This report analyses the results of our audits of the Planning, Industry and Environment cluster agencies for the year ended 30 June 2021.

Our preferred approach is to table the ‘Report on State Finances’ in Parliament before any other cluster report. This is because the 'Report on State Finances' focuses on the audit results and observations relating to the Total State Sector Accounts, in effect a consolidation of all government agencies. This year the 'Report on State Finances' has been delayed due to significant accounting issues being considered in the Total State Sector Accounts and which may impact the Treasury and Transport clusters.

As there are no outstanding matters relating to audits in the Planning, Industry and Environment cluster impacting the Total State Sector Accounts we have decided to break with normal practice and table this cluster report ahead of the ‘Report on State Finances’.

What the report is about

The results of the Planning, Industry and Environment cluster agencies' financial statements audits for the year ended 30 June 2021.

What we found

Unmodified audit opinions were issued for all completed 30 June 2021 financial statements audits of cluster agencies. Three audits are ongoing.

An 'Other Matter' paragraph was included in the Independent Planning Commission's (the IPC) audit opinion because the prior year comparative figures were not audited. Prior to 2020–21, the IPC was not required to prepare separate financial statements under the Public Finance and Audit Act 1983 (PF&A Act). The financial reporting provisions of the Government Sector Finance Act 2018 now require the IPC to prepare financial statements.

The number of identified misstatements increased from 51 in 2019–20 to 54 in 2020–21.

The 2010–11 to 2019–20 audits of the Water Administration Ministerial Corporation’s (the Corporation) financial statements are incomplete due to insufficient records and evidence to support the transactions of the Corporation, particularly for the earlier years. Management has commenced actions to improve the governance and financial management of the Corporation. These audits are currently in progress and the 2020–21 audit will commence shortly.

There are 609 State controlled Crown land managers (CLMs) across New South Wales that predominantly manage small parcels of Crown land.

Eight CLMs prepared and submitted 2019–20 financial statements by the revised deadline of 30 June 2021. A further 24 CLMs did not prepare financial statements in accordance with the PF&A Act. The remaining CLMs were not required to prepare 2019–20 financial statements as they met NSW Treasury's financial reporting exemption criteria.

The Department of Planning, Industry and Environment's (the department) preliminary assessment indicates that 60 CLMs are required to prepare financial statements in 2020–21. To date, no CLMs have prepared and submitted financial statements for audit in 2020–21.

There are also 120 common trusts that have never submitted financial statements for audit. Common trusts are responsible for the care, control and management of land that has been set aside for specific use in a certain locality, such as grazing, camping or bushwalking.

What the key issues were

The number of matters we reported to management increased from 135 in 2019–20 to 180 in 2020–21, of which 40 per cent were repeat findings.

Seven high-risk issues were identified in 2020–21:

• system control deficiencies at the department relating to user access to HR and payroll management systems, vendor master data management and journal processing, which require manual reviews to mitigate risks
• deficiencies related to the Centennial Park and Moore Park Trust's tree assets valuation methodology
• the Lord Howe Island Board did not regularly review and monitor privileged user access rights to key information systems
• the Natural Resources Access Regulator identified and adjusted three prior period errors retrospectively, which indicate deficiencies within the financial reporting processes
• deficiencies relating to the Parramatta Park Trust's tree assets valuation methodology
• lease arrangements have not been confirmed between the Planning Ministerial Corporation and Office of Sport regarding the Sydney International Regatta Centre
• the Wentworth Park Sporting Complex land manager (the land manager) has a $6.5 million loan with Greyhound Racing NSW (GRNSW). GRNSW requested the land manager to repay the loan. However, the land manager subsequently requested GRNSW to convert the loan to a grant. Should this request be denied, the land manager would not be able to continue as a going concern without financial support. This matter remains unresolved for many years.

There continues to be significant deficiencies in Crown land records. The department uses the Crown Land Information Database (CLID) to record key information relating to Crown land in New South Wales that are managed and controlled by the department and land managers (including councils and land managers controlled by the state). The CLID system was not designed to facilitate financial reporting and the department is required to conduct extensive adjustments and reconciliations to produce accurate information for the financial statements.

The department is implementing a new system to record Crown land (the CrownTracker project). The department advised that the project completion date will be confirmed by June 2022.

What we recommended

The department should ensure CLMs and common trusts meet their statutory reporting obligations.

Cluster agencies should prioritise and action recommendations to address internal control deficiencies, with a focus on addressing high-risk and repeat issues.

The department should prioritise action to ensure the Crown land database is complete and accurate. This will allow the department and CLMs to be better informed about the Crown land they control.

This report provides parliament and other users of the Planning, Industry and Environment cluster (the cluster) agencies’ financial statements with the results of our audits, our observations, 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 Planning, Industry and Environment cluster (the cluster) for 2021.

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 statements audits of agencies in the Planning, Industry and Environment cluster.

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.

This report analyses the results of our audits of the Health cluster agencies for the year ended 30 June 2021.

