a culture of open communication so that all employees feel comfortable speaking openly about risks.

In this case, SafeWork NSW lacked the risk processes and culture to encourage all staff to identify, raise, escalate, and respond to risk appropriately. While the department does have a mechanism (via dedicated phone and email contacts) for staff to report integrity concerns, this mechanism was not used.

Concerns about the Air XS device were also raised by an external user of the device, though there is no evidence that these concerns were substantively addressed

On 21 August 2023, a senior manager from an external user emailed staff in SafeWork NSW’s Testing Services Directorate to advise that they had told the local distributor that they no longer wished to conduct further testing, nor purchase any Air XS devices. The senior manager stated that:

…the claim that the Air XS Silica monitor ‘delivers highly accurate, continuous, real-time silica detection’ could not be validated by the distributor despite many requests and efforts in the field to test the monitors and validate the data. 

The senior manager further stated that they were:

…disappointed that SafeWork NSW promotes the monitors with no evidence, known and/or held by them, that the monitors deliver the promoted monitor outcomes. 

The audit found no evidence that these concerns were meaningfully addressed by SafeWork NSW.

The process of procuring a ‘research partner’ to develop the Air XS device was flawed, in that there was non-compliance with procurement obligations and inadequate record keeping

The cost of procuring the Air XS research partner increased from an initial estimated cost of $200,000 when the request for tender was issued in May 2019 to $1.34 million when the final contract was executed in August 2019.

The audit found non-compliance in the process undertaken by the CWHS to procure the research partner. This non-compliance related to the requirements of the applicable departmental procurement manual, as well as with DCS financial delegations, and with the tender evaluation plan prepared for the process.

Examples of non-compliance and other poor practices are outlined below.

  • The Director, Research and Evaluation, was a voting member of the evaluation committee and also signed the acceptance letter for the successful proposal. This contravened the department’s procurement requirement that an approving delegate may not also evaluate tender responses. At the time, the estimated cost of the engagement was $200,000 and was therefore within the Director’s financial delegation.
  • The evaluation of the submitted tenders included an assessment provided by a designated non-voting member of the tender evaluation committee who had a declared conflict of interest.
  • One member of the tender evaluation committee lodged a strong objection to the preferred provider. SafeWork NSW could not provide documentation about how this objection was addressed.
  • When the final cost of the engagement increased to $1.34 million by August 2019, the Director, Research and Evaluation, no longer had the necessary delegation to approve the engagement of Trolex. Under the delegations issued by the DCS Secretary on 29 August 2019, the approval of an Executive Director was required for contracts valued between $500,000 and $2 million.
  • The scoring in the tender evaluation committee’s (unsigned) evaluation report did not comply with the approach set out in the tender evaluation plan. This was material as, had the tender evaluation plan been followed, two tenders would have been assessed as having the same successful score.
  • SafeWork NSW was unable to provide:
    • a signed and dated copy of an approval to issue the initial request for tender
    • a signed and dated copy of an approval for SafeWork NSW to enter into a formal agreement with Trolex
    • a final tender evaluation report signed by all members of the tender evaluation panel
    • evidence of any approval to increase the value of the contract from the $200,000 anticipated in the initial request for tender up to the $1.34 million final value of the contract.

Such non-compliance can contribute to the risk of maladministration in procurement activities, including by undermining probity and challenging whether value for money is achieved.

 

Appendix one – Response from agency

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 #390 - released 27 February 2024

 

Published

Actions for Health 2023

Health 2023

Health
Whole of Government
Asset valuation
Compliance
Financial reporting
Information technology
Internal controls and governance
Project management
Regulation
Risk
Shared services and collaboration
Workforce and capability

What this report is about

Results of the Health portfolio of agencies' financial statement audits for the year ended 30 June 2023.

The audit found

Unmodified audit opinions were issued for all Health portfolio agencies' financial statements. 

The number of monetary misstatements increased in 2022–23, driven by key accounting issues, including the first-time recognition of paid parental leave and plant and equipment fair value adjustments. 

The key audit issues were 

NSW Health identified errors regarding the recognition and calculation of long service leave entitlements for employees with ten or more years of service that had periods of part time service in the first ten years, resulting in prior period restatements. 

Comprehensive revaluation of buildings at the Graythwaite Charitable Trust found errors in the previous year's valuation, resulting in prior period restatements. 

New parental leave legislation increased employee liabilities for portfolio agencies. The Ministry of Health corrected the consolidated financial statements to record parental leave liabilities for all agencies within the Health portfolio.   

A repeat high-risk issue relates to processing time records by administrators that have not been reviewed prior to running the pay cycle.   

Thirty per cent of reported issues were repeat issues. 

The audit recommended 

Portfolio agencies should ensure any changes to employee entitlements are assessed for their potential financial statements impact under the relevant Australian Accounting Standards. 

Portfolio agencies should address deficiencies that resulted in qualified reports on:   

  • the design and operation of shared service controls
  • prudential non-compliance at residential aged care facilities.

 

This report provides Parliament and other users of the Health portfolio of agencies’ financial statements with the results of our audits, analysis, conclusions and recommendations in the following areas:

  • financial reporting
  • audit observations.

Financial reporting is an important element of good governance. Confidence and transparency in public sector decision-making are enhanced when financial reporting is accurate and timely.

This chapter outlines our audit observations related to the financial reporting of agencies in the Health portfolio of agencies (the portfolio) for 2023.

Section highlights

  • Unqualified audit opinions were issued for all portfolio agencies required to prepare general purpose financial statements.
  • The total number of errors (including corrected and uncorrected) in the financial statements increased compared to the prior year.
  • The Ministry of Health retrospectively corrected an $18.9 million adjustment in its financial statements relating to long service leave entitlements for certain employees.
  • Graythwaite Charitable Trust retrospectively corrected a $4.2 million adjustment in its financial statements related to prior period valuations. 

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 observations and insights from our financial statement audits of agencies in the Health portfolio.  

 Section highlights 

  • The 2022–23 audits identified one high-risk and 57 moderate risk issues across the portfolio.
  • The high-risk matter related to the forced-finalisation of time records.
  • The total number of findings increased from 67 to 111 in 2022–23.
  • Thirty per cent of the issues were repeat issues. Most repeat issues related to internal control deficiencies or non-compliance with key legislation and/or central agency policies.
  • Forced-finalisation of time records, accounting for the new paid parental leave provision and user access review deficiencies were the most commonly reported issues.
  • Qualified Assurance Practitioner's reports were issued on:
    • the design and operation of controls as documented by HealthShare NSW
    • the Ministry's Annual Prudential Compliance Statements in relation to residential aged care facilities.

Appendix one – Misstatements in financial statements submitted for audit

Appendix two – Early close procedures

Appendix three – Timeliness of financial reporting

Appendix four – Financial data

 

© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.

 

 

Published

Actions for Regional road safety

Regional road safety

Transport
Health
Community Services
Internal controls and governance
Management and administration
Project management
Risk

What this report is about

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

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

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

What we found

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

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

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

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

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

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

What we recommended

We recommended TfNSW:

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

Disclosure of confidential information

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

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

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

The confidential information has been redacted from this report.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In making this assessment, the audit examined whether TfNSW:

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

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

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

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

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

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

Conclusion

TfNSW has acknowledged that there is a disproportionate amount of road trauma on regional roads in the NSW Road Safety Strategy 2012–2021, the NSW Road Safety Plan 2021, and the NSW Road Safety Action Plan 2022–2026. However, TfNSW has not articulated or evaluated a strategy for implementing road safety policy in regional New South Wales to assist in guiding targeted activities to address regional road trauma. There is also no transparency about the total amount of funding invested in improving road safety outcomes for regional New South Wales.

