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20 December 2017

Published

Internal Controls and Governance 2017

Finance

Education

Community Services

Health

Justice

Whole of Government

Asset valuation

Compliance

Cyber security

Information technology

Internal controls and governance

Project management

Risk

Agencies need to do more to address risks posed by information technology (IT).

Effective internal controls and governance systems help agencies to operate efficiently and effectively and comply with relevant laws, standards and policies. We assessed how well agencies are implementing these systems, and highlighted opportunities for improvement.

1. Overall trends

New and repeat findings	The number of reported financial and IT control deficiencies has fallen, but many previously reported findings remain unresolved.
High risk findings	Poor systems implementations contributed to the seven high risk internal control deficiencies that could affect agencies.
Common findings	Poor IT controls are the most commonly reported deficiency across agencies, followed by governance issues relating to cyber security, capital projects, continuous disclosure, shared services, ethics and risk management maturity.

2. Information Technology

IT security	Only two-thirds of agencies are complying with their own policies on IT security. Agencies need to tighten user access and password controls.
Cyber security	Agencies do not have a common view on what constitutes a cyber attack, which limits understanding the extent of the cyber security threat.
Other IT systems	Agencies can improve their disaster recovery plans and the change control processes they use when updating IT systems.

3. Asset Management

Capital investment	Agencies report delays delivering against the significant increase in their budgets for capital projects.
Capital projects	Agencies are underspending their capital budgets and some can improve capital project governance.
Asset disposals	Eleven per cent of agencies were required to sell their real property through Property NSW but didn’t. And eight per cent of agencies can improve their asset disposal processes.

4. Governance

Governance arrangements	Sixty-four per cent of agencies’ disclosure policies support communication of key performance information and prompt public reporting of significant issues.
Shared services	Fifty-nine per cent of agencies use shared services, yet 14 per cent do not have service level agreements in place and 20 per cent can strengthen the performance standards they set.

5. Ethics and Conduct

Ethical framework	Agencies can reinforce their ethical frameworks by updating code‑of‑conduct policies and publishing a Statement of Business Ethics.
Conflicts of interest	All agencies we reviewed have a code of conduct, but they can still improve the way they update and manage their codes to reduce the risk of fraud and unethical behaviour.

6. Risk Management

Risk management maturity	All agencies have implemented risk management frameworks, but with varying levels of maturity.
Risk management elements	Many agencies can improve risk registers and strengthen their risk culture, particularly in the way that they report risks to their lead agency.

This report covers the findings and recommendations from our 2016–17 financial audits related to the internal controls and governance of the 39 largest agencies (refer to Appendix three) in the NSW public sector. These agencies represent about 95 per cent of total expenditure for all NSW agencies and were considered to be a large enough group to identify common issues and insights.

The findings in this report should not be used to draw conclusions on the effectiveness of individual agency control environments and governance arrangements. Specific financial reporting, controls and service delivery comments are included in the individual 2017 cluster financial audit reports tabled in Parliament from October to December 2017.

This new report offers strategic insight on the public sector as a whole

In previous years, we have commented on internal control and governance issues in the volumes we published on each ‘cluster’ or agency sector, generally between October and December. To add further value, we then commented more broadly about the issues identified for the public sector as a whole at the start of the following year.

This year, we have created this report dedicated to internal controls and governance. This will help Parliament to understand broad issues affecting the public sector, and help agencies to compare their own performance against that of their peers.

Without strong control measures and governance systems, agencies face increased risks in their financial management and service delivery. If they do not, for example, properly authorise payments or manage conflicts of interest, they are at greater risk of fraud. If they do not have strong information technology (IT) systems, sensitive and trusted information may be at risk of unauthorised access and misuse.

These problems can in turn reduce the efficiency of agency operations, increase their costs and reduce the quality of the services they deliver.

Our audits do not review every control or governance measure every year. We select a range of measures, and report on those that present the most significant risks that agencies should mitigate. This report divides these into the following six areas:

Overall trends
Information technology
Asset management
Governance
Ethics and conduct
Risk management.

Internal controls are processes, policies and procedures that help agencies to:

operate effectively and efficiently
produce reliable financial reports
comply with laws and regulations.

This chapter outlines the overall trends for agency controls and governance issues, including the number of findings, level of risk and the most common deficiencies we found across agencies. The rest of this volume then illustrates this year’s controls and governance findings in more detail.

Issues	Recommendations
1.1 New and repeat findings
The number of internal control deficiencies reduced over the past three years, but new higher-risk information technology (IT) control deficiencies were reported in 2016–17. Deficiencies repeated from previous years still make up a sizeable proportion of all internal control deficiencies.	Recommendation Agencies should focus on emerging IT risks, but also manage new IT risks, reduce existing IT control deficiencies, and address repeat internal control deficiencies on a more timely basis.
1.2 High risk findings
We found seven high risk internal control deficiencies, which might significantly affect agencies.	Recommendation Agencies should rectify high risk internal control deficiencies as a priority
1.3 Common findings
The most common internal control deficiencies related to poor or absent IT controls. We found some common governance deficiencies across multiple agencies.	Recommendation Agencies should coordinate actions and resources to help rectify common IT control and governance deficiencies.

Information technology (IT) has become increasingly important for government agencies’ financial reporting and to deliver their services efficiently and effectively. Our audits reviewed whether agencies have effective controls in place over their IT systems. We found that IT security remains the source of many control weakness in agencies.

Issues

Recommendations

2.1 IT security

User access administration

While 95 per cent of agencies have policies about user access, about two-thirds were compliant with these policies. Agencies can improve how they grant, change and end user access to their systems.

Recommendation

Agencies should strengthen user access administration to prevent inappropriate access to sensitive systems. Agencies should:

establish and enforce clear policies and procedures
review user access regularly
remove user access for terminated staff promptly
change user access for transferred staff promptly.

Privileged access

Sixty-eight per cent of agencies do not adequately manage who can access their information systems, and many do not sufficiently monitor or restrict privileged access.

Recommendation

Agencies should tighten privileged user access to protect their information systems and reduce the risks of data misuse and fraud. Agencies should ensure they:

only grant privileged access in line with the responsibilities of a position
review the level of access regularly
limit privileged access to necessary functions and data
monitor privileged user account activity on a regular basis.

Password controls

Forty-one per cent of agencies did not meet either their own standards or minimum standards for password controls.

Recommendation

Agencies should review and enforce password controls to strengthen security over sensitive systems. As a minimum, password parameters should include:

minimum password lengths and complexity requirements
limits on the number of failed log-in attempts
password history (such as the number of passwords remembered)
maximum and minimum password ages.

2.2 Cyber Security

Cyber security framework

Agencies do not have a common view on what constitutes a cyber attack, which limits understanding the extent of the cyber security threat.

Recommendation

The Department of Finance, Services and Innovation should revisit its existing framework to develop a shared cyber security terminology and strengthen the current reporting requirements for cyber incidents.

Cyber security strategies

While 82 per cent of agencies have dedicated resources to address cyber security, they can strengthen their strategies, expertise and staff awareness.

Recommendations

The Department of Finance, Services and Innovation should:

mandate minimum standards and require agencies to regularly assess and report on how well they mitigate cyber security risks against these standards
develop a framework that provides for cyber security training.

Agencies should ensure they adequately resource staff dedicated to cyber security.

2.3 Other IT systems

Change control processes

Some agencies need to improve change control processes to avoid unauthorised or inaccurate system changes.

Recommendation

Agencies should consistently perform user acceptance testing before system upgrades and changes. They should also properly approve and document changes to IT systems.

Disaster recovery planning

Agencies can do more to adequately assess critical business systems to enforce effective disaster recovery plans. This includes reviewing and testing their plans on a timely basis.

Recommendation

Agencies should complete business impact analyses to strengthen disaster recovery plans, then regularly test and update their plans.

Agency service delivery relies on developing and renewing infrastructure assets such as schools, hospitals, roads, or public housing. Agencies are currently investing significantly in new assets. Agencies need to manage the scale and volume of current capital projects in order to deliver new infrastructure on time, on budget and realise the intended benefits. We found agencies can improve how they:

manage their major capital projects
dispose of existing assets.