Our preferred approach is to table the ‘Report on State Finances’ in Parliament before any other cluster report. This is because the 'Report on State Finances' focuses on the audit results and observations relating to the Total State Sector Accounts, in effect a consolidation of all government agencies. This year the 'Report on State Finances' has been delayed due to significant accounting issues being considered in the Total State Sector Accounts and which may impact the Treasury and Transport clusters.

As there are no outstanding matters relating to audits in the Health cluster impacting the Total State Sector Accounts we have decided to break with normal practice and table this cluster report ahead of the ‘Report on State Finances’.

What the report is about

The results of Health cluster (the cluster) agencies' financial statements audits for the year ended 30 June 2021.

What we found

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

The COVID-19 pandemic increased the complexity and number of accounting matters faced by the cluster. The total gross value of corrected misstatements in 2020–21 was $250.2 million, of which $226.0 million were pandemic related.

A qualified audit opinion was issued on the Annual Prudential Compliance Statement. The basis of the qualification related to 19 instances (18 in 2018–19) of non-compliance relating to three of the 20 prudential requirements across five aged care facilities.

What the key issues were

The total number of matters we reported to management across the cluster increased from 112 in 2019–20 to 116 in 2020–21. Of the 116 issues raised in 2020–21, three were high risk (one in 2019–20) and 57 were moderate risk (47 in 2019–20). Nearly one half of the issues were repeat issues.

The three new high-risk issues identified were:

Hotel Quarantine (HQ) fees

The absence of a tailored debt recovery strategy, data integrity issues and uncertainties around future HQ arrangements increased risks around the recoverability of HQ fees from travellers.

COVID-19 inventories

Data errors and anomalies in the impairment model and difficulties forecasting key factors impacting the management of Personal Protective Equipment (PPE) increased uncertainty associated with the valuation and impairment of COVID-19 inventories.

COVID-19 vaccines

The Commonwealth did not provide information about the cost of vaccines provided to NSW free of charge, which required the performance of internal valuations to reflect the consumption of vaccines in the financial statements.

What we recommended

Hotel Quarantine (HQ) fees

Develop a tailored assessment methodology to estimate recoverability of HQ fees and work with Revenue NSW to develop a tailored debt recovery strategy.

COVID-19 inventories

Review the current stocktaking and impairment methodology to incorporate validation of data key to the management of COVID-19 related PPE.

COVID-19 vaccines

Work with the Commonwealth to obtain primary price information on COVID-19 vaccines.

This report provides Parliament and other users of the Health cluster’s financial statements with the results of our audits, our observations, 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 2021.

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 Health cluster.

Findings reported to management

The number of findings reported to management has increased, with 47.4 per cent of all issues being repeat issues

Breakdowns and weaknesses in internal controls increase the risk of fraud and error. Deficiencies in internal controls, matters of governance interest and unresolved issues were reported to management and those charged with governance of cluster agencies. The Audit Office does this through our management letters, which include observations, implications, recommendations and risk ratings.

In 2020–21, there were 116 findings raised across the cluster (112 in 2019–20). 47.4 per cent of all issues were repeat issues (38.4 per cent in 2019–20).

A delay in implementing audit recommendations increases the risk of intentional and accidental errors in processing information, producing management reports and generating financial statements. This can impair decision-making, affect service delivery and expose agencies to fraud, financial loss and reputational damage. Poor controls may also mean agency staff are less likely to follow internal policies, inadvertently causing the agency not to comply with legislation, regulation and central agency policies.

The table below describes the common issues identified across the cluster by category and risk rating.

Complexities arising from the COVID-19 response

The 2020–21 audit identified three new high-risk findings

COVID-19 has presented the cluster with several new accounting challenges. New and evolving matters arose from changes to operating conditions, which characterised the 2020–21 financial reporting period. Issues with a high degree of estimation uncertainty will require ongoing attention as the strategies employed to deal with the COVID-19 pandemic evolve.

Expected rate of recovery of outstanding Hotel Quarantine invoices

The estimation of the amount likely to be recovered is complicated not only by the uncertainties that exist regarding the assumptions those estimations rely upon, but also the debt collection processes and strategies put into place to manage the accumulated debtors' balance. Debt collection is not administered by the cluster, but rather Revenue NSW. We observed an absence of a methodology to assess the likelihood of recovery. Instead, Sydney Local Health District was relying on Revenue NSW to develop and execute on a collection strategy. Sydney Local Health District was using the same approach to hotel quarantine debts as it did to other Health receivables. As the approach to managing international borders evolves over time, so too will the cluster's need to develop robust estimation models to assess the likely collectability of debtors. 

Procurement, management and impairment of COVID-19 inventories

$656.2 million of COVID-19 inventories were procured in 2020–21, with $220.2 million consumed; $558.7 million impaired and a further $217.1 million written off. Estimates of the degree to which inventories are expired, not fit for purpose or are faulty is often based on management judgement at all stages in the procurement cycle.