People living in regional New South Wales make up one-third of the state’s population, but deaths on regional roads make up around two-thirds of the state’s total road toll. This statistic is almost the same in 2023 as it was ten years ago when TfNSW released its first long-term road safety strategy.

More than 70% of people who died on roads between 2012 and 2022 in regional New South Wales were residents of regional areas. Speed is the greatest contributing factor to road fatalities and serious injuries across the entire state. However, it is responsible for more fatalities on regional roads (43%) than in Greater Sydney (34%).

TfNSW’s road safety strategies and plans acknowledge that most road fatalities occur in regional New South Wales but none of its existing strategies or plans show evidence of tailoring measures to suit particular regional settings or ‘hot spots’. There are infrastructure initiatives (such as Saving Lives on Country Roads) and behavioural programs targeting regional areas (such as Driver Reviver). However, these activities are not aligned to a regional-specific strategy or plan that addresses issues specific to regional areas.

TfNSW has state-wide responsibility for managing road safety outcomes. TfNSW advised the audit that a regional plan and regional trauma reduction targets are not needed as the state-wide plan and targets apply equally for all areas of New South Wales, and local road safety factors are best managed by local councils. TfNSW partners with local councils. However, only 52% of councils in regional New South Wales participate in TfNSW’s Local Government Road Safety Program, compared to 84% of councils in metropolitan areas. TfNSW has not undertaken any evaluations to determine whether projects completed under the Local Government Road Safety Program have reduced road trauma at the local level.

Notwithstanding the above points, TfNSW works with local councils (who are road authorities for local roads in their respective areas under the Roads Act 1993) and other key stakeholders such as the NSW Police Force to achieve the NSW Government’s road safety policy objectives.

TfNSW advised that ‘the setting of state-wide road safety targets is consistent with other jurisdictions and international best practice. Importantly, delivery of road safety countermeasures is tailored and applied with a focus on road user groups across all geographic locations to maximise trauma reductions’. There may be legitimate reasons for the existing approach, as articulated by TfNSW. However, the proportion of road fatalities in regional New South Wales roads has not reduced since 2012 – despite a long-term reduction in the overall number of deaths on the state’s roads between 2012–2021. The audit report has recommended that a regionally focused implementation plan could address this issue. TfNSW has accepted this report’s recommendation that such a plan be developed.

Specific road safety initiatives targeted to regional areas have not been implemented or expanded

Text removed pursuant to section 36A of the Government Sector Audit Act 1983 (NSW), in compliance with the issuance of a Premier’s certificate preventing the publication of this information.

TfNSW increased the use of other forms of automated enforcement (such as tripling enforcement hours in mobile speed cameras).
However, the use of automated enforcement has a strong metropolitan focus with most red light and fixed speed cameras being in metropolitan areas. Average speed cameras are the only camera type overwhelmingly located in regional areas but these apply only to heavy vehicles and are positioned on major freight routes. 

There is no consolidated, public reporting of what proportion of total road safety funding is directed to regional New South Wales each year. The main source of funding for road safety in New South Wales, the Community Road Safety Fund, has been underspent since 2019.

Fines from camera-detected speeding, red-light and mobile phone use offences are required to be used solely for road safety purposes through the Community Road Safety Fund (CRSF), as set out in the Transport Administration Amendment (Community Road Safety Fund) Act 2012.

The CRSF has been underspent every year since 2019–20. The underspend has increased from 12% in 2019–20 to 20% in 2022–23 where the full year underspend was forecasted to be $104 million. Of this underspend, $13.5 million was dedicated for regional road infrastructure projects. TfNSW advised the audit that much of the underspend is the result of delays to infrastructure projects due to COVID-19, bushfires, and floods, as well as skills shortages. However, TfNSW has not provided any evidence that it had a plan to mitigate these risks – meaning the level of underspend could continue to grow. TfNSW also advised ‘there is no reason to expect budget management and controls will not return to pre-COVID circumstances’.

In total, TfNSW received $700 million in funding for road safety in 2021–22 (including federal contributions and the Community Road Safety Fund). Of this, $411 million (or ~59%) was directed to regional New South Wales. This is the most recent comprehensive financial data that was provided by TfNSW to the audit team. The 2022–23 NSW Budget allocated $880 million for road safety in 2022–23, with a forecasted total allocation for road safety of $1.6 billion in recurrent expenses and $0.8 billion in capital expenditure over the period 2022–23 to 2025–26.

Appendix one – Response from Transport for NSW

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

Appendix three – About the audit

Appendix four – Performance auditing

 

© 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 #386 - released 30 November 2023

Planned

Actions for Cyber security in local health districts

Cyber security in local health districts

Health

Local Health Districts in New South Wales create, collect and maintain patient data, including sensitive personal information. Cyber security incidents can harm service delivery and may include the theft of information, denial of access to critical technology, or even the hijacking of systems for profit or malicious intent.

This audit may examine the effectiveness of Local Health Districts in safeguarding patient data and ensuring data security, including how well LHDs ensure they have effective cyber security measures in place.

Planned

Actions for Northern Beaches Hospital

Northern Beaches Hospital

Health

On 11 December 2014, the State entered into a public-private partnership (PPP) to deliver the Northern Beaches Hospital. Under the terms of the PPP, the private sector designed, built, operates and maintains the new hospital which provides free public patient services as well as a range of services for private patients. The Northern Beaches Hospital is a part of the Northern Sydney Local Health District and the private sector partner remains responsible for providing publicly-funded health services until October 2038.

Using follow the dollar provisions, this audit may examine whether the Northern Beaches Hospital is delivering publicly-funded health services transparently, efficiently and effectively.

Published

Actions for Management of the Critical Communications Enhancement Program

Management of the Critical Communications Enhancement Program

Finance
Health
Justice
Whole of Government
Cyber security
Information technology
Infrastructure
Internal controls and governance
Project management
Risk
Service delivery
Shared services and collaboration

What the report is about

Effective radio communications are crucial to NSW's emergency services organisations.

The Critical Communications Enhancement Program (CCEP) aims to deliver an enhanced public safety radio network to serve the five emergency services organisations (ESOs), as well as a range of other users.

This report assesses whether the NSW Telco Authority is effectively managing the CCEP.

What we found

Where it has already been delivered (about 50% of the state), the enhanced network meets most of the requirements of ESOs.

The CCEP will provide additional infrastructure for public safety radio coverage in existing buildings agreed to with ESOs. However, radio coverage inside buildings constructed after the CCEP concludes will be at risk because building and fire regulations do not address the need for in-building public safety radio coverage.

Around 98% of radios connected to the network can be authenticated to protect against cloning, though only 42% are.

The NSW Telco Authority has not settled with ESOs on how call encryption will be used across the network. This creates the risk that radio interoperability between ESOs will not be maximised.

When completed, the public safety radio network will be the only mission critical radio network for ESOs. It is unclear whether governance for the ongoing running of the network will allow ESOs to participate in future network operational decisions.

The current estimated capital cost for the NSW Telco Authority to complete the CCEP is $1.293 billion. This is up from an estimated cost of $400 million in 2016. The estimated capital cost was not publicly disclosed until $1.325 billion was shown in the 2021–22 NSW Budget Papers.