Issues

Recommendations or conclusions

3.1 Capital investment

Capital asset investment ratios

Most agencies report high capital investment ratios, but one-third of agencies’ capital investment ratios are less than one.

Recommendation

Agencies with high capital asset investment ratios should ensure their project management and delivery functions have the capacity to deliver their current and forward work programs.

Volume of capital spending

Most agencies have significant forward spending commitments for capital projects. However, agencies’ actual capital expenditure has been below budget for the last three years.

Conclusion

The significant increase in capital budget underspends warrant investigation, particularly where this has resulted from slower than expected delivery of projects from previous years.

3.2 Capital projects

Major capital projects

Agencies’ major capital projects were underspent by 13 percent against their budgets.

Conclusion

The causes of agency budget underspends warrant investigation to ensure the NSW Government’s infrastructure commitment is delivered on time.

Capital project governance

Agencies do not consistently prepare business cases or use project steering committees to oversee major capital projects.

Conclusion

Agencies that have project management processes that include robust business cases and regular updates to their steering committees (or equivalent) are better able to provide those projects with strategic direction and oversight.

3.3. Asset disposals

Asset disposal procedures

Agencies need to strengthen their asset disposal procedures.

Recommendations

Agencies should have formal processes for disposing of surplus properties.

Agencies should use Property NSW to manage real property sales unless, as in the case for State owned corporations, they have been granted an exemption.

Governance refers to the high-level frameworks, processes and behaviours that help an organisation to achieve its objectives, comply with legal and other requirements, and meet a high standard of probity, accountability and transparency.

This chapter sets out the governance lighthouse model the Audit Office developed to help agencies reach best practice. It then focuses on two key areas: continuous disclosure and shared services arrangements. The following two chapters look at findings related to ethics and risk management.

Issues

Recommendations or conclusions

4.1 Governance arrangements

Continuous disclosure

Continuous disclosure promotes improved performance and public trust and aides better decision-making. Continuous disclosure is only mandatory for NSW Government Businesses such as State owned corporations.

Conclusion

Some agencies promote transparency and accountability by publishing on their websites a continuous disclosure policy that provides for, and encourages:

regular public disclosure of key performance information
disclosure of both positive and negative information
prompt reporting of significant issues.

4.2 Shared services

Service level agreements

Some agencies do not have service level agreements for their shared service arrangements.

Many of the agreements that do exist do not adequately specify controls, performance or reporting requirements. This reduces the effectiveness of shared services arrangements.

Conclusion

Agencies are better able to manage the quality and timeliness of shared service arrangements where they have a service level agreement in place. Ideally, the terms of service should be agreed before services are transferred to the service provider and:

specify the controls a provider must maintain
specify key performance targets
include penalties for non-compliance.

Shared service performance

Some agencies do not set performance standards for their shared service providers or regularly review performance results.

Conclusion

Agencies can achieve better results from shared service arrangements when they regularly monitor the performance of shared service providers using key measures for the benefits realised, costs saved and quality of services received.

Before agencies extend or renegotiate a contract, they should comprehensively assess the services received and test the market to maximise value for money.

All government sector employees must demonstrate the highest levels of ethical conduct, in line with standards set by The Code of Ethics and Conduct for NSW government sector employees.

This chapter looks at how well agencies are managing these requirements, and where they can improve their policies and processes.

We found that agencies mostly have the appropriate codes, frameworks and policies in place. But we have highlighted opportunities to improve the way they manage those systems to reduce the risks of unethical conduct.

Issues

Recommendations or conclusions

5.1 Ethical framework

Code of conduct

All agencies we reviewed have a code of conduct, but they can still improve the way they update and manage their codes to reduce the risk of fraud and unethical behaviour.

Recommendation

Agencies should regularly review their code-of-conduct policies and ensure they keep their codes of conduct up-to-date.

Statement of business ethics

Most agencies maintain an ethical framework, but some can enhance their related processes, particularly when dealing with external clients, customers, suppliers and contractors.

Conclusion

Agencies can enhance their ethical frameworks by publishing a Statement of Business Ethics, which communicates their values and culture.

5.2 Potential conflicts of interest

Conflicts of interest

All agencies have a conflicts-of-interest policy, but most can improve how they identify, manage and avoid conflicts of interest.

Recommendation

Agencies should improve the way they manage conflicts of interest, particularly by:

requiring senior executives to make a conflict-of-interest declaration at least annually
implementing processes to identify and address outstanding declarations
providing annual training to staff
maintaining current registers of conflicts of interest.

Gifts and benefits

While all agencies already have a formal gifts-and-benefits policy, we found gaps in the management of gifts and benefits by some that increase the risk of unethical conduct.

Recommendation

Agencies should improve the way they manage gifts and benefits by promptly updating registers and providing annual training to staff.

Risk management is an integral part of effective corporate governance. It helps agencies to identify, assess and prioritise the risks they face and in turn minimise, monitor and control the impact of unforeseen events. It also means agencies can respond to opportunities that may emerge and improve their services and activities.

This year we looked at the overall maturity of the risk management frameworks that agencies use, along with two important risk management elements: risk culture and risk registers.

Issues

Recommendations or conclusions

6.1 Risk management maturity

All agencies have implemented risk management frameworks, but with varying levels of maturity in their application.

Agencies’ averaged a score of 3.1 out of five across five critical assessment criteria for risk management. While strategy and governance fared best, the areas that most need to improve are risk culture, and systems and intelligence.

Conclusion

Agencies have introduced risk management frameworks and practices as required by the Treasury’s:

'Risk Management Toolkit for the NSW Public Sector'
'Internal Audit and Risk Management Policy for the NSW Public Sector'.

However, more can be done to progress risk management maturity and embed risk management in agency culture.

6.2 Risk management elements

Risk culture

Most agencies have started to embed risk management into the culture of their organisation. But only some have successfully done so, and most agencies can improve their risk culture.

Conclusion

Agencies can improve their risk culture by:

setting an appropriate tone from the top
training all staff in effective risk management
ensuring desired risk behaviours and culture are supported, monitored, and reinforced through business plans, or the equivalent and employees' performance assessments.

Risk registers and reporting

Some agencies do not report their significant risks to their lead agency, which may impair the way resources are allocated in their cluster. Some agencies do not integrate risk registers at a divisional and whole-of-enterprise level.

Conclusion

Agencies not reporting significant risks at the cluster level increases the likelihood that significant risks are not being mitigated appropriately.

Effective risk management can improve agency decision-making, protect reputations and lead to significant efficiencies and cost savings. By embedding risk management directly into their operations, agencies can also derive extra value for their activities and services.

19 December 2017

Published

Planning and Environment 2017

Planning

Environment

Asset valuation

Information technology

Internal controls and governance

Management and administration

Project management

The following report highlights results of financial audits of agencies in the Planning and Environment cluster. The report focuses on key observations and findings from the most recent audits of these agencies.

The audits were completed for most agencies in the cluster and unqualified audit opinions issued. Issues identified during the financial statement audits of seven small agencies delayed their finalisation beyond the statutory deadline, and six of these remain incomplete. Apart from these small agencies, the quality of financial reporting across the cluster remained at a high standard.

1. Financial reporting and controls

Financial reporting	Unqualified audit opinions were issued for 39 of the 45 cluster agencies. Issues identified during the financial statement audits of seven small agencies delayed their finalisation beyond the statutory deadline. Six of these audits remain incomplete at the date of this report.
	Agencies completed early close procedures mandated by the Treasury. We noted opportunities for agencies to improve the effectiveness of these procedures.
Internal Controls	One in six internal control weaknesses identified during the financial audits were repeat issues. Agencies should action audit recommendations promptly.
	User administration over financial systems needs to be strengthened to prevent inappropriate access to financial information.