With respect to the stocktaking methodology applied, the following issues were identified:

• discrepancies noted in the stock bin listing provided for audit
• discrepancies in the recount sheet generated
• inconsistent application of the stocktake methodology
• inconsistent labelling of quarantined stock
• a lack of an approach for validating stock expiry dates, which is a key input to the impairment calculations.

Although management had developed processes and a methodology to count as well as to assess the level of inventory that was not fit for purpose, ongoing attention to the operating environment that emerges post pandemic will be important in assessing the degree to which existing COVID-19 inventories can be integrated into a ‘business as usual’ model going forward. Further refinement of the key elements of the stocktaking methodology will also be required to ensure that key inputs upon which management relies to calculate the year-end inventory impairment provision can be appropriately validated.

Valuation and recognition of COVID-19 vaccines received from the Commonwealth Government

The 2020–21 financial reporting period saw the Commonwealth acquire COVID-19 vaccines and provide these to state jurisdictions to dispense to their communities. The vaccines, although provided free of charge require recognition. However, Health entities were not responsible for acquiring the vaccines and data on the vaccines' cost was not shared by the Commonwealth. Management undertook a valuation using publicly available data to estimate the value to attribute to the vaccine inventory; developed new systems and leveraged existing pharmacy systems to track physical quantities received from the Commonwealth and ultimately distributed to NSW citizens. As the response to the pandemic evolves, larger quantities, and new lines of vaccine stock will be dealt with, and policy settings will need to adapt when patterns of distribution of those vaccines (e.g., timing of third booster shots) emerge. The Ministry of Health will need to ensure that the valuations applied to the prices of inventory distributed and held in stock are as accurate as possible. This can be done through further refinement of the existing valuation methodology, obtaining price information from the Commonwealth and engaging specialist pharmaceutical valuers.

Emerging trends

Recognition of provisions without sufficient support

Several NSW Health entities raised accruals and provisions in 2020–21, which did not have an appropriate basis for recognition. Liabilities can only be recognised where there is a present obligation to make a payment arising from a past event. A number of these errors remain uncorrected in the financial statements of those entities as they are not material, individually or in aggregate to the financial statements as a whole. Increased training and guidance are required to ensure that treatment within the cluster is consistent and reflects events that have occurred and give rise to obligations.

Treatment of Commonwealth funding

In the 2020–21 and 2019–20 financial reporting periods, we observed prior period errors arising from the treatment of Commonwealth funding. These errors related to recognising revenue under funding agreements entered into with the Commonwealth in the incorrect period. The conditions of these funding arrangements, the transactional information requiring validation and the circumstances when revenue should be recognised are not always clear and can be complex. Early and continuous engagement with the Commonwealth is required to ensure that revenue recognition principles are consistently applied across the cluster.

Key repeat issues

Management of excessive annual leave

NSW Treasury guidelines stipulate annual leave balances exceeding 30 days are considered excess annual leave balances. Managing excess annual leave balances has been reported as an issue for the cluster for more than five years, with the average percentage of employees with excessive leave balances over the last five years being 36.1 per cent (35.5 per cent over five years covering 2015–16 to 2019–20).

The operational demands required to manage the COVID-19 pandemic have presented new challenges for the cluster in trying to manage its excessive leave balances. 39.2 per cent of employees now have excess leave balances at 30 June 2021 (35.4 per cent at 30 June 2020).

The state's leave policy C2020-12 Managing Accrued Recreation Leave Balances requires agencies to manage excessive leave balances to 30 days or less to maintain their workforces physical and mental health.

Accurate time recording

Forced-finalisation of time records by system administrators within HealthRoster remains an issue and we continue to observe time records forced-finalised by system administrators so pay runs can be finalised on a timely basis. During 2020–21, a total of two million (2.2 million in 2019–20) time records were force approved, which represents 5.7 per cent of total time records (6.9 per cent in 2019–20).

Existence, completeness and accuracy of key agreements

Delivery of major capital projects

Health Infrastructure (a division of the Health Administration Corporation) is responsible for the delivery of major capital projects with a budgeted spend of more than $10.0 million. Health Infrastructure oversee the planning, design, procurement, and construction phases. Capital works in progress are recognised in the financial statements of the health entity that intends to use those assets upon completion. The health entities recognise both the capital work in progress and the revenue associated with the capital funding from the Ministry for the construction of the assets. Capital funding is currently agreed with health entities as part of the annual Service Agreement. The assumption that the health entities control the assets during their construction is consistent with Health Infrastructure's role as an agent for the health entity and the Ministry's policy directive PD2020-033 'Management and control of Health Administration Corporation owned Real Property'.

We continued to observe a lack of clarity regarding agreements between Health Infrastructure, the Ministry and the cluster agency that will eventually receive the completed asset. This can lead to confusion and uncertainty around the rights and obligations of each party to the transaction.

Cross border patient funding arrangements

When patients require medical care in a jurisdiction where they are not generally domiciled, there are arrangements in place to provide funding to support cross border patient treatments. We have previously observed that agreements between NSW and other jurisdictions have not been finalised, and this continues to be the case. In the case of Victoria, no agreement has been finalised for the past seven years.