We estimate that the full cost to government, including costs to the ESOs, of implementing the enhanced network is likely to exceed $2 billion.

We made recommendations about

  • The governance of the enhanced Public Safety Network (PSN) to support agency relationships.
  • The need to finalise a Traffic Mitigation Plan for when the network is congested.
  • The need to provide advice to the NSW Government about the regulatory gap for ensuring adequate network reach in future buildings.
  • The need to clarify how encryption and interoperability will work on the enhanced network.
  • The need for the NSW Telco Authority to comply with its policy on Infrastructure Capacity Reservation.
  • Expediting measures to protect against the risk of cloning by unauthenticated radios.

Public safety radio networks are critical for operational communications among Emergency Services Organisations (ESOs), which in New South Wales include:

  • NSW Ambulance
  • Fire and Rescue NSW
  • NSW Police Force
  • NSW Rural Fire Service
  • NSW State Emergency Service.1

Since 1993, these five ESOs have had access to a NSW Government owned and operated radio communications network, the Public Safety Network (PSN), to support their operational communications. Around 60 to 70 other entities also have access to this network, including other NSW government entities, Commonwealth government entities, local councils, community organisations, and utility companies.

Pursuant to the Government Telecommunications Act 2018 ('the Act'), the New South Wales Government Telecommunications Authority ('NSW Telco Authority') is responsible for the establishment, control, management, maintenance and operation of the PSN.2

Separate to the PSN, all ESOs and other government entities have historically maintained their own radio communication capabilities and networks. Accordingly, the PSN has been a supplementary source of operational radio communications for these entities.

These other radio networks maintained by ESOs and other entities are of varying size and capability, with many ageing and nearing their end-of-life. There was generally little or no interoperability between networks, infrastructure was often co-located and duplicative, and there were large gaps in geographic coverage.

In 2016, the NSW Telco Authority received dedicated NSW Government funding to commence the Critical Communications Enhancement Program (CCEP).

According to NSW Telco Authority's 2021–22 annual report, the CCEP is a transformation program for operational communications for NSW government agencies. The CCEP '…aims to deliver greater access to public safety standard radio communications for the State’s first responders and essential service agencies'. The objective of CCEP is to consolidate the large number of separate radio networks that are owned and operated by various NSW government entities and to enhance the state’s existing shared PSN. The program also aims to deliver increased PSN coverage throughout New South Wales.

The former NSW Government intended that as the enhanced PSN was progressively rolled-out across NSW, ESOs would migrate their radio communications to the enhanced network, before closing and decommissioning their own networks.

About this Audit

This audit assessed whether the CCEP is being effectively managed by the NSW Telco Authority to deliver an enhanced PSN that meets ESOs' requirements for operational communications.

We addressed the audit objective by answering the following two questions:

  1. Have agreed ESO user requirements for the enhanced PSN been met under day-to-day and emergency operational conditions?
  2. Has there been adequate transparency to the NSW Government and other stakeholders regarding whole-of-government costs related to the CCEP?

In answering the first question, we also considered how the agreed user requirements were determined. This included whether they were supported by evidence, whether they were sufficient to meet the intent of the CCEP (including in considering any role for new or alternative technologies), and whether they met any relevant technical standards and compliance obligations (including for cyber security resilience).

While other NSW government agencies and entities use the PSN, we focused on the experience of the five primary ESOs because these will be the largest users of the enhanced PSN.

Both the cost and time required to complete the CCEP roll-out have increased since 2016. While it was originally intended to be completed in 2020, this is now forecast to be 2027. Infrastructure NSW has previously assessed the reasons for the increases in time and cost. A summary of the findings made by Infrastructure NSW is presented in Chapter 1 of this report. Accordingly, as these matters had already been assessed, we did not re-examine them in this performance audit.

The auditee for this performance audit is the NSW Telco Authority, which is a statutory authority within the Department of Customer Service portfolio.

In addition to being responsible for the operation of the PSN, section 5 of the Act also prescribes that the NSW Telco Authority is:

  • to identify, develop and deliver upgrades and enhancements to the government telecommunications network to improve operational communications for government sector agencies
  • to develop policies, standards and guidelines for operational communications using telecommunications networks.

The NSW Telco Authority Advisory Board is established under section 10 of the Act. The role of the board is to advise the NSW Telco Authority and the minister on any matter relating to the telecommunications requirements of government sector agencies and on any other matter relating to the functions of the Authority. As of 2 June 2023, the responsible minister is the Minister for Customer Service and Digital Government.

The five identified ESOs are critical stakeholders of the CCEP and therefore they were consulted during this audit. However, the ESOs were not auditees for this performance audit.

Conclusion

In areas of New South Wales where the enhanced Public Safety Network has been implemented under the Critical Communications Enhancement Program, the NSW Telco Authority has delivered a radio network that meets most of the agreed requirements of Emergency Services Organisations for routine and emergency operations.
In April 2023, the enhanced Public Safety Network (PSN) was approximately 50% completed. In areas where it is used by Emergency Services Organisations (ESOs), the PSN generally meets agreed user requirements. This is demonstrated through extensive performance monitoring and reporting, which shows that agreed performance standards are generally achieved. Reviews by the NSW Government and the NSW Telco Authority found that the PSN performed effectively during major flood events in 2021 and 2022.

Where it is completed, PSN coverage is generally equal to or better than each ESO's individual pre-existing coverage. The NSW Telco Authority has a dedicated work program to address localised coverage gaps (or 'blackspots') in those areas where coverage has otherwise been substantively delivered. Available call capacity on the network far exceeds demand in everyday use. Any operational issues that may occur with the PSN are transparent to ESOs in real time.

The NSW Telco Authority consulted extensively with ESOs on requirements for the enhanced PSN, with relatively few ESO requirements not being included in the specifications for the enhanced PSN. Lessons from previous events, including the 2019–20 summer bushfires, have informed the design and implementation of the enhanced PSN (such as the need to ensure adequate backup power supply to inaccessible sites). The network is based on the Project 25 technical standards for mission-critical radio communications, which is widely-accepted in the public safety radio community throughout Australia and internationally.

There is no mechanism to ensure adequate radio coverage within new building infrastructure after the CCEP concludes, but the NSW Telco Authority and ESOs have agreed an approach to prioritise existing in-building sites for coverage for the duration of the CCEP.
The extent to which the PSN works within buildings and other built structures (such as railway tunnels) is of crucial importance to ESOs, especially the NSW Police Force, NSW Ambulance, and Fire and Rescue NSW. This is because a large proportion of their operational communications occurs within buildings.

There is no mechanism to ensure the adequacy of future in-building coverage for the PSN in new or refurbished buildings after the CCEP concludes. Planning, building, and fire regulations are silent on this issue. We note there are examples in the United States of how in-building coverage for public safety radio networks can be incorporated into building or fire safety codes.

In regard to existing buildings, it is not possible to know whether a building requires its own in-building PSN infrastructure until nearby outside radio sites, including towers and antennae, have been commissioned into the network. Only then can it be determined whether their radio transmissions are capable of penetrating inside nearby buildings. Accordingly, much of this work for in-building coverage cannot be done until outside radio sites are finished and operating.