2. Service Delivery

Housing completions	Australian Bureau of Statistics data indicates the Department of Planning and Environment achieved the Premier's priority for housing completions in 2016–17.
Increasing housing supply	Australian Bureau of Statistics data shows the Department of Planning and Environment achieved the annual target of delivering over 50,000 housing approvals over the past three years.
Major project assessment	Progress against the State priority target to reduce time taken to assess planning applications for State significant developments is difficult to determine as the measure is unclear.
Litter management	The Environment Protection Authority's data indicates that progress towards the Premier's priority target for litter reduction slowed in 2016–17.
Cultural participation	The Department of Planning and Environment’s data indicates overall attendance at cultural venues and events in New South Wales increased by 16 per cent in 2015–16.

This report provides Parliament and others with the audit results, observations and recommendations for Planning and Environment cluster agencies. The report has been structured into two chapters focussing on financial reporting and controls and service delivery.

The Planning and Environment cluster plays a role in ensuring each community across New South Wales receives the services and infrastructure it needs.

This chapter outlines our audit observations and recommendations related to financial reporting and controls of Planning and Environment cluster agencies for 2016–17.

Observation	Conclusion or recommendation
2.1 Quality of financial reporting
Unqualified audit opinions were issued for 39 of the 45 cluster agencies' financial statements.	Issues identified during the financial statement audits of seven smaller agencies delayed their completion. Six audits remain incomplete at the date of this report. Apart from these seven small agency audits, the quality of financial reporting across the cluster remained at a high standard.
2.2 Timeliness of financial reporting
Seven agencies' financial statement audits were not completed by the statutory deadline with six audits incomplete at the date of this report.	Issues identified during the financial statement audits of seven smaller agencies delayed their finalisation beyond the statutory deadline. These agencies would benefit from performing additional early close procedures in future reporting periods.
2.3 Financial and sustainability analysis
Water and Electricity utility agencies continue to operate with low liquidity ratios.	A liquidity ratio below one is an indicator that an entity may not be able to pay its debts as and when they fall due. Whilst liquidity ratios were below one, utility agencies demonstrated they can continue to support ongoing operations due to: access to regulated revenue streams assets with long useful lives to generate revenue debt funding limits approved by the NSW Treasurer under the Public Authorities (Financial Arrangements) Act 1987.
2.5 Internal controls
One in six internal control weaknesses reported in 2016–17 were repeat issues.	Delays in implementing audit recommendations can prolong the risk of fraud and error. Recommendation (repeat issue): anagement letter recommendations to address internal control weaknesses should be actioned promptly, with a focus on addressing repeat issues.
Nine of these internal control weaknesses related to the creation, modification, deletion and review of user access to financial systems.	These control weaknesses may compromise the integrity and security of financial data. Recommendation (repeat issue): Management of user administration over financial systems should be strengthened to prevent inappropriate access to financial information.

This chapter outlines our audit observations, conclusions and recommendations relating to service delivery for 2016–17.

Observation	Conclusion or recommendation
3.1 Premier's and State priorities
The Planning and Environment cluster is responsible for delivering five Premier's and State priorities.	One priority target was achieved in 2016–17, two targets are on track to be achieved and progress towards one target slowed. Progress against one target cannot be determined.
3.2 Planning
Housing Completion
There were 63,506 housing completions in 2016–17. This was 4.1 per cent above the Premier’s priority target of delivering 61,000 housing completions per year.	The Australian Bureau of Statistics data shows the housing completions target was achieved in 2016–17.
Housing supply
The number of approvals for new houses in 2016–17 was 72,472 against the State priority target of more than 50,000 approvals per year.	The Australian Bureau of Statistics data indicates the housing approvals target was achieved in 2016–17.
Major project assessment
State significant developments are not clearly defined for the purposes of reporting against the State priority target.	The Department of Planning and Environment will clarify with the Department of Premier and Cabinet which developments are captured by the State priority target.
The Department of Planning and Environment’s data shows the time taken to assess complex State significant developments increased by 16 per cent in 2016–17 while the time taken to assess less complex developments reduced by 20 per cent.	The Department of Planning and Environment considers it is on track to meet the State priority target of halving the time taken to assess State significant developments, despite uncertainty over the target measure.
Housing acceleration fund
Program business cases were not developed for projects in Housing Acceleration Fund Rounds 1 to 4. The Department advised a program business case will be developed for Housing Acceleration Fund Round 5 projects.	A program business case is necessary to ensure related projects are evaluated, managed and coordinated effectively.
A benefit realisation review process has not yet been approved for Housing Acceleration Fund projects. The Department of Planning and Environment advised it is developing a benefit realisation review process.	A benefit realisation review process is necessary to determine whether funded projects achieved intended outcomes.
Greater Sydney Commission
The Greater Sydney Commission forecasts a further 725,000 dwellings in the greater Sydney region will be required up to 2036 to meet housing demand.	In response to population growth, the Commission has set a five-year housing supply target of 189,100 houses across the five Greater Sydney Commission districts.
ePlanning system
The Department of Planning and Environment did not perform a benefit realisation review for phase one of the ePlanning project. It has committed to performing a benefit realisation review after completion of phase two in 2018.	It cannot be determined if phase one of the project delivered expected outcomes as a benefit realisation review was not performed.
3.3. Environment and Heritage
Litter volume in New South Wales was 6.6 litres per 1,000 square metres in 2016–17, an increase of 16 per cent from the prior year. This is above the Premier's priority litter volume target of 4.2 litres per 1,000 square metres by 2020.	The Environment Protection Authority's data indicates the progress towards the target of reducing the volume of litter by 40 per cent by 2020 has slowed.
The NSW Government plans to invest $240 million to facilitate strategic biodiversity conservation on private land.	Performance measures have not yet been developed for the private land conservation program.
3.4 Water
IPART reduced water usage charges for most Sydney Water Corporation customers in 2016–17.	Water usage prices in New South Wales compare favourably to larger water utilities in other jurisdictions.
Hunter Water Corporation's water recycling and water conservation performance has been stable over recent years. The volume of Sydney Water Corporation’s recycled water reduced by 12 per cent in 2016–17 compared to the previous year.	Sydney Water Corporation experienced reduced industry demand for recycled water. Several large industrial customers relocated away from Sydney.
3.5 Arts and culture
A State priority target is to increase overall attendance at cultural venues and events in New South Wales by 15 per cent from 2014–15 levels by 2019.	The Department of Planning and Environment's data indicates overall attendance increased by 16 per cent in 2015–16, although attendance fluctuated across individual venues and events. This indicates progress towards achieving the overall target by 2019.

Appendix one - List of 2017 recommendations

Appendix two - Status of 2016 recommendations

Appendix three - Agencies selected for this volume

Appendix four - Financial audit reporting

Appendix five - Timeliness of financial reporting

Appendix six - Financial indicators

13 December 2017

Published

Managing demand for ambulance services 2017

Health

Information technology

Management and administration

Risk

Service delivery

Shared services and collaboration

Workforce and capability

NSW Ambulance has introduced several initiatives over the past decade to better manage the number of unnecessary ambulance responses and transports to hospital emergency departments. However, there is no overall strategy to guide the development of these initiatives nor do NSW Ambulance's data systems properly monitor their impact. As a result, the Audit Office was unable to assess whether NSW Ambulance's approach to managing demand is improving the efficiency of ambulance services.

Demand for ambulance services is increasing. Demographic factors including population growth and ageing have contributed to this and ongoing growth in demand is likely. It is important that NSW Ambulance finds ways to respond to this demand more efficiently, while maintaining patient safety standards and meeting community expectations.

Most triple zero calls to NSW Ambulance do not involve medical issues that require an emergency response. NSW Ambulance has introduced a range of initiatives to change the way it manages these less urgent requests for assistance. Its major demand management initiatives include using a telephone advice line, referring some patients to services other than hospital emergency departments and using specialist paramedics to respond to less urgent cases.

The role of NSW Ambulance has changed in recent years. It is aiming to become a ‘mobile health service’ that identifies the needs of patients and provides or refers them to the most appropriate type of care. This change involves a significant expansion of the clinical decision-making role of paramedics. Considerable strategic and organisational efforts are required to make this work. The successful implementation of demand management initiatives is important to NSW Ambulance's ability to continue to meet demand for its services.