We continue to note that the cluster has long outstanding receivables and payables with other states. The absence of formal agreements between the states hampers the settlement of the debts relating to the treatment of cross border patients. The following table shows the status of Cross Border Agreements between NSW and other jurisdictions:

Albury Base Hospital

Albury Base hospital is located on the border of NSW and Victoria and services residents of both states. Documentation supporting the extension of the expired Intergovernmental Agreement 2009–2017 between NSW and Victoria in relation to the integration of health services in Wodonga and Albury could not be located.

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.

This report analyses the results of our audits of the Regional NSW cluster agencies for the year ended 30 June 2021.

Our preferred approach is to table the ‘Report on State Finances’ in Parliament before any other cluster report. This is because the 'Report on State Finances' focuses on the audit results and observations relating to the Total State Sector Accounts, in effect a consolidation of all government agencies. This year the 'Report on State Finances' has been delayed due to significant accounting issues being considered in the Total State Sector Accounts and which may impact the Treasury and Transport clusters.

As there are no outstanding matters relating to audits in the Regional NSW cluster impacting the Total State Sector Accounts we have decided to break with normal practice and table this cluster report ahead of the ‘Report on State Finances’.

What the report is about

The results of the Regional NSW cluster (the cluster) agencies’ financial statement audits for the year ended 30 June 2021.

What we found

Unmodified audit opinions were issued for all completed 30 June 2021 financial statement audits of cluster agencies. Four audits are ongoing.

The number of misstatements identified in the financial statements of cluster agencies decreased from 27 in 2019–20 to seven in 2020–21.

The Department corrected an understatement of $82.2 million in prepaid income related to the Bushfire Clean-up Program.

What the key issues were

Local Land Services (LLS) undertook a comprehensive revaluation of asset improvements on land reserves used for moving stock (travelling stock reserves).

The revaluation process identified that improvements on land reserves, with a value of $93.0 million, had not been previously recognised in the financial statements. LLS corrected this error by restating the 2019–20 comparative balances in its 2020–21 financial statements.

The Forestry Corporation of NSW revalued its biological assets that comprise approximately 225,000 hectares of softwood plantations and 34,000 hectares of hardwood forests. The current year valuation resulted in $71.4 million decrement in the total biological assets from $824.9 million in 2019–20 to $753.5 million in 2020–21.

The number of matters reported to management decreased from 36 in 2019–20 to 19 in 2020–21. Twelve moderate risk issues were identified and 47 per cent of reported issues were repeat issues.

What we recommended

Cluster agencies should prioritise and action recommendations to address internal control deficiencies.

This report provides Parliament and other users of the Regional NSW cluster agencies’ financial statements with the results of our audits, our observations, 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 Regional NSW cluster for 2021.

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 Regional NSW cluster.

Appendix one - Misstatements in financial statements submitted for audit

Appendix two - Early close procedures

Appendix three - 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.

What the report is about

This audit assessed whether adults in custody have effective access to health services. The audit examined the activities of Justice Health and Corrective Services NSW.

What we found

The majority of custodial patients receive timely health care, but a small proportion of patients are not receiving care within target timeframes.

Eleven per cent of scheduled health appointments are not attended, and agencies can do more to understand the reasons for non-attendance.

Demand for mental health care exceeds service capacity and some patients are held in environments not appropriate for their needs.

Justice Health's information systems do not support the effective transfer of medical records as patients move around the prison network.

Not all patients are released from custody with a discharge plan.

Justice Health's system managers do not receive sufficiently detailed reports to understand strategic risks or opportunities to improve access to health services.

Public and private prison health operators do not report against consistent performance measures.

Justice Health is mandated to assess health services in private prisons. This conflicts with its role as a contracted provider of health services in the private prison system.

What we recommended

Enhanced reporting on patient access to health services, to identify risks and challenges across key service areas.

Identification and implementation of the improvements required for information to be shared across the custodial network and with external health providers.

Development of a framework to govern and monitor costs for patient health escorts and movements.

Development of a framework to govern responsibilities for mental health services.

Progression of infrastructure plans that address the lack of specialist accommodation for mental health patients and aged and frail patients.

Collaboration to align the performance measures to enable benchmarking between public and private prison health services.

Action to remediate the conflicting monitoring arrangements of public and private prison health operators.

Access to health services in custody

This audit examined whether adults in the New South Wales public prison system have effective access to health services. In making this assessment, we considered whether Justice Health and Corrective Services NSW effectively cooperate and coordinate so that patients have timely access to health services, systems and practices support continuity of care, and access to health services is monitored and reviewed.

As part of this audit, we assessed actions undertaken by Justice Health and Corrective Services NSW in managing the first COVID-19 outbreak in 2020. However, due to the timing of this audit report, this audit does not report on the agencies’ response to managing the current outbreak of COVID-19 in September 2021.

Health services in New South Wales prisons are delivered by both public and private operators. The public prison system is made up of 33 correctional centres and the Long Bay Hospital. All health services in the public prison system are delivered by the Justice Health and Forensic Mental Health Network (Justice Health).