In March 2023, the NSW Telco Authority and ESOs agreed on a list of 906 mandatory and 7,086

non-mandatory sites for in-building PSN coverage. Most of these sites will likely be able to receive radio coverage via external antennae and towers, however this cannot be confirmed until those nearby external PSN sites are completed. The parties also agreed on an approach to prioritising those sites where coverage is needed but not provided by antennae and towers. Available funding will likely only extend to ensuring coverage in sites deemed mandatory, which is nonetheless expected to meet the overall benchmark of achieving 'same or better' coverage than what ESOs had previously.

There is a risk that radio interoperability between ESOs will not be maximised because the NSW Telco Authority has not settled with ESOs how encryption will be used across the enhanced PSN.
End-to-end encryption of radio transmissions is a security feature that prevents radio transmissions being intercepted or listened to by people who are not meant to. The ability of the PSN to provide end-to-end encryption of operational communications is of critical importance to the two largest prospective users of the PSN: the NSW Police Force and NSW Ambulance. Given that encryption excludes other parties that do not have the requisite encryption keys, its use creates an obstacle to achieving a key intended benefit of the CCEP, that is a more interoperable PSN, where first responders are better able to communicate with other ESOs.

Further planning and collaboration between PSN participants are necessary to consider how these dual benefits can be achieved, including in what operational circumstances encrypted interoperability is necessary or appropriate.

The capital cost to the NSW Telco Authority of the CCEP, originally estimated at $400 million in 2016, was not made public until the 2021–22 NSW Budget disclosed an estimate of $1.325 billon.
The estimated capital cost to complete all stages of the CCEP increased over time. This increasing cost was progressively disclosed to the NSW Government through Cabinet processes between 2015–16 and 2021–22.

In 2016, the full capital cost to the NSW Telco Authority of completing the CCEP was estimated to be $400 million. This estimated cost was not publicly disclosed, nor were subsequent increases, until the cost of $1.325 billion was publicly disclosed in the 2021–22 NSW Budget (revised down in the 2022–23 NSW Budget to $1.293 billion).

There has been no transparency about the whole-of-government cost of implementing the enhanced PSN through the CCEP.
In addition to the capital costs incurred directly by the NSW Telco Authority for the CCEP, ESOs have incurred costs to maintain their own networks due to the delay in implementing the CCEP. The ESOs will continue to incur these costs until they are able to fully migrate to the enhanced PSN, which is expected to be in 2027. These costs have not been tracked or reported as part of transparently accounting for the whole-of-government cost of the enhanced PSN. This is despite Infrastructure NSW in 2019 recommending to the NSW Telco Authority that it conduct a stocktake of such costs so that a whole-of-government cost impact is available to the NSW Government.

1 The definition of 'emergency services organisation' is set out in the State Emergency and Rescue Management Act 1989 (NSW). In addition to the five ESOs discussed in this report, the definition also includes: Surf Life Saving New South Wales; New South Wales Volunteer Rescue Association Inc; Volunteer Marine Rescue NSW; an agency that manages or controls an accredited rescue unit; and a non-government agency that is prescribed by the regulations for the purposes of this definition.
2 Section 15(1) of the Government Telecommunications Act 2018 (NSW).

The NSW Telco Authority established and tracked its own costs for the CCEP

Over the course of the program from 2016, the NSW Telco Authority prepared a series of business cases and program reviews that estimated its cost of implementing the program in full, including those shown in Exhibit 6 below.

Exhibit 6: Estimated costs to fully implement the CCEP
Source Capital cost ($ million) Operating cost
($ million)
Completion date
March 2016 business case 400 37.3 2020
November 2017 internal review 476.7 41.7 2022
March 2020 business case 950–1,050 -- 2025
October 2020 business case 1,263.1 56.1 2026

Source: CCEP business cases as identified.

In response to the 2016 CCEP business case, the then NSW Government approved the NSW Telco Authority implementing the CCEP in full, with funding provided in stages. The NSW Telco Authority tracked its costs against approved funding, with monthly reports provided to the multi-agency Program Steering Committee

Throughout the program, the NSW Government was informed of increasing costs being incurred by the NSW Telco Authority for the CCEP

The various business cases, program updates, and program reviews prepared by the NSW Telco Authority were provided to the NSW Government through the required Cabinet process when seeking approval for the program proceeding and requests for both capital and operational funding. These provided clear indication of the changing overall cost of the CCEP to the NSW Telco Authority, as well as the delays that were being experienced.

There was no transparency to the Parliament and community about changes in the capital cost of the CCEP until the 2021–22 NSW Budget

As the business cases for the CCEP were not publicly available, the only sources of information about capital cost were NSW Budget papers and media releases. The information provided in the annual Budget papers prior to the 2021–22 NSW Budget provided no visibility of the estimated full capital cost to complete all stages of the CCEP. As shown in Exhibit 7 below, this information was fragmented and complex.

Media releases about the progress of the CCEP did not provide the estimated total cost to the NSW Telco Authority of $1.325 billion to complete all stages of the CCEP until June 2021. Prior to this date, media releases only provided funding for the initial stages of the program or for the stages subject to a funding announcement.

Even during the September 2019 and March 2020 Parliamentary Estimate Committee hearings where the costings and delays to the CCEP were raised, the estimated full cost of the CCEP was not revealed.

Exhibit 7: CCEP funding in NSW Budget papers from 2015–16 to 2022–23
Financial year Type of major work Description of expenditure Forecast estimate to complete ($ million) Estimated duration
2015–16 New work Infrastructure Rationalisation Program: Planning and Pilot 18.3 2015–16
2016–17 Work in progress CCEP Planning and Pilot 18.3 2015–17
New work CCEP 45 2016–17
2017–18 New work CCEP 190.75 2017–21
2018–19 Work in progress CCEP North Coast and State-wide Detailed Design 190.75 2017–21
New work CCEP Greater Metropolitan Area 236 2018–22
2019–20 Work in progress CCEP 426.9 2018–22
2020–21 Work in progress CCEP 664.8 2018–22
2021–22 Work in progress CCEP 1,325 2018–26
2022–23 Work in progress CCEP 1,292.8 2018–26

Source: NSW Treasury, Annual State Budget Papers.

The original business case for the CCEP included estimated ESO costs, though these costs were not tracked throughout the program

Estimates for ESO costs for operating and maintaining their own radio networks over the four years from 2016–17 were included in the original March 2016 business case. They included $75.2 million for capital expenditure and $95 million for one-off operating costs. These costs, as well as costs incurred by ESOs due to the delay in the program, were not subsequently tracked by the NSW Telco Authority.

In January 2017, Infrastructure NSW reviewed the CCEP business case of March 2016. In this review, Infrastructure NSW recommended that the NSW Telco Authority identify combined and apportioned costs and cashflow for all ESOs over the CCEP funding period reflecting all associated costs to deliver the CCEP. These to include additional incidental capital costs accruing to ESOs, transition and migration to the new network and the cost (capital and operational) of maintaining existing networks. This recommendation was implemented in the November 2017 program review, with ESO capital costs estimated as $183 million.

In 2019, Infrastructure NSW conducted a Deep Dive Review on the progress of the CCEP. In this review, Infrastructure NSW made what it described as a 'critical recommendation' that the NSW Telco Authority:

…coordinate a stocktake of the costs of operational bridging solutions implemented by PSAs [ESOs] as a result of the 18-month delay, so that a whole-of-government cost impact is available to the NSW Government.  

It should be noted that the delay to CCEP completion now is seven years and that further ‘operational bridging solutions’ have been needed by the ESOs.