This audit assessed NSW Ambulance's major demand management initiatives that aim to reduce unnecessary demand for ambulance responses and unnecessary transport to hospital emergency departments. It aimed to assess the extent to which these initiatives have improved the efficiency of its services.

Conclusion

NSW Ambulance has introduced several initiatives that aim to manage demand for its services from less urgent cases more efficiently. There is no overall strategy for these initiatives and NSW Ambulance’s data systems do not measure their outputs or outcomes. As a result, we are unable to assess the impact of NSW Ambulance's demand management initiatives on the efficiency of ambulance services. More focus is needed to ensure these initiatives achieve the efficiency improvements necessary to help NSW Ambulance meet future increases in demand.

Increasing demand for ambulance services is a key issue for NSW Ambulance. Demand has increased at a faster rate than population growth in recent years and continued growth is expected. NSW Ambulance has introduced several initiatives that aim to manage demand for its services from people with less urgent medical issues more efficiently and align its approach with the rest of the health system in New South Wales.

These individual initiatives lack a broader strategy to guide their development. NSW Ambulance’s demand management initiatives also lack clear goals and performance targets, with insufficient organisational resources allocated to support their implementation. NSW Ambulance does not have a data system that allows it to conduct accurate routine monitoring of the activity and performance of these initiatives.

More effort is required to make demand management initiatives a core part of NSW Ambulance's work. Key relationships with other health services to support demand management initiatives have only recently been established. NSW Ambulance has not communicated proactively with the public about its demand management initiatives. To ensure paramedics are as well prepared as possible for their expanded roles, they need better professional development and up to date technology.

Demand for ambulance services in New South Wales is increasing steadily. Forecast future increases in demand due to population growth and ageing mean that NSW Ambulance must improve its efficiency to maintain its performance.

Demand for ambulance services is growing at a rate higher than population growth. The increase in demand is likely to continue as the population continues to grow and age. NSW Ambulance has made several recent changes to remove large parts of demand for its services, including moving non-emergency patient transport to a separate government agency and changing the way triple zero calls are categorised.

These changes were expected to improve emergency response time performance, but the anticipated improvements have not been achieved. If demand continues to increase as forecast, NSW Ambulance will need to find more efficient ways to manage demand to maintain its performance.

NSW Ambulance has introduced initiatives to change the way it manages demand from patients who have less urgent medical issues. These have the potential to achieve positive results, but we were unable to fully assess their impact because of weaknesses in data systems and monitoring. More needs to be done to demonstrate progress toward the efficiency improvements required.

NSW Ambulance uses a telephone referral system to manage triple zero calls from people with medical issues that do not require an ambulance. This has the potential to achieve efficiency improvements but there are weaknesses in NSW Ambulance's use and monitoring of this system. Paramedics are now able to make decisions about whether patients need transport to a hospital emergency department. NSW Ambulance does not routinely measure or monitor the decisions paramedics make, so it does not know whether these decisions are improving efficiency. Extended Care Paramedics who have additional skills in diagnosing and treating patients with less urgent medical issues were introduced in 2007. NSW Ambulance analysis indicates that these paramedics have the potential to improve efficiency, but have not been used as effectively as possible.

Our 2013 audit of NSW Ambulance found that accurate monitoring of activity and performance was not being conducted. More than four years later, this remains the case.

NSW Ambulance has recognised the need to change the way it manages demand and has developed initiatives that have the potential to improve efficiency. However, there are significant weaknesses in the strategy for and implementation of its demand management initiatives.

NSW Ambulance has identified the goal of moving from an emergency transport provider to a mobile health service and developed several initiatives to support this. Its demand management initiatives have the potential to contribute to the broader policy directions for the health system in New South Wales. However, there is no clear overall strategy guiding these initiatives and their implementation has been poor.

NSW Ambulance's reasons for changing its approach to demand management have not been communicated proactively to the community. Demand management initiatives that have been operating for over a decade still do not have clear performance measures or targets. Project management of new initiatives has been inadequate, with insufficient organisational resources to oversee them and inadequate engagement with other healthcare providers.

NSW Ambulance uses an in-house Vocational Education and Training course to recruit some paramedics, as well as recruiting paramedics who have completed a university degree. No other Australian ambulance services continue to provide their own Vocational Education and Training qualifications. Paramedics will need more support in several key areas to be able to fulfil their expanded roles in providing a mobile health service. Performance and development systems for paramedics are not used effectively. Up to date technology would help paramedics make better decisions and improve NSW Ambulance's ability to monitor demand management activity.

There are gaps in NSW Ambulance's oversight of the risks of some of the initiatives it has introduced, particularly its lack of information on the outcomes for patients who are not transported to hospital. Weaknesses in the way NSW Ambulance uses its data limit its ability to properly assess the risks of the demand management initiatives it has introduced.

Parliamentary reference - Report number #295 - released 13 December 2017

5 December 2017

Published

Health 2017

Health

Asset valuation

Compliance

Financial reporting

Fraud

Information technology

Internal controls and governance

Management and administration

Procurement

Project management

The following report highlights results of the financial audits of entities in the NSW health cluster. The report focuses on key observations and findings from the most recent audits of these entities.

The report also includes a range of findings on service delivery. Overall, NSW Health is achieving most of their targets. Some local health districts are continuing to experience increased demand for their services and are finding it more difficult to meet their targets. For example, three local health districts had not achieved some emergency department response time targets for three consecutive years.

1. Financial reporting and controls

Financial Reporting	All health cluster entities received unqualified audit opinions and the quality of financial reporting remains high across the cluster. Early close procedures were largely completed and all financial statements were submitted by the deadlines.
Financial performance	Overall, NSW Health recorded an operating surplus of $407 million in 2016–17. Eleven local health districts/specialty networks recorded operating deficits in 2016–17, four more than 2015–16. Expenses across NSW Health increased by 4.4 per cent in 2016–17 (6.0 per cent in 2015–16), lower than the expected long term annual expense growth rate.
Excess annual leave	Managing excess annual leave is a continual challenge for NSW Health, with thirty–five per cent of the workforce having excess balances.
Overtime payments	NSW Health entities are generally managing overtime well; however NSW Ambulance’s overtime payments, $74.6 million in 2016–17, remain significantly higher than other health entities.
Time and leave recording practices	Unapproved employee timesheets continue to be a problem for health entities. Weak timesheet approval controls increase the risk of staff claiming and being paid for hours they have not worked. There is also an increased risk of high volumes of roster adjustments, manual pays, salary overpayments and leave not being recorded accurately.

2. Service Delivery

Service Agreements	Most of the service agreements between the Secretary of NSW Health and health entities were signed earlier than prior years.
Performance monitoring	Five NSW Health entities are not meeting the Ministry of Health’s performance expectations at 30 June 2017.
Emergency department performance	Data provided by the Ministry indicates NSW Health, on average, met emergency department triage response time targets across all triage categories for the fourth consecutive year.
Ambulance response times	Data provided by the Ministry shows NSW Ambulance response times for imminently life‑threatening incidents of 7.5 minutes in 2016–17 was within the Ministry’s target of 10.0 minutes. Data provided by the Ministry indicates NSW Ambulance response times for potentially life‑threatening incidents did not improve in 2016–17. The median response time of 11.1 minutes in 2016–17 was similar to 2015–16 (11.0 minutes). This is despite the number of Priority 1 responses reducing by 4.3 per cent.
Unplanned hospital re-admissions	Data provided by the Ministry shows eight local health districts achieved the Ministry of Health’s unplanned hospital re‑admissions target in 2016–17. The target is for local health districts to reduce re‑admission rates from the previous financial year.

This report sets out the results of the 30 June 2017 financial statement audits of Health cluster entities.

The report has been structured into two chapters focusing on:

Financial reporting and controls
Service delivery.

This chapter outlines audit observations, conclusions and recommendations related to financial reporting and internal controls of entities for 2016-17.