In the public prison system, Justice Health is responsible for the clinical care of patients with physical and mental illnesses. Clinicians provide health assessments, treatments, medication management, and some counselling services in prison health clinics. Patients are triaged by primary health nurses and if they require treatments or medication, they are referred to prison‑based doctors including specialists or other clinicians. Patients requiring complex or emergency care are transferred to hospitals or other specialty services outside the prison complex.

Private operators deliver health services in three private prisons through contract arrangements with Corrective Services NSW. Justice Health delivers health care at one correctional centre via a contract arrangement with Corrective Services NSW. In total, contracted health service operators deliver health care to approximately 25 per cent of the New South Wales prison population.

Justice Health is required by law to monitor the performance of contracted health service providers in New South Wales prisons, including services provided at the John Morony Correctional Centre. The Auditor‑General’s mandate does not permit a direct examination of information held by private sector entities, however this audit does assess the effectiveness of Justice Health's role in monitoring health services in private prisons.

Corrective Services NSW is responsible for security in public prisons, including the facilitation of patient access to health care at prison health clinics and the transfer of patients to hospitals and other health services outside of the prison environment. Corrective Services NSW also delivers behaviour‑based psychology services. Some are delivered as behaviour modification courses that aim to reduce criminal and offending activity amongst the prison population. These programs may be linked to parole or other custodial conditions. Other psychology services include counselling for people with self‑harming or suicidal behaviours.

Research from the Australian Institute of Health and Welfare indicates that people in custody are more likely than the general population to be affected by chronic and acute illnesses, including higher rates of mental illness and communicable diseases¹. In March 2021, there were 13,063 adults in custody in New South Wales.

The objective of this performance audit was to assess whether adults in the public prison system have effective access to health services. In making this assessment, we considered whether Justice Health and Corrective Services NSW effectively cooperate and coordinate so that:

• patients have timely access to health services
• systems and practices support the continuity of health care
• access to health services is monitored, reviewed, and reported across the network. 

1. Key findings

The majority of custodial patients receive timely health care, but a small proportion of patients with priority appointments are not receiving care within target timeframes

Approximately half of all health care provided by Justice Health is immediate. It is delivered to 'walk‑in' patients as soon as they present at prison health clinics. Most of these patients are receiving daily medications, while a small proportion require urgent or immediate care for injuries or illnesses. The other half of prison health care is delivered via scheduled appointments. Patients waiting for health appointments are given a priority rating according to the time within which they should be seen by a clinician.

Patients requiring the most time‑critical care are given a Priority 1 rating. These patients should receive treatment within one to three days. In December 2020, the average wait time for Priority 1 treatment was five and a half days, almost double the target. This is an improvement on wait times in June 2019, when the average wait time was just over 13 days. Justice Health does not assess or measure the impacts of delayed care on these patients.

According to Justice Health, the high numbers of ‘walk‑ins’ contribute to increased wait times for medical appointments. In addition, some specialty health clinics operate weekly, which means that patients cannot be seen by specialists within a one to three‑day timeline. Security events such as prison lockdowns can also contribute to increased wait times, as they limit the access that patients have to prison health clinics during out‑of‑cell hours.

If patients need emergency medical treatment, they are transferred to hospitals in line with Justice Health's policy. In 2020, just over 1,000 patients were transferred to hospital for emergency medical care.

A significant proportion of prison health appointments are not attended, and not enough is being done to understand the reasons, or to improve attendance rates

In 2020, 11 per cent of all scheduled health appointments in prison clinics were not attended. This amounts to approximately 60,000 appointments over the year. Non‑attended appointments have flow‑on impacts on wait times and backlogs for scheduled health appointments. Understanding why they occur is necessary to improve efficiencies in scheduling and patient access to health services.

In 2020, the most common reason for non‑attended health appointments was: 'patient unable to attend'. Justice Health clinicians use this when patients do not arrive at the prison health clinic at the scheduled time, and clinicians lack any other information to explain the non‑attendance.

The second most common recorded reason for non‑attended appointments was: 'cancelled by Corrective Services NSW'. These cancellations are due to operational or security reasons, including prison lockdowns. Data from Justice Health indicates that in 2020, there were an average of 12 lockdowns per week across New South Wales prisons.

A range of factors can impact on patient attendance at appointments, some of which are unavoidable. That said, more can be done to understand and reduce non‑attendance. For example, there is potential for Corrective Services NSW to implement tighter protocols to update information about patient availability on the daily movement lists. This might include checking whether patients are willing to attend appointments. Similarly, there is potential for Justice Health clinicians to implement tighter protocols to check patient lists ahead of scheduled appointments, and to re‑schedule appointments where patients are unavailable.

Demand for mental health care exceeds service capacity and some patients are held in environments that are not appropriate for their needs

There is a high demand for mental health services in New South Wales prisons. In March 2021, at least 143 mental health patients were waiting for access to an acute or sub‑acute mental health unit across the New South Wales prison system. The average wait time for a mental health facility was 43 days. Seventeen patients had wait times of over 100 days. Patients waiting for sub‑acute mental health services had longer wait times than those waiting for acute mental health services.