'Stay Safe and Keep Operational' costs incurred by ESOs will be significantly higher than originally estimated

Stay Safe and Keep Operational (SSKO) funding was established to provide funding to ESOs to maintain their legacy networks while the CCEP was refreshing and enhancing the PSN. This recognised that much of the network infrastructure relied on by ESOs had reached – or was reaching – obsolescence and would either require extensive maintenance or replacement before the PSN was available for ESOs to migrate to it. ESOs may apply to NSW Treasury for SSKO funding, with their specific proposals being reviewed (and endorsed, where appropriate) by the NSW Telco Authority. Accordingly, SSKO expenditure does not fall within the CCEP budget allocation.

As shown in the table below, extracted from the March 2016 CCEP business case, the total expected cost for SSKO purposes over the course of the CCEP was originally $40 million, assuming the enhanced PSN would be fully available by 2020.

Exhibit 8: Stay Safe and Keep Operational forecast costs, 2017 to 2020
Year 2017 2018 2019 2020 Total
SSKO forecast ($ million) 12.5 15 10 2.5 40

Source: March 2016 CCEP business case.

In October 2022, the expected completion date for the CCEP was re-baselined to August 2027. Accordingly, ESOs will be required to continue to maintain their radio networks using legacy equipment for seven years longer than the original 2020 forecast. This will likely become progressively more expensive and require additional SSKO funding. For example, NSW Telco Authority endorsed SSKO bids for 2022–23 exceeded $35 million for that year alone.

Compared to the original forecast made in the March 2016 CCEP business case of $40 million, we found ESOs had estimated SSKO spending to 2027 will be $292.5 million.

A refresh of paging network used by ESOs and the decommissioning of redundant sites were both removed from the original 2016 scope of the CCEP

Paging

A paging network is considered an important user requirement by the Fire and Rescue NSW, NSW Rural Fire Service, and NSW State Emergency Service. The 2016 CCEP business case included a paging network refresh within the program scope of works. This was reiterated in the November 2017 internal review of the program. These documents did not estimate a cost for this refresh. The March 2020 and October 2020 business cases excluded paging from the program scope. The audit is unable to identify when, why or by whom the decision was made to remove paging from the program scope, something that was also not well communicated to the affected ESOs.

In 2021, after representations from the affected ESOs, the NSW Telco Authority prepared a separate business case for a refresh of the paging network at an estimated capital cost of $60.31 million. This program was subsequently approved by the NSW Government and included in the 2022–23 NSW Budget.

In determining an estimated full whole-of-government cost of delivering the enhanced PSN, we have included the budgeted cost of the paging network refresh on the basis that:

  • it was expressly included in the original approved March 2016 business case
  • the capability is deemed essential to the needs of three ESOs.

Decommissioning costs

The 2016 CCEP business case included cost estimates for decommissioning surplus sites (whether ‘old’ GRN sites or sites belonging to ESOs’ own networks). These estimates were provided for both the NSW Telco Authority ($38 million) and for the ESOs ($55 million). However, while these estimates were described, they were not included as part of the NSW Telco Authority's estimated capital cost ($400 million) or (more relevantly) operating cost ($37.3 million) for the CCEP. This is despite decommissioning being included as one of eight planned activities for the rollout of the program.

In the October 2020 business case, an estimate of $201 million was included for decommissioning agency networks based on a model whereby:

  • funding would be coordinated by the NSW Telco Authority
  • scheduling and reporting through an inter-agency working group and
  • where appropriate, agencies would be appointed as the most appropriate decommissioning party.

This estimated cost is not included in the CCEP budget.

In determining an estimated full whole-of-government cost of the enhanced PSN, we have included the estimated cost of decommissioning on the basis that:

  • decommissioning was included in the 2016 CCEP business case as one of eight 'planned activities for the rollout of the program'
  • effective decommissioning of surplus sites and equipment (including as described in the business case as incorporating asset decommissioning, asset re-use, and site make-good) is an inherent part of the program management for an enhanced PSN
  • costs incurred in decommissioning are entirely a consequence of the CCEP program.

The estimated minimum cost of building an enhanced PSN consistent with the original proposal is over $2 billion

We have derived two estimated minimum whole-of-government costs for delivering an enhanced PSN. These are:

  • $2.04 billion when calculated from NSW Telco Authority data – shown as estimate A in Exhibit 9 below.
  • $2.26 billion when calculated from ESO supplied data – shown as estimate B in Exhibit 9.

Both totals include:

  • budgeted amounts for both CCEP capital expenditure ($1,292.8 million) and operating expenditure ($139 million)
  • the NSW Telco Authority's 2020 estimated cost for decommissioning ($201 million)
  • the NSW Telco Authority's approved funding for paging refresh ($60.3 million).

The two estimated totals primarily vary around the capital expenditure of ESOs (particularly SSKO funding). To determine these costs, we used ESO provided actual SSKO costs to date, as well as their estimates for maintaining their legacy radio networks through to 2027.

The equivalent cost estimates from the NSW Telco Authority were sourced from the November 2017 internal review and the October 2020 business case for CCEP. It should be noted that the amounts for both estimates are not audited, or verified, but do provide an indication of how whole-of-government costs have grown over the course of the program.

The increase in and reasons for the increase in total CCEP costs (capital and one-off operating) incurred or forecast by the NSW Telco Authority (from $437.3 million in 2016 to $1,431.8 million in 2022) have been provided to the NSW Government through various business cases and reviews prepared by the NSW Telco Authority, as well as by reviews conducted by Infrastructure NSW as part of its project assurance responsibilities.

However, the growth in ESO costs and other consequential costs, such as paging and decommissioning, from around $263 million in the 2016 CCEP business case to between $600 million and $800 million, has to a large degree remained invisible and unexplained to the NSW Government and other stakeholders

Exhibit 9: Estimated whole-of-government costs of the enhanced PSN
  Estimated whole-of-government cost, over time
Cost type 20161 20172 20203 2023–Estimate A4 2023–Estimate B5
$ million $ million $ million $ million $ million
CCEP capital expenditure 400a 476.7b 1,263.1c 1,292.8d 1,292.8d
CCEP operating expenditure 37.3a 41.7b 41.5e 139d 139d
CCEP total 437.3 518.4 1,304.6 1,431.8 1,431.8
ESO capital expenditure 75.2a,f 183b,e 75.4e 258.4g 292.5
ESO one-off operating expenditure 93a n.a.l 86.5e 86.5h 273
ESO total 168.2 183 161.9 344.9 565.5
Paging n.a.i n.a.i n.a.j 60.3k 60.3k
Decommissioning 93 n.a.l 201.0 201h 201
Paging and decommissioning total 93 n.a. 201 261.3 261.3
Whole-of-government total 698.5 701.4 1,667.5 2,038 2,258.6

Notes:
  1. Financial year 2016 to Financial year 2020.
  2. Financial year 2016 to Financial year 2021.
  3. Financial year 2016 to Financial year 2025.
  4. Financial year 2016 to Financial year 2026.
  5. Financial year 2022 to Financial year 2025.
  6. Stay Safe and Keep Operational (SSKO) costs plus terminals costs.
  7. November 2017 internal review and October 2020 Business case.
  8. October 2020 Business case.
  9. Included in CCEP capital expenditure at that time.
  10. By 2020, a refresh of the paging network had been removed from the CCEP scope.
  11. A separate business case for a refresh of the paging network was approved by government in 2022.
  12. Figure not included in the source document.
Sources:
  1. March 2016 CCEP business case.
  2. November 2017 Internal Review conducted by the NSW Telco Authority.
  3. October 2020 CCEP business case.
  4. Derived from business cases, with ESO costs drawn from NSW Telco Authority data.
  5. Derived from business cases, with ESO costs based on data provided to the Audit Office of New South Wales by each of the five ESOs.