Observation	Conclusion or recommendation
2.1 Quality of financial reporting
All cluster entities received unqualified audit opinions and misstatements identified in financial statements fell.	The quality of financial reporting remains high across the cluster.
2.2 Timeliness of financial reporting
Early close procedures were largely completed and all financial statements were submitted by the deadlines.	Health entities controlled by the Ministry of Health continued submitting their financial statements well ahead of the statutory deadlines.
2.4 Financial and sustainability analysis
NSW Health recorded an operating surplus of $407 million in 2016–17. Eleven local health districts/specialty networks recorded operating deficits in 2016–17, four more than 2015–16. Expenses across NSW Health increased by 4.4 per cent in 2016–17 (6.0 per cent in 2015–16). The capital replacement ratio of local health districts/specialty networks ranged from 0.5 to 5.7 in 2016–17. Seven local health districts had capital replacement ratio higher than one.	The statewide operating surplus was $84 million higher than 2015–16. Net surpluses contribute to NSW Health’s ability to invest in new facilities, upgrades and redevelopments. The 2016–17 financial results were once again impacted by the NSW Government initiative to improve cash management across the sector. The expense growth rate for NSW Health is 1.6 percentage points lower than the expected long term annual expense growth rate. Substantial ongoing investment in hospitals and other assets across NSW Health is evidenced by high capital replacement ratios for some health entities in 2016–17.
2.5 Performance against budget
Ten local health districts/specialty networks’ expense budget variance was outside performance expectations agreed with the Ministry at the beginning of 2016–17.	The Ministry continues to manage performance across NSW Health to improve the accuracy of budgeting practices.
2.7 Human Resources
Thirty-five per cent of NSW Health’s workforce have excess annual leave balances. NSW Ambulance had the highest average sick leave rate in NSW Health of 85.2 hours per FTE in 2016–17 (78.7 hours in 2015–16). This was higher than the statewide average of 62.1 hours (62.0 hours in 2015–16). NSW Ambulance’s overtime payments in 2016–17 totalled $74.6 million; $2.8 million more than 2015–16 and significantly higher than other health entities Other NSW Health entities are generally managing overtime well. Unapproved employee timesheets continue to be a problem for health entities. Weak timesheet approval controls increase the risk of staff claiming and being paid for hours they have not worked.	Managing excess annual leave is a continual challenge for health entities. Recommendation: Health entities should further review the approach to managing excess annual leave in 2017–18. They should: monitor current and projected leave balances to the end of the financial year on a monthly basis agree formal leave plans with employees to reduce leave balances over an acceptable timeframe. NSW Ambulance continues to face significant challenges in managing sick leave. Recommendation: NSW Ambulance should further implement and monitor targeted human resource strategies to address the high rates of sick leave taken Recommendation: NSW Ambulance should further review the effectiveness of its rostering practices to identify strategies to reduce excessive overtime payments. Recommendation: Health entities should conduct a risk‑based review of time and leave recording practices to ensure control weaknesses are identified and fixed.

This chapter outlines our audit observations, conclusions and recommendations relating to service delivery for 2016–17.

Observation	Conclusion or recommendation
3.1 Service agreements in NSW Health
Most of the service agreements between the Secretary of NSW Health and health entities were signed earlier than prior years. Thirteen local health districts/specialty networks signed their service agreements by the 31 July 2017 due date. This is a significant improvement with only seven local health districts/specialty networks meeting the date in 2015–16.	Having service agreements signed as close as possible to the start of each year provides the Ministry and NSW Health entities with clarity around roles, responsibilities, performance measures, budgets, and service volumes and levels.
3.2 Performance of NSW Health entities
Five NSW Health entities were not meeting the Ministry’s performance expectations at 30 June 2017.	The Ministry is managing the five entities in accordance with its performance review process.
3.4 Emergency department response times
Data provided by the Ministry indicates NSW Health again, on average, met emergency department triage response time targets across all triage categories for the fourth consecutive year. The Ministry manages performance across NSW Health to ensure patients presenting at emergency departments receive care in a clinically appropriate timeframe.	Based on the Ministry’s data, local health districts/specialty networks are, on average, meeting triage targets despite increasing emergency department attendances. The data shows eleven local health districts met all triage targets in 2016–17, compared to eight in 2015–16.
3.5 Emergency treatment performance
The Ministry manages public patient access to emergency services in public hospitals. It has an emergency treatment performance target of 81 per cent of patients leaving emergency departments within four hours.	Data provided by the Ministry indicates NSW Health maintained its overall emergency treatment performance in 2016–17, but did not achieve its target. The State average emergency treatment performance was 74.2 per cent (74.2 per cent in 2015–16). Based on the Ministry’s data, only four local health districts achieved the target in 2016–17, five in 2015–16.
3.6 Ambulance response times
NSW Ambulance has a response time target of 10.0 minutes for imminently life‑threatening incidents in New South Wales.	Data provided by the Ministry indicates NSW Ambulance response times for imminently life-threatening incidents of 7.5 minutes in 2016–17 was within the Ministry’s target.
3.7 Transfer of care
The Ministry has a target of 90 per cent for the number of ambulance arrivals within a 30 minute ‘transfer of care’ timeframe.	Data provided by the Ministry indicates the rate of ambulance arrivals within a 30 minute 'transfer of care' timeframe improved from 87.6 per cent in 2015–16 to 91.7 per cent in 2016–17, exceeding the Ministry’s target.
3.8 Average length of stay in hospital
Based on the Ministry’s 2016–17 data, the average length of stay for acute episodes was 3.0 days. The average length of stay in New South Wales hospitals is lower than the national average of 3.2 days (in 2015–16).	The Ministry’s data shows the average length of stay by patients for acute episodes has remained stable in New South Wales hospitals for four years.
3.9 Elective surgery access performance
Data provided by the Ministry indicates NSW Health continues to manage waiting times for elective surgery in public hospitals.	The Ministry’s data shows NSW Health improved on‑time admission of patients for elective surgery in 2016–17 despite a 1.8 per cent increase in admissions. While the result improved, only one of the three targets for elective surgery waiting times was met in 2016–17.
3.10 Unplanned hospital re-admissions
Data provided by the Ministry indicates NSW Health, on average, did not reduce the rate of unplanned hospital re‑admissions in 2016–17. The Ministry has a target of reducing unplanned hospital re‑admissions compared to the previous financial year. Low re‑admission rates may indicate good patient management practices and post-discharge care.	The Ministry’s data shows eight local health district met the target to reduce the rate of re‑admissions compared to the previous financial year. The statewide average rate increased from 6.3 per cent to 6.4 per cent.
3.11 Post discharge care for acute mental health patients
NSW Health has a goal to increase community-based care to acute mental health patients after they are discharged. Continuity of care in the community can lead to reduced symptom severity, lower re‑admission rates, and improved quality of life.	The Ministry’s 2016–17 data shows the statewide average for post discharge follow-up of acute mental health patients within seven days was 70.0 per cent (66.0 per cent in 2015–16). The statewide average improved and met the NSW Health target of 70 per cent. Nine local health districts exceeded the NSW Health target.
3.12 Mental health acute re-admissions
NSW Health has a goal to reduce acute public sector mental health re-admissions. High re‑admission rates may indicate deficiencies in inpatient treatment and follow up care.	The Ministry’s data shows twelve local health districts did not achieve the NSW Health target of 13 per cent mental health acute re‑admissions in 2016–17.
3.13 Unplanned and emergency re‑presentations
NSW Health aims to reduce the number of unplanned and emergency re‑presentations to emergency departments. The Ministry’s 2016–17 data shows the State average of emergency department re‑presentations decreased marginally from 5.0 per cent in 2015–16 to 4.9 per cent.	Patients attending rural emergency departments are more likely to re‑present within 48 hours of being discharged than those in regional or metropolitan emergency departments.
3.14 Healthcare associated infection
The national target for the rate of Staphylococcus aureus (golden staph) bloodstream infection is two cases per 10,000 bed days.	Data provided by the Ministry indicates the rate of golden staph bloodstream infection in New South Wales hospitals continues to be well below the target and national benchmark at 0.72 cases per 10,000 bed days in 2016–17 (0.75 in 2015–16).
3.15 Patient experience and satisfaction
The Bureau of Health Information analyses and reports on the results of patient surveys. The Bureau’s survey shows 65 per cent of adult admitted patients rated the care they received in hospital as ‘very good’ and 29 per cent rated it as ‘good’.	NSW Health recognises that patient surveys are an important feedback mechanism on the health care system that can only come from personal experiences.