There are limited mental health beds for women across the New South Wales prison network. There are ten allocated beds for women at the Mental Health Screening Unit at Silverwater Correctional Complex, and no allocated beds for women at Long Bay Hospital.

A lack of bed availability in the Forensic Hospital means that, as of February 2021, 63 forensic patients were being held in mental health facilities in mainstream prisons, when they should have been accommodated in the Forensic Hospital. Some of these forensic patients have been held in mainstream prison facilities for decades.

Cross‑agency co‑operation and planning is required to identify and build infrastructure that will reduce wait times for mental health beds. Over several years, Justice Health has developed, reviewed, and worked to progress a strategic plan for NSW Forensic Mental Health that includes enhanced mental health bed capacity across the NSW system. The latest version of this strategic plan remains in draft and has yet to be approved by the NSW Ministry of Health.

In 2016, Corrective Services NSW commenced a Prison Bed Capacity Program. It was focussed on enhancing capacity across the prison system and did not include specialist health beds. More recently, Corrective Services NSW has been developing a business case to improve the provision of specialist health care facilities across the network, including mental health facilities.

Justice Health's clinical information systems do not support the effective transfer of health appointments or medication records as patients are moved to new prison locations

Justice Health's clinical information systems are multiple and complex. There are five health information systems that include a mix of electronic and paper‑based records. Information management systems contain clinical records, appointment information, medication records, dental records, and specialist health information. Corrective Services NSW maintain separate information systems relating to prison records and psychology treatment information.

The transfer of people across different correctional centres is a frequent occurrence. In 2020, there were over 41,000 movements between correctional centres. People are transferred for a range of reasons including for security purposes, or to be located closer to hospitals or specialist health services.

Justice Health receives a list of patient transfers one day prior to transfer. Nurses are required to prepare medications and clinical handovers for patients with complex health conditions. These handovers are verbal, however short timeframes mean that handover is not always possible.

While each patient's electronic health records are available across the network, transfer of appointment waitlists must be done manually. There is no automatic alert within the information systems to tell staff that a patient has been moved to another prison. There is a risk that if appointment records are not manually updated, or if staff at destination clinics are not contacted, then appointments will be overlooked.

Justice Health is working with eHealth NSW to develop an improved Electronic Medication Management (EMM) program with expected delivery in late 2021. The EMM has potential to improve the transfer of patient medication records, but it will not fully remediate all inefficiencies of the current systems.

Corrective Services NSW and Justice Health do not engage in sufficient joint planning to improve efficiencies in transports or escorts to health services

Corrective Services NSW and Justice Health do not engage in joint system‑level planning to mitigate the risks and the costs associated with transferring patients to health clinics in prisons, or non‑prison‑based health care. There are no protocols, and limited sharing of information to improve efficiencies in planning and coordinating patient transfers.

Corrective Services NSW does not collate or report on the costs of transporting patients to hospitals and specialist care. While there is data on the overall cost of medical escorts, estimated to be $19.9 million in 2020, Corrective Services NSW is not able to disaggregate this data to determine the reasons for transfers or the system‑level costs. For example, Corrective Services NSW does not know how many prison lockdowns occur when hospital transfers are required.

Medical escorts to specialist health services and hospitals increase the costs to the prison system and contribute to risks in prison management. Medical escorts contributed to 16 per cent of metropolitan prison lockdowns at the peak in 2018, though escort numbers have since been declining. Some Local Health Districts report significant concerns around safety incidents and assaults on staff during medical escorts to hospital.

Corrective Services NSW does not know if transport costs have increased since the 2016 Prison Bed Capacity Program which expanded prison beds in regional New South Wales. To date, there has been no assessment of the cost of taking patients to tertiary hospitals or specialist services. Corrective Services NSW has identified this as an area for improvement.

Justice Health's system managers do not receive sufficiently detailed reports on wait times for health care, to understand strategic risks or opportunities for system improvement

Justice Health's senior executives receive monthly reports on patient wait times for services in prison health clinics. These reports contain headline data about the numbers of days that patients wait for scheduled health appointments by their allocated priority level. Wait time data are averaged across all New South Wales prison health clinics. With some exceptions, almost all executive level reports describe system‑wide appointment wait times without offering further specific detail. For example, there is limited information which would allow managers to understand the performance of specialty health groups, or to make any comparative analysis of the performance of different prison facilities.

Executive reports are also not detailed enough to indicate whether prisons with particular security classifications offer greater or lesser access to health services. It is not possible to assess whether patients in metropolitan or regional prisons have different levels of health service access. This prevents managers from identifying strategic risks across the prison network, targeting resources to the areas of greatest risk, and making strategic improvements in system performance.

Trend data on wait times for the different health specialty areas is also required to enable senior managers to compare wait times across prison facilities, security classifications, and localities.