Appendix one – Response from agency

Appendix two – Trunked public safety radio networks

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 #383 - released 23 June 2023

 

Published

Actions for Coordination of the response to COVID-19 (June to November 2021)

Coordination of the response to COVID-19 (June to November 2021)

Premier and Cabinet
Community Services
Health
Justice
Whole of Government
Internal controls and governance
Risk
Service delivery
Shared services and collaboration

What the report is about

This audit assessed the effectiveness of NSW Government agencies’ coordination of the response to COVID-19, with a focus on the Delta variant outbreak in the Dubbo and Fairfield Local Government Areas (LGA) between June and November 2021. We audited five agencies - the Department of Premier and Cabinet, NSW Health, the NSW Police Force, Resilience NSW and the Department of Customer Service.

The audit also considered relevant planning and preparation activities that occurred prior to June 2021 to examine how emergency management and public health responses learned from previous events.

What we found

Prior to Delta, agencies developed capability to respond to COVID-19 related challenges.

However, lessons learned from prior reviews of emergency management arrangements, and from other jurisdictions, had not been implemented when Delta emerged in June 2021. As a result, agencies were not as fully prepared as they could have been to respond to the additional challenges presented by Delta.

Gaps in emergency management plans affected agencies' ability to support individuals, families and businesses impacted by restrictions to movement and gathering such as stay-at-home orders. In LGAs of concern, modest delays of a few days had a significant impact on people, especially those most vulnerable.

On 23 July 2021, the NSW Government established a cross-government coordinating approach, the Delta Microstrategy, which complemented existing emergency management arrangements, improved coordination between NSW Government agencies and led to more effective local responses.

Where possible, advice provided to government was supported by cross-government consultation, up-to-date evidence and insights. Public Health Orders were updated as the response to Delta intensified or to address unintended consequences of previous orders. The frequency of changes hampered agencies' ability to effectively communicate changes to frontline staff and the community in a rapidly evolving situation.

The NSW Government could provide greater transparency and accountability over decisions to apply Public Health Orders during a pandemic.

What we recommended

The audit made seven recommendations intended to improve transparency, accountability and preparedness for future emergency events.

This audit assessed the effectiveness of NSW Government agencies’ coordination (focused on the Department of Premier and Cabinet, NSW Health, the NSW Police Force, Resilience NSW and the Department of Customer Service) of the COVID-19 response in selected Local Government Areas (Fairfield City Council and Dubbo Regional Council) between June and November 2021.

As noted in this report, Resilience NSW was responsible for the coordination of welfare services as part of the emergency management arrangements. On 16 December 2022, the NSW Government abolished Resilience NSW.

During the audited period, Resilience NSW was tasked with supporting the needs of communities subject to stay-at-home orders or stricter restrictions and it provided secretariat support to the State Emergency Management Committee (SEMC). The SEMC was, and remains, responsible for the coordination and oversight of emergency management policy and preparedness.

Our work for this performance audit was completed on 15 November 2022, when we issued the final report to the five audited agencies. While the audit report does not make specific recommendations to Resilience NSW, it does include five recommendations to the State Emergency Management Committee. On 8 December 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.

The community of New South Wales has experienced significant emergency events during the past three years. COVID-19 first emerged in New South Wales after bushfire and flooding emergencies in 2019–20. The pandemic is now into its third year, and there have been further extreme weather and flooding events during 2021 and 2022.

Lessons taken from the experience of these events are important to informing future responses and reducing future risks to the community from emergencies.

This audit focuses on the NSW Government's response to the COVID-19 pandemic, and in particular, the Delta variant (Delta) that occurred between June and November 2021. The response to the Delta represents six months of heightened challenges for the NSW Government.

Government responses to emergencies are guided by legislation. The State Emergency and Rescue Management Act 1989 (SERM Act) establishes emergency management arrangements in New South Wales and covers:

  • coordination at state, regional and local levels through emergency management committees
  • emergency management plans, supporting plans and functional areas including the State Emergency Management Plan (EMPLAN)
  • operations centres and controllers at state, regional and local levels.

This audit focuses on the activities of five agencies during the audit period:

  • The NSW Police Force led the emergency management response and was responsible for coordinating agencies across government in providing the tactical and operational elements that supported and enhanced the health response to the pandemic. The NSW Police Force also led the compliance response which enforced Public Health Orders and included household checks on those required to isolate at home after testing positive to COVID-19. In some parts of NSW, they were supported by the Australian Defence Force in this role.
  • NSW Health was responsible for leading the health response which coordinated all parts of the health system, initially to prevent, and then to manage, the pandemic.
  • Resilience NSW coordinated welfare services as part of the emergency management arrangements and provided secretariat support to the State Emergency Management Committee (SEMC). The SEMC is responsible for the coordination and oversight of emergency management policy and preparedness. Resilience NSW was also tasked with supporting the needs of communities subject to stay-at-home orders or stricter restrictions.
  • The Department of Customer Service (DCS) was responsible for the statewide strategic communications response.
  • The Department of Premier and Cabinet (DPC) held a key role in providing policy and legal services, as well as supporting the coordination of activity across a range of functional areas and decision-making by our State’s leaders.

This audit assessed the effectiveness of NSW Government agencies’ coordination (focused on the Department of Premier and Cabinet, NSW Health, the NSW Police Force, Resilience NSW and the Department of Customer Service) of the COVID-19 response in selected Local Government Areas (LGA) (Fairfield City Council and Dubbo Regional Council) after June 2021.

The audit investigated whether:

  • government decisions to apply LGA-specific Public Health Orders were supported by effective crisis management governance and planning frameworks
  • agencies effectively coordinated in the communication (and enforcement) of Public Health Orders.

While focusing on the coordination of NSW Government agencies’ response to the Delta variant in June through to November 2021, the audit also considered relevant planning and preparation activities that occurred prior to June 2021 to examine how emergency management and public health responses learned from previous events.

This audit does not assess the effectiveness of other specific COVID-19 responses such as business support. It refers to the preparedness, planning and delivery of these activities in the context of supporting communities in selected LGAs. NSW Health's contribution to the Australian COVID-19 vaccine rollout was also subject to a separate audit titled 'New South Wales COVID-19 vaccine rollout' tabled in NSW Parliament on 7 December 2022. 

This audit is part of a series of audits which have been completed, or are in progress, regarding the New South Wales COVID-19 emergency response. The Audit Office of New South Wales '2022–2025 Annual Work Program' details the ongoing focus our audits will have on providing assurance on the effectiveness of emergency responses.

In this document Aboriginal refers to the First Nations peoples of the land and waters now called Australia, and includes Aboriginal and Torres Strait Islander peoples.

Conclusion

Prior to June 2021, agencies worked effectively together to adapt and refine pre-existing emergency management arrangements to respond to COVID-19. However, lessons learned from prior reviews of emergency management arrangements, and from other jurisdictions, had not been implemented when Delta emerged in June 2021. As a result, agencies were not as fully prepared as they could have been to respond to the additional challenges presented by Delta.