Appendix one - List of 2017 recommendations

Appendix two - Status of 2016 recommendations

Appendix three - Timeliness of financial and audit reporting

Appendix four - Financial indicators

Appendix five - Agencies selected for this report

Appendix six - Financial information

Appendix seven - Performance information

23 November 2017

Published

Agency compliance with NSW Government travel policies

Education

Community Services

Finance

Health

Industry

Justice

Local Government

Planning

Premier and Cabinet

Transport

Treasury

Universities

Whole of Government

Compliance

Internal controls and governance

Procurement

Overall, agencies materially complied with NSW Government travel policies.

However, the Auditor-General found some agencies:

did not always book official travel through the approved supplier
had weaknesses in their travel approval processes
had travel policies that were inconsistent with the NSW Government policy
did not adequately manage their travel records.

Last year the NSW Government spent almost $250 million on travel. The government’s travel policies aim to help agencies make better travel decisions and reduce costs. The Department of Finance, Services and Innovation (DFSI) is responsible for the government’s travel policy and manages the government contract with an approved private sector provider to procure travel services.

This audit assessed how effective agency processes were to ensure compliance with:

the ‘Policy on Official Travel within Australia and Overseas’ issued by the Department of Premier and Cabinet in Circular OFS-2014–07 ‘Official Travel in Australia and Overseas’ (the former policy)
the ‘NSW Government Travel and Transport Policy’ issued by DFSI (the new policy), effective from 28 September 2016.

We examined 15 agencies from different NSW Government clusters with significant travel expenditure. For a list of participating agencies, refer to the Appendix two.

Conclusion

We found that overall, agencies materially complied with NSW Government travel policies. However, some agencies:

did not always book official travel through the approved supplier
had weaknesses in their travel approval processes
had travel policies that were inconsistent with the government policy
did not adequately manage their travel records.

Self-assessments indicate agencies comply with most aspects of the new policy. Agencies also believe more guidance from DFSI about certain aspects of the policy would increase compliance.

We asked the 15 participating agencies to complete a self assessment of the processes they have implemented to comply with the new policy. The key observations are summarised below.

Appendix one - Responses from agencies

Appendix two - List of selected agencies

19 September 2017

Published

Energy rebates for low income households

Planning

Industry

Compliance

Fraud

Internal controls and governance

Management and administration

The Department of Planning and Environment provides more than $245 million in energy rebates to around 27 percent of NSW households. This report highlights that the department is not monitoring the rebate schemes to understand whether they are delivering the best outcomes.

Most rebates are ongoing payments applied directly to energy bills reducing the amount payable by the householder. The structure of these rebates is complex and can be inequitable. Some households are eligible for four different rebates, each with its own eligibility criteria. Also, some households in very similar circumstances receive different levels of support depending on what type of energy is used in their home or which adult in the house is the energy account holder. For example, a household using both electricity and gas receives more assistance than a household with electricity alone even if total energy bills are the same.

The Department of Planning and Environment (Department) administers five energy rebate schemes targeted to low-income households. The five rebates are of two key types:

1. Ongoing support to pay energy bills
2. Crisis Support

More than one million rebates are paid each year to over 800,000, or around 27 per cent, of NSW households. Households learn about rebates from a variety of sources including: Service NSW, government and energy retailer websites, energy retailer welcome packs, Department marketing efforts, information on energy bills, and Centrelink.

The budget for energy rebates is increasing every year and in 2017–18 is more than $245 million. The Department delivers most rebates through a network of partnership arrangements with:

energy retailers, who apply rebates directly onto energy bills
more than 340 charities and other NGOs who assess households' eligibility for crisis support and distribute support through the Energy Accounts Payment Assistance scheme (EAPA)
Service NSW, who informs NSW households about rebates through their call centre.

The energy rebates budget is substantial and the distribution arrangements are complex. The objective of the audit was to assess whether the current design and distribution of energy rebates schemes is effective.

Conclusion

The Department administers the rebate schemes using partners to ensure funds are directed towards energy bills as intended. Ongoing support schemes provide assistance to low-income households as intended, but have no measurable objectives or outcome measures and therefore can't be assessed for their effectiveness. Crisis support (EAPA) has a clear objective, to keep households experiencing financial crisis connected to energy services, but the Department does not monitor the performance of EAPA against this objective.

The structure of rebates providing ongoing support is complex and can be inequitable for some households. Reducing the number of separate schemes and simplifying eligibility requirements offers the most scope for improving effectiveness of ongoing support schemes.

The growth of embedded networks¹ represents a future administrative risk to the Department.

Partnering with energy retailers, charities and NGOs delivers advantages, but stronger oversight is required over partner organisations.

The Department and partner organisations administer the rebate schemes as designed

The Department oversees a complex package of rebate schemes in partnership with 25 retailers and around 340 charities and NGOs. The partnership arrangements ensure that funds are distributed directly to energy bills as intended. The schemes provide support to recipients and are administered in line with government decisions about eligibility.

Communication about rebates does not reach all eligible households

Households learn about rebate schemes through a mix of communication channels including retailer websites and call centres, Department websites, Centrelink, financial counsellors, EAPA Providers, the Energy and Water Ombudsman and Service NSW. Some low-income groups, such as those with poor English language skills, do not find out about energy rebates.

Scheme objectives are not measurable

Rebate schemes that provide ongoing support do not have measurable objectives or outcome measures. Without clear and measurable objectives, the Department cannot report to government on whether the schemes are achieving the intended policy outcomes, nor recommend improvements to ensure the schemes deliver the greatest benefit to the most financially vulnerable households.

The EAPA crisis support scheme has a clearer objective in that it aims to keep households experiencing financial crisis connected to energy services. However, the Department does not measure outcomes from providing this type of support, and does not know if the crisis support achieves this objective.

The structure of rebate schemes for ongoing support is complex

The Low Income Household Rebate accounts for 80 per cent of the budget for ongoing support rebates. The remaining 20 per cent of the budget is administered through four separate schemes: Gas Rebate, Medical Energy Rebate, Family Energy Rebate and Life Support Rebate.

Each of these rebates has its own eligibility criteria and some require separate application processes. The Family Energy Rebate is complex to access and apply for, and around one third of households do not reapply each year. Eligible households that receive energy through embedded networks apply directly to the Department for rebates, which are paid by the Department into bank accounts. Embedded networks are energy supply arrangements where the manager of a residential facility such as a caravan park, retirement village or apartment block, buys energy in bulk and then on-sells it to residents. The Department is yet to develop strategies to address a forecast increase in such households.

The design of the rebate schemes creates some inequities

Households in similar circumstances can receive different levels of assistance depending on which adult in the house is the energy account holder, the mix of energy types used in the home, or the EAPA Provider they turn to when in financial crisis.

Households with both gas and electricity connections receive more assistance than those with only electricity. Households in rural and regional areas receive the same value rebate as households closer to Sydney, despite higher distribution charges. Family Energy Rebate is a two-tier payment, with a higher amount available to families with greater means. Lower-income families receive a much smaller Family Energy Rebate on the assumption that they already receive Low Income Household Rebate. Charities and NGOs distributing EAPA crisis support apply inconsistent standards when assessing household need, which leads to inequitable levels of assistance.

Departmental oversight of energy retailers and EAPA Providers is not strong enough

While partnering with energy retailers and EAPA Providers delivers advantages, stronger management is needed to ensure that partners follow Departmental guidelines and to minimise the potential for fraud. The Department's accreditation process for potential EAPA Providers does not consider the applicant's financial governance standards and the most recent audit of EAPA Providers was 2013.