In response to the preliminary findings of this audit, Justice Health has made some improvements to its executive‑level wait time reports. This includes additional detail on health appointment wait times by prison facilities and wait times by health specialty areas.

It is not possible to compare or benchmark the performance of public and private prison health operators or to compare prison health against community health standards

It is not possible to compare or benchmark the performance of the public and private prison health operators in New South Wales using the current Key Performance Indicator (KPI) data. KPI data do not correlate across the public and private systems.

Justice Health reports to the Ministry of Health on 44 prison health KPIs. The 44 KPIs for the public prison system do not align with the seven KPIs the private health operators report against in their contracts with Corrective Services NSW. This means that public and private operators focus on different service areas. For example, private operators have a performance measure for ensuring that custodial patients are provided with release plans. Justice Health does not have a similar measure.

The KPI specifications for the private prison health system were developed by Corrective Services NSW with input from the Ministry of Health. The KPI specifications for the public prison health system were developed by the Ministry of Health in collaboration with Justice Health. There is no rationale for the difference in performance indicators across the public and private systems.

Private providers currently deliver prison services to 25 per cent of the prison population of New South Wales. This proportion has been increasing since 2016. Public and private health operators deliver comparable health services so there is scope to compare performance across the systems.

Justice Health aligns its standard for prison health services with a 'community’ standard of health care access. However, with existing health monitoring measures, it is not possible to assess how well Justice Health is tracking against community health standards with available data from most health specialties.

There is an inherent conflict of interest in Justice Health's monitoring role of health services in private prisons, as Justice Health is also a provider of health services in a private prison

There is a legislated requirement for Justice Health to monitor the performance of private health operators in New South Wales prisons. This monitoring role is described in the Crimes (Administration of Sentences) Act 1999.

Justice Health's monitoring role includes the collection and analysis of health performance data from private health operators, and periodic site visits to assess health service performance. Justice Health reports the findings of monitoring activities to Corrective Services NSW, the contract manager for private prisons.

Justice Health's monitoring role commenced in the late 1990s. In recent years, this role has expanded as the NSW Government has increased the number of privately managed prisons across the state. Justice Health now monitors health services in four private prisons, accounting for approximately one quarter of all custodial patients in the New South Wales prison system.

In 2018, Justice Health was awarded a contract to provide health services at the John Morony Correctional Centre. Justice Health also monitors the health services this Correctional Centre. The timing of the 1999 legislation did not anticipate that Justice Health would be a provider of the services it is required to monitor.

Justice Health has taken steps to maintain independence and transparency in its monitoring role by establishing a number of arms‑length governance arrangements. Justice Health set up a Commissioning Unit that operates independently from its service delivery operations. Justice Health also established an alternative reporting chain via a Board subcommittee to oversee the performance of health providers in private prisons.

Despite all actions to establish independence, the monitoring role confers dual responsibilities on the Chief Executive of Justice Health as both an operational manager of health services in a private prison and as a manager responsible for monitoring these same services. As a result, the Chief Executive of Justice Health has access to information about the overall performance of the private prison health system in New South Wales.

As a competitor for the provision of health services in privately operated prisons, Justice Health has access to information to which other private health providers do not. This potentially gives Justice Health a competitive advantage over other private health operators.

2. Recommendations

By December 2022, Justice Health should:

1. enhance reporting on patient access to health services to ensure that system managers can identify risks, challenges, and system improvements across key areas of its service profile

2. in collaboration with the NSW Ministry of Health, identify and implement the required improvements to its health information management systems that will enable effective transfers of patient clinical records and appointment information across the custodial network and with external health providers.

By December 2022, Justice Health and Corrective Services NSW should:

3. develop a joint framework to govern and monitor the costs of their common and connected responsibilities for patient health movements across the prison network and to external health services

4. develop a joint framework to govern their common and connected responsibilities for mental health services.

By December 2022, Justice Health and Corrective Services NSW, in collaboration with the NSW Ministry of Health, should:

5. progress infrastructure plans and projects that address the lack of specialist accommodation for mental health patients and aged and frail patients

6. standardise and align the key performance indicators that monitor the performance of health operators in public and private prisons so that system‑wide benchmarking is possible.

By December 2022, the NSW Ministry of Health should:

7. take action to remediate the conflicting monitoring arrangements of public and private prison health operators.

Appendix one – Response from agencies

Appendix two – About the audit

Appendix three – Performance auditing

Copyright notice

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

Parliamentary reference - Report number #356 - released (23 September 2021).

What the report is about

This report assessed how effectively the Department of Planning, Industry and Environment (DPIE) and NSW Treasury have supported state agencies to manage climate risks to their assets and services.

Climate risks that can impact on state agencies' assets and services include flooding, bushfires, and extreme temperatures. Impacts can include damage to transport, communications and energy infrastructure, increases in hospital admissions, and making social housing or school buildings unsuitable.

NSW Treasury estimates these risks could have significant costs.

What we found

DPIE and NSW Treasury’s support to agencies to manage climate risks to their assets and services has been insufficient.