In the period March 2020 to June 2021, the State's Emergency Management (EM) arrangements coordinated the New South Wales emergency response to COVID-19 with support from the Department of Premier and Cabinet (DPC) which led the cross-government COVID-19 Taskforce. NSW Government agencies enhanced the EM arrangements, which until then had typically been activated in response to natural disasters, to meet the specific circumstances of the pandemic.

However, the State Emergency Management Committee (SEMC), supported by Resilience NSW, did not address relevant recommendations arising from the 2020 Bushfires Inquiry before June 2021 and agencies did not always integrate lessons learned from other jurisdictions or scenario training exercises into emergency management plans or strategies before Delta. As a result, deficiencies in the EM arrangements, including representation of vulnerable communities on EM bodies, well-being support for multicultural communities in locked down environments and cross-agency information sharing, persisted when Delta emerged in June 2021.

It should be noted that for the purposes of this audit there is no benchmark, informed by precedent, that articulates what level of preparation would have been sufficient or proportionate. However, the steps required to address these gaps were reasonable and achievable, and the failure to do so meant that agencies were not as fully prepared as they could have been for the scale and escalation of Delta’s spread across the State.

The Delta Microstrategy complemented the EM arrangements to support greater coordination and agencies are working to improve their capability for future events

The Delta Microstrategy (the Microstrategy) led to innovations in information sharing and collaboration across the public service. Agencies involved in the response have completed, or are completing, reviews of their contribution to the response. That said, none of these reviews includes a focus on whole-of-government coordination.

On 23 July 2021, the NSW Government approved the establishment of the Microstrategy to respond to the additional challenges presented by Delta including the need to support communities most impacted by restrictions to movement and gathering in the LGAs of concern. An extensive range of government agencies were represented across eight Microstrategy workstreams, which coordinated with the existing EM arrangements to deliver targeted strategies to communities in high-risk locations and improve data and information sharing across government. This enhanced the public health, compliance, income and food support, communications and community engagement aspects of the response.

Agencies also leveraged learnings from early weeks of the Delta wave and were able to replicate those lessons in other locations. The use of pre-staging hubs in Fairfield to support food and personal hamper distribution was used a month later in Dubbo which acted as a central hub for more remote parts of the State.

Emergency management plans did not enable government to respond immediately to support vulnerable communities in high-risk LGAs or regional NSW

There are gaps in the emergency management plans relating to the support for individuals, families and businesses impacted by the stay-at-home orders and other restrictions to movement and gathering. These gaps affected agencies' ability to respond immediately when the need arose during Delta.

Emergency management plans and supporting instruments did not include provision for immediate relief for households, which meant arrangements for isolation income support and food security measures had to be designed in the early stages of Delta before it could be approved and deployed.

There were delays – sometimes only days, on occasion, weeks - in providing support to affected communities. In particular, there were delays to the provision of income support and in scaling up efforts to coordinate food and grocery hampers to households in isolation. In LGAs of concern, modest delays of a few days had a significant impact on people, especially those most vulnerable.

Although government issued stricter restrictions for workers in the Fairfield LGA on 14 July 2021, it only approved targeted income support for people in LGAs of concern on 16 August 2021.

Overall, agencies coordinated effectively to provide advice to government but there are opportunities to learn lessons to improve preparedness for future events

Agencies coordinated in providing advice to government. The advice was supported by timely public health information, although this was in the context of a pandemic, where data and information about the virus and its variants was changing regularly. However, agencies did not always consider the impact on key industries or supply chains when they provided advice to government, which meant that Public Health Orders would sometimes need to be corrected.

Public Health Orders were also updated as the response to Delta intensified or to address unintended consequences of previous orders. The frequency of changes hampered agencies' ability to effectively communicate changes to frontline staff and the community in a rapidly evolving situation.

The audit identified several occasions where there were delays, ranging from three to 21 days, between the provision of advice to government and subsequent decision-making (which we have not detailed due to the confidentiality of Cabinet deliberations). Agency officers advised of instances where they were not provided sufficient notice of changes to Public Health Orders to organise local infrastructure (such as traffic support for testing clinics) to support compliance with new requirements.

The COVID-19 pandemic arrived in Australia in late January 2020 as the bushfire and localised flooding emergencies were in their final stages. Between 2020 and mid-2021, agencies responded to the initial variants of COVID-19, managed a border closure with Victoria that lasted nearly four months and dealt with localised ‘flare-ups’ that required postcode-based restrictions on mobility in northern parts of Sydney and regional New South Wales. During this period, New South Wales had the opportunity to learn from events in Victoria which imposed strict restrictions on mobility across the State and the growing emergence of the Delta variant (Delta) across the Asia Pacific.

This section of the report assesses how emergency management and public health responses adapted to these lessons and determined preparedness for, and responses to, widespread community transmission of Delta in New South Wales.

The previous chapter discusses how agencies had refined the existing emergency management arrangements to suit the needs of a pandemic and describes some gaps that were not addressed. This chapter explores the first month of Delta (mid-June to mid-July 2021). It explores the areas where agencies were prepared and responses in place for the outbreak. It also discusses the impact of the gaps that were not addressed in the period prior to Delta and other issues that emerged.

NSW Health provided advice on the removal of restrictions based on up-to-date advice

The NSW Government discussed the gradual process for removing restrictions using the Doherty Institute modelling provided to National Cabinet on 10 August 2021. NSW Health highlighted the importance of maintaining a level of public health and safety measure bundles to further suppress case numbers. This was based on additional modelling from the Doherty Institute.

The Department of Regional NSW led discussion and planning around reopening with a range of proposal through August and September 2021. The Department of Premier and Cabinet and NSW Health jointly developed a paper to provide options on the restrictions when the State reached a level of 70% double dose vaccinations.

The roadmap to reopening was originally published on 9 September 2021. However, by 11 October 2021, the restrictions were relaxed when the 70% double dose threshold was reached to allow:

  • up to ten fully vaccinated visitors to a home (increased from five)
  • up to 30 fully vaccinated people attending outdoor gatherings (increased from 20)
  • weddings and funerals limits increased to 100 people (from 50)
  • the reopening of indoor pools for training, exercise and learning purposes only.

On the same day, the NSW Government announced further relaxation of restrictions once the 80% double dose threshold was reached. These restrictions were further relaxed on 8 November 2021. This included the removal of capacity restrictions to the number of visitors to a private residence, indoor pools to reopen for all purposes and density limits of one person for every two square metres, dancing allowed in nightclubs and 100% capacity in major stadia.

The NSW Government allowed workers in regional areas who received one vaccination dose to return to their workplace from 11 October 2021.

The Premier extended the date of easing of restrictions for unvaccinated people aged over 16 from 1 December to 15 December 2021.

Many agencies have undertaken reviews of their response to the Delta outbreak but a whole-of-government review has yet to be conducted

Various agencies and entities associated with the response to the Delta outbreak conducted after-action review processes. These processes assessed the achievements delivered, lessons learned and opportunities for improvement. However, a whole-of-government level review has not been conducted. This limits the New South Wales public service's ability to improve how it coordinates responses in future emergencies.