[1] Embedded networks are energy supply arrangements where the manager of a residential facility such as a caravan park, retirement village or apartment block, buys energy in bulk and then on-sells it to residents.

By September 2018, the Department of Planning and Environment should:

Ensure effective strategies are in place to make information about rebates available to all eligible, low-income households
Evaluate alternative models and develop advice for government to reduce complexity and improve equity of ongoing rebates
Establish measurable objectives for schemes that provide ongoing support, and monitor and measure performance of all schemes against objectives and outcome measures
Assess the impacts of the forecast increase in embedded networks and develop strategies to manage any increased administrative risk
Strengthen assurance that EAPA is being provided in accordance with its objectives and guidelines by implementing accreditation and compliance programs
Ensure those eligible for EAPA financial support are not disadvantaged by inflexible payments, inconsistent provider practices, or inability to access an EAPA provider in a timely manner. Options include:
- moving from a fixed-value voucher to a flexible payment based on need irrespective of energy type
- establishing a ‘Provider of Last Resort’ facility for households that cannot access an EAPA Provider.

Parliamentary reference - Report number #292 - released 19 September 2017

17 August 2017

Published

Planning and evaluating palliative care services in NSW

Health

Management and administration

Service delivery

Workforce and capability

NSW Health’s approach to planning and evaluating palliative care is not effectively coordinated. There is no overall policy framework for palliative and end-of-life care, nor is there comprehensive monitoring and reporting on services and outcomes.

Palliative care is an essential component of modern health care services and an increasingly important part of the wider health and social care systems. Palliative care is healthcare and support for people with a life-limiting illness, their families and carers. It is provided by, or informed by, professionals who specialise in palliative care. ‘End of life’ care is provided to people approaching the end of life by health professionals, who may work in the health, community or aged care systems. Not everyone receiving end of life care needs palliative care.

NSW Health has a policy and planning role in palliative and end-of-life care, and it coordinates a wide range of service providers. Local Health Districts (LHDs) provide care services in settings such as homes, hospitals and clinics to patients with varying needs. There are several care providers that can be involved.

Due to this shared nature of palliative care — where many people, services and settings are involved in delivering care to the patient — availability and communication of information is critical. For service planning, data and evidence must be drawn from various sources in a timely and efficient way.

This audit assessed whether NSW Health is effectively planning and evaluating palliative care services, in the context of rising demand, increasingly complex needs, and the diversity of service providers.

Conclusion

NSW Health has a limited understanding of the quantity and quality of palliative care services across the state, which reduces its ability to plan for future demand and the workforce needed to deliver it. At the district level, planning is sometimes ad hoc and accountability for performance is unclear.

The capacity of LHDs to use accurate and complete data to plan and deliver services is hindered by multiple disjointed information systems and manual data collections. Further, a data collection on patient outcomes, for benchmarking and quality improvement, is not used universally. This limits the ability of districts to plan, benchmark and improve services based on outcomes data.

NSW Health's engagement with stakeholders is not systematic. The lack of an overall stakeholder engagement strategy puts at risk the sustainability and value of stakeholder input in planning and limits transparency.

Over the last two years, NSW Health has taken steps to improve its planning and support for districts. The Agency for Clinical Innovation has produced an online resource which will assist LHDs in constructing their own, localised models of care. eHealth, which coordinates information communication technology for the state’s healthcare, aims to invest in integrating and improving information systems. These initiatives should help to address many of the issues now inhibiting integrated service delivery, reporting on activity and outcomes, and planning for the future.

1. By July 2018, NSW Health should develop an integrated palliative and end-of-life care policy framework that:

clearly articulates the interface between palliative and end of life care and outlines the priorities for the respective areas
defines policy goals and objectives, and a performance and evaluation framework for palliative care service planning and delivery
informs a related workforce plan which supports the policy framework and is linked to the Health Professional Workforce Plan 2012–2022
reviews the funding allocation model to ensure future enhancement funds are distributed equitably and transparently based on the need and population of districts.

By December 2018, NSW Health should:

2. assess how the functionality provided in data collection programs such as the Palliative Care Outcomes Collaboration program can be provided across all palliative care services in NSW

3. complete its statewide review of systems and reporting for end of life management including specialist palliative care, and develop a business case to implement a more integrated set of solutions to:

support providers delivering end of life and palliative care
help monitor service quality and quantity
provide comprehensive data for service planning

4. improve stakeholder engagement by:

developing a statewide stakeholder engagement strategy that brings together current activity and good practice, and is transparent and publicly available
defining accountability for overseeing and implementing the strategy at state and district levels.

1. Performance monitoring is inadequate

NSW Government policy on palliative care is outlined in the NSW Government Plan to Increase Access to Palliative Care 2012–2016 (the Plan). Under the Plan, the overarching policy is ‘to ensure that everyone has access to quality palliative care regardless of their economic or social circumstances, their geographical location or their medical condition.’ Some initiatives under the Plan are still being implemented.

NSW Health only has measures in place to assess some processes and activities for individual initiatives under the Plan. There is no tracking of outcomes relating to the policy goals set out in the Plan, such as increased choice to die at home or the location of the patient’s choice, and improved access to specialist palliative care services. NSW Health has not conducted an overall assessment of the Plan’s outcomes to guide future priorities.

Further, there is no overall performance and reporting framework for palliative and end of life care, meaning there is no monitoring of performance of palliative care services for NSW as a whole. This lack of evaluation and performance measurement impacts on NSW Health's ability to monitor progress and achievements, address gaps in service, and plan for future service enhancement.

2. Statewide planning and evaluation lacks coordination

Currently, palliative care services are complex to plan and evaluate. Many policies, strategies, guidelines, directives and data collections currently inform services. Even definitions of services vary. The split of policy functions for palliative care and end-of-life care between different branches within NSW Health adds further complexity. These arrangements create the risk of confusion, gaps in advice and support for LHDs.

Consistency is needed in the use of terminology and planning to achieve an integrated approach at all levels, including:

standard definitions of palliative care and end-of-life care
planning within a single structured policy framework to help clarify what services are to be delivered, who is accountable for delivering them and how to measure their outcomes.

Workforce planning is also affected. While NSW Health has identified significant gaps in the specialist palliative care workforce (especially in regional and remote areas) and it previously made workforce capacity one of its priorities, limited work has been undertaken in producing a statewide strategy to reduce these gaps.

3. District planning is not systematic and some external providers are poorly managed

An integrated approach would inform district-level service planning for palliative care. Planning in the districts we visited was sometimes ad hoc and accountability for performance unclear. Districts would benefit from:

better integrating data collection systems with planning
clearer guidelines, easy-to-use tools, monitoring and accountability systems.

The recently developed guide – A Blueprint for Improvement, from the Agency for Clinical Innovation – should help districts plan more effectively and consistently as it rolls out more widely in 2017. This takes an integrated approach to palliative and end-of-life care. Only one district we visited has finalised a comprehensive plan using the Blueprint.

Issues with district planning extend to external agreements with service providers, as these are sometimes poorly managed and do not support improved patient outcomes. Examples we reviewed showed a significant reporting burden with process-focused reporting. We also found little evidence of monitoring or action as a result of these reports.

4. Diverse information systems mean data collection and use are inconsistent

NSW Health gathers a broad range of data from many collection points and systems to inform palliative care services at hospital, ward or unit level, and community teams. However, the current data is limited because:

activity is under-reported, particularly in community-based services
collection is not universal across districts and services.

Districts also struggle with evidence-based planning and service delivery because multiple information systems mean data may be incomplete or inaccurate. Too often, clinicians and service managers rely on manual collection and paper-based systems.

eHealth, which coordinates information communication technology (ICT) for the state’s healthcare, is planning a statewide approach to capture information and report on all palliative care activity. The current plans of eHealth to review and improve systems should make data more complete, robust and accessible for quality improvement and planning.

5. An overarching stakeholder strategy would strengthen engagement

Just as data is central to effective planning and evaluation, so too is stakeholder engagement. However, there is currently no explicit stakeholder strategy, which means consultation is inconsistent across the state and not systematic at a district level.