In 2021, key agencies with critical assets and services have not conducted climate risk assessments, and most lack adaptation plans.

DPIE has not delivered on the NSW Government commitment to develop a state-wide climate change adaptation action plan. This was to be complete in 2017.

There is also no adaptation strategy for the state. These have been released in all other Australian jurisdictions. The NSW Government’s draft strategic plan for its Climate Change Fund was also never finalised.

DPIE’s approach to developing climate projections is robust, but it hasn’t effectively educated agencies in how to use this information to assess climate risk.

NSW Treasury did not consistently apply dedicated resourcing to support agencies' climate risk management until late 2019.

In March 2021, DPIE and NSW Treasury released the Climate Risk Ready NSW Guide and Course. These are designed to improve support to agencies.

What we recommended

DPIE and NSW Treasury should, in partnership:

• enhance the coordination of climate risk management across agencies
• implement climate risk management across their clusters.

DPIE should:

• update information and strengthen education to agencies, and monitor progress
• review relevant land-use planning, development and building guidance
• deliver a climate change adaptation action plan for the state.

NSW Treasury should:

• strengthen climate risk-related guidance to agencies
• coordinate guidance on resilience in infrastructure planning
• review how climate risks have been assured in agencies’ asset management plans.

According to the Intergovernmental Panel on Climate Change in 2021, each of the last four decades has been successively warmer and surface temperatures will continue to increase until at least the mid-century. The Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Bureau of Meteorology (BoM) have reported that extreme weather across Australia is more frequent and intense, and there have been longer-term changes to weather patterns. They also report sea levels are rising around Australia increasing the risk of inundation and damage to coastal infrastructure and communities.

According to the Department of Planning, Industry and Environment (the department), in New South Wales the impacts of a changing climate, and the risks associated with it, will be felt differently across regions, populations and economic sectors. The department's climate projections indicate the number of hot days will increase, rainfall will vary across the state, and the number of severe fire days will increase.

The NSW Government is a provider of essential services, such as health care, education and public transport. It also owns and manages around $365 billion in physical assets (as at June 2020). More than $180 billion of its assets are in major infrastructure such as roads and railway lines.

In NSW, climate risks that could directly impact on state agencies' assets and services include flooding, bushfires, and extreme temperatures. In recent years, natural hazards exacerbated by climate change have damaged and disrupted government transport, communications and energy infrastructure. As climate risks eventuate, they can also increase hospital admissions when people are affected by poorer air quality, and make social housing dwellings or schools unsafe and unusable during heatwaves. The physical impacts of a changing climate also have significant financial costs. Taking into account projected economic growth, NSW Treasury has estimated that the fiscal and economic costs associated with natural disasters due to climate change will more than triple per year by 2061.

The department and NSW Treasury advise that leading practice in climate risk management includes a process that explicitly identifies climate risks and integrates these into existing risk management, monitoring and reporting systems. This is in line with international risk management and climate adaptation standards. For agencies to manage the physical risks of climate change to their assets and services, leading practice identified by the department means that they need to:

• use robust climate projection information to understand the potential climate impacts
• undertake sound climate risk assessments, within an enterprise risk management framework
• implement adaptation plans that reduce these risks, and harness opportunities.

Adaptation responses that could be planned for include: controlling development in flood-prone locations; ensuring demand for health services can be met during heatwaves; improving thermal comfort in schools to support student engagement; proactive asset maintenance to reduce disruption of essential services, and safeguarding infrastructure from more frequent and intense natural disasters.

According to NSW Treasury policy, agencies are individually responsible for risk management systems appropriate to their context. The department and NSW Treasury have key roles in ensuring that agencies are supported with robust information and timely, relevant guidance to help manage risks to assets and services effectively, especially for emerging risks that require coordinated responses, such as those posed by climate change.

This audit assessed whether the department and NSW Treasury are effectively supporting NSW Government agencies to manage climate risks to their assets and services. It focused on the management of physical risks to assets and services associated with climate change.

Appendix one – Response from agencies

Appendix two – Timeline of key activities 

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 #355 - released (7 September 2021).

What the report is about

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

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

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

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

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

What we found

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

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

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

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

What we recommended

DPIE should:

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

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

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

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

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

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

Appendix one – Response from agency

Appendix two – Planning determination pathways

Appendix three – About the audit

Appendix four – Performance auditing

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

Parliamentary reference - Report number #354 - released (27 July 2021).

The Auditor-General, Margaret Crawford released a report today highlighting a decline in net profits of electricity agencies and the distributions the government received from these agencies. The report also details continuing issues in the management of Crown Land and TAFE NSW's student administration system.

Auditor-General, Margaret Crawford released a report on the planning and environment cluster today, concluding that the quality of financial reporting is improving. However, the cluster can improve its financial controls and governance framework.

In a report released today, the NSW Auditor-General, Margaret Crawford provides a snapshot of reported fraud in the NSW public sector and an analysis of NSW Government agencies’ fraud controls based on a survey of 102 agencies.