The agencies/entities that conducted reviews included:

  • South West Metropolitan region, Western NSW region, Fairfield Local Emergency Management Committee (LEMC), Dubbo Local Emergency Operations Controller (LEOCON), which were collated centrally by the State Emergency Operations Centre (SEOC)
  • Aboriginal Affairs NSW assessed representation and relevance of the emergency management arrangements for Aboriginal communities following the 2019 bushfires
  • Resilience NSW developed case studies to capture improved practice with regard to food security and supply chains
  • a community support and empowerment-focused after-action review undertaken by the Pillar 5 workstream of the Microstrategy.

Key lessons collated from the after-action reviews include:

  • the impact of variation in capability across agencies on the management of key aspects of the response including welfare support and logistics
  • issues with boundary differences between NSW Police Force regions, local government areas (LGA and local health districts (LHD) caused issues in delivering and coordinating services in an emergency situation 
  • the need to improve relationships between state and local Government outside of acute emergency responses to improve service delivery 
  • issues arising from impediments to information sharing between agencies and jurisdictions, such as:
    • timeliness and accuracy of data used to direct compliance activities
    • the impact of insufficient advance notice on changes to Public Health Orders
    • timely access to data across public sector agencies and other jurisdictions to inform decision-making, analysis and communications
    • gaps in data around ethnicity, geolocation of recent positive cases and infection/vaccination rates in Aboriginal communities.
  • the lack of Aboriginal community representation on many LEMCs
  • compared with the response to COVID-19 in 2020, improved coordination of communications with Culturally and Linguistically Diverse (CALD) populations with a reduction in overlapping messages and over-communication
  • improved attendance from agency representatives in LEMCs, and regional emergency operations centres (REOC) to improve interagency communications, planning, capability development and community engagement issues
  • deficiencies in succession planning and fatigue management practices
  • the potential for REOC Welfare/Well-being subgroups to be included as part of the wider efforts to community needs during emergencies.

NSW Health commenced a whole of system review of its COVID-19 response in May 2022. At the time of writing, the completion due date for the debrief is 7 November 2022. This debrief is expected to explore:

  • governance
  • engagement 
  • innovation and technology 
  • community impact 
  • workforce impact
  • system impact and performance.

NSW Health is also undertaking a parallel Intra-Action Review that is focused on the public health aspects of the response with finalisation estimated for the end of November 2022. At the time of completing this performance audit report, NSW Health had not finalised these reviews and, as a result, we cannot validate their findings against our own observations.

Recent inquiries are likely to impact the governance of emergency management in New South Wales

In March 2022, the NSW Government established an independent inquiry to examine and report on the causes of, preparedness for, response to and recovery from the 2022 floods. The Flood Inquiry report made 28 recommendations, which the NSW Government supported in full or in principle. Some of the recommendations relate directly to the governance and leadership of emergency management arrangements in New South Wales. 

The State Emergency Management Committee (SEMC) will likely be involved in, and impacted by, the recommendations arising from the Flood Inquiry with potential changes to its membership and reshaping of functional areas and agencies. At the same time, the SEMC may have a role in overseeing the changes that emerge from the SEOC consolidated after-action reviews. This can also extend to ensuring local and regional bodies have incorporated the required actions. There is a risk that the recommendations from the pandemic-based after-action reviews may not be considered due to the priority of action resulting from the Flood Inquiry.

Furthermore, there is potential for the SEMC to work with NSW Health during its system-wide review. Such an approach is likely to improve preparedness for future events.

Appendix one – Response from agencies

Appendix two – Chronology 2020–2021

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 #371 - released 20 December 2022

Published

Actions for Health 2022

Health 2022

Health
Whole of Government
Asset valuation
Compliance
Cyber security
Financial reporting
Information technology
Infrastructure
Internal controls and governance
Management and administration
Procurement
Risk
Service delivery
Shared services and collaboration
Workforce and capability

What the report is about

Result of Health cluster (the cluster) agencies' financial statement audits for the year ended 30 June 2022.

What we found

Unmodified audit opinions were issued for the financial statements for all Health cluster agencies.

The COVID-19 pandemic continued to increase the complexity and number of accounting matters faced by the cluster. The total gross value of corrected misstatements in 2021–22 was $353.3 million, of which $186.7 million related to an increase in the impairment provision for Rapid Antigen Tests (RATs).

A qualified audit opinion was issued on the Annual Prudential Compliance Statement related to five residential aged care facilities. There were 20 instances (19 in 2020–21) of non-compliance with the prudential responsibilities within the Aged Care Act 1997.

What the key issues were

The total number of matters we reported to management across the cluster decreased from 116 in 2020–21 to 67 in 2021–22. Of the 67 issues raised, four were high risk (three in 2020-21) and 37 were moderate risk (57 in 2020–21). Nearly half of all control deficiencies reported in 2021–22 were repeat issues.

Three unresolved high-risk issues were:

  • COVID-19 inventories impairment – we continued to identify issues relating to management’s impairment model which relies on anticipated future consumption patterns. RATs had not been assessed for impairment.

  • Asset capitalisation threshold – management has not reviewed the appropriateness of the asset capitalisation threshold since 2006.

  • Forced-finalisation of HealthRoster time records – we continued to observe unapproved rosters being finalised by system administrators so payroll can be processed on time. 2.6 million time records were processed in this way in 2021–22.

What we recommended

  • COVID-19 inventories impairment – ensure consumption patterns are supported by relevant data and plans.

  • Assets capitalisation threshold – undertake further review of the appropriateness of applying a $10,000 threshold before capitalising expenditure on property, plant and equipment.

  • Forced-finalisation of HealthRoster time records – develop a methodology to quantify the potential monetary value of unapproved rosters being finalised.

This report provides Parliament and other users of Health cluster (the cluster) agencies' financial statements with the results of our audits, analysis, conclusions and recommendations in the following areas:

  • financial reporting

  • audit observations.

Financial reporting is an important element of good governance. Confidence and transparency in public sector decision-making are enhanced when financial reporting is accurate and timely.

This chapter outlines our audit observations related to the financial reporting of agencies in the Health cluster (the cluster) for 2022.

Section highlights

  • Unqualified audit opinions were issued for all cluster agencies required to prepare general purpose financial statements.

  • The total gross value of corrected monetary misstatements for 2021–22 was $353.3 million, of which, $186.7 million related to an increase in the impairment provision for Rapid Antigen Tests.

  • A qualified audit opinion was issued on the ministry's Annual Prudential Compliance Statements.

Appropriate financial controls help ensure the efficient and effective use of resources and administration of agency policies. They are essential for quality and timely decision-making.

This chapter outlines our observations and insights from our financial statement audits of agencies in the cluster.

Section highlights

  • The total number of internal control deficiencies has decreased from 116 in 2020–21 to 67 in 2021–22. Of the 67 issues raised in 2021–22, four were high (2020–21: 3) and 37 were moderate (2020–21: 57); with nearly half of all control deficiencies reported in 2021–22 being repeat issues.

  • The following four issues were reported in 2021–22 as high risk:

    • impairment of COVID-19 inventories

    • inadequate review over the appropriateness of asset capitalisation threshold

    • forced-finalisation of HealthRoster time records

    • COVID-19 vaccination inventories – data quality issue at 31 March 2022.

  • Management of excessive leave balances and poor quality or lack of documentation supporting key agreements continued to be the key repeat issues observed in the 2021–22 financial reporting period.

Appendix one – Misstatements in financial statements submitted for audit

Appendix two – Early close procedures

Appendix three – Timeliness of financial reporting

Appendix four – Financial data

 

Copyright 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.