While NSW Health uses a range of platforms to consult, the purpose and value is often not clear to stakeholders. Individual districts have some good practices, but there are limited mechanisms to identify and share these with other areas. A state-wide strategy would improve the quality and consistency of engagement, which will in turn inform service planning and delivery.

A stakeholder engagement strategy would integrate current initiatives, such as the two major networks that consult with health planning staff and clinicians. But it will also need to extend the feedback gathered from families, carers and volunteers, and from the peak bodies that represent them.

Parliamentary reference - Report number #291 - released 17 August 2017

10 August 2017

Published

Office of Strategic Lands

Planning

Environment

Management and administration

Procurement

The Office of Strategic Lands effectively fulfils most aspects of its defined role, however, it could do more to support strategic land planning by identifying and acquiring land for future public use proactively rather than waiting for agencies or landholders to approach it. It may also have greater impact if it expanded its activities beyond greater Sydney.

The Office of Strategic Lands (OSL) was established under the Environmental Planning and Assessment Act 1979 (EP&A Act) to identify, acquire, manage and divest land required for long-term planning by the NSW Government, particularly for open space and public purposes.

OSL is a Corporation Sole acting on behalf of the Minister for Planning and is run within the Department of Planning and Environment (DPE). OSL is a self-funding entity, and is responsible for administering the Sydney Region Development Fund (SRDF), a statutory fund used for ongoing land acquisition and management. OSL currently only operates within greater Sydney and holds over a billion dollars in land assets in this region.

This audit assessed whether OSL effectively fulfils its role to identify, acquire, manage and dispose of land, and whether OSL ensures it is sustainable over the long-term to meet its objectives.

Conclusion:

OSL effectively fulfils most aspects of its defined role, but is not supporting strategic land planning through proactive identification and acquisition of land for future public use. OSL is diligent in its financial management over the short and medium terms. However, it has identified that relying on the sale of surplus land to continue funding its ongoing operations is not sustainable, and it is yet to finalise a strategy to address this.

OSL does not currently have a strategic or proactive focus to improve land planning outcomes. This is primarily due to the lack of a clear strategy and business plan to direct its work which defines OSL’s purpose, objectives, goals and performance targets.

OSL expects to finalise and implement a Strategic Business Plan to guide its future direction and long-term sustainability, in late 2017.

OSL has three primary sources of funding. The largest source is Treasury loans which it needs to repay. The next most significant source of funding is from sales of land no longer required for government’s long-term needs. OSL has identified that it is likely to run out of surplus land within ten years. This is a significant financial risk for OSL, which should be addressed through a long-term financial strategy.

Contributions by Sydney councils into the SRDF are OSL’s only regular and consistent income stream. The formula to calculate these contributions has not been reviewed for over 25 years, and recent council mergers and border changes have increased the need to review the formula.

OSL is not used as extensively as it could be by other NSW Government agencies. It has the potential to play a much bigger role in assisting NSW Government agencies with longer term planning by partnering with them to identify, acquire, hold and manage land for future needs. For example, it could acquire land in future residential growth areas for needed public services such as schools, hospitals and transport corridors. There is also potential for OSL to expand its operations beyond the greater Sydney region into other parts of NSW to provide a statewide benefit from its unique role in government.

OSL has a unique role amongst government agencies, and could be used across NSW

NSW Government agencies we spoke with consider OSL fulfils an important role for the state that no other government agency performs. As a self-funding long-term land holder and manager, OSL can acquire and manage land beyond the four-year budget cycle that other government agencies face. Consideration should be given to expanding to other growth areas in NSW, where its unique role could assist in longer term land planning.

OSL has established good processes and procedures for most aspects of its role. This includes governance processes that we found to have been applied effectively. There was also adequate oversight and approvals for land transactions.

OSL has yet to finalise a business strategy to ensure long-term sustainability

OSL has shown that it is financially and operationally viable in the short to medium term. However, it does not have an overarching business strategy to guide its operations and ensure it is financially sustainable for the long-term. With a unique role in government, it is important for OSL to clarify its direction and implement a strategic business plan to drive its progress.

While there is no overarching long-term strategy, OSL has documented operating plans which guide its land acquisition and land divestment activities over the short to medium term. It has not developed a plan for its ongoing land management activities.
OSL advised that its Strategic Business Plan will be finalised and implemented in late 2017. This Plan should clarify OSL’s long-term direction, and guide its business to ensure it is financially sustainable.

OSL does not have adequate performance targets and measures

OSL has four key deliverables as part of DPE’s business plan. These deliverables cover land management, working with other agencies, and ensuring the SRDF is sustainable. There was no evidence that OSL or DPE monitor whether OSL achieves all key deliverables.

Currently, OSL’s performance targets are limited to meeting dollar values. OSL does not have any measures to demonstrate the achievement of outcomes that align with its core business, such as its success in land management or in working with other agencies. OSL staff also said that dollar targets were not always adequate or appropriate to measure its business performance.

With the development of its Strategic Business Plan, OSL has the opportunity to clarify its future business direction. This includes ensuring it has a range of relevant goals and performance measures that will support it becoming a strategic land planning partner with NSW Government agencies and local councils, and a land holder for the long-term.

OSL’s current financial management approach may impact long-term sustainability

OSL has valued the land that it needs to purchase on behalf of government to meet long-term strategic land needs in the Greater Sydney region, at $1.2 billion. However, OSLs annual budget for purchasing land is only between $40 million and $50 million until 2021. Also, in each of the last four years, OSL has not spent more than $30 million on land purchases because it relies on landowners to initiate contact when they are ready to sell their land.

Without a more proactive approach, it is not possible for OSL to make needed purchases in a timely manner. OSL acknowledges the substantial gap between these values, but has not established a budget or plan for how it will purchase all the identified land.

OSL has developed a Divestment Strategy which provides a five-year schedule of planned divestments. This is land OSL owns which has been identified as no longer required for government purposes. OSL has established an approach to generate the best and highest price for these sales. While funds are generated through the sale of surplus land, it also means that OSL holds fewer land assets to sell. OSL has identified it will run out of surplus land within ten years.

OSL needs to finalise and implement a business model to ensure it is financially and operationally capable to sustain and grow its business for the long-term.

OSL is working to improve transparency and engagement with key stakeholders

To deliver on its role, OSL needs to be able to effectively engage and work with its stakeholders, including NSW Government agencies, local councils, and people selling or buying land.

NSW Government agencies we spoke with are generally satisfied with OSL’s level of engagement and consultation. However, it would be beneficial for all parties to clarify and document their expectations of each other through a formal arrangement. OSL could also be more proactive in promoting its services, and working with additional NSW Government agencies to identify strategic lands.

The local councils in the Sydney region we spoke with are not as satisfied with OSL’s engagement and communication. The councils advised that they do not consider they are well-informed of OSL’s plans for their area, or how their contributions to the SRDF are spent.

More broadly, the activities of OSL are not reported transparently to stakeholders or the general public. OSL is developing a communication package for local councils and the community. This is an opportunity for OSL to improve the transparency of its role, operations, projects, and the SRDF, as well as promote its services and achievements.

The Office of Strategic Lands (OSL) was established in 1951 to identify, acquire, manage and divest land required for the NSW Government's long term planning purposes. OSL acts on behalf of the Minister for Planning, as a Corporation Sole, under the Environmental Planning and Assessment Act 1979 (EP&A Act).

OSL acquires and manages land identified for long-term strategic needs, and then transfers or sells it to other government agencies for ultimate use. It also sells land identified as surplus to government’s long term strategic requirements. Surplus land can also be transferred to local councils. OSL operates only in the greater Sydney region (from Wyong in the north, to the base of the Blue Mountains in the west, and south to Wollondilly). OSL has 20 staff who manage over 6,000 parcels of land.

The Department of Planning and Environment (Office of Strategic Lands) should:

By December 2017:

clarify and document its long-term purpose, role and goals in line with its mandate. This includes:
- finalising and implementing a business plan with outcome-based performance measures that support the achievement of its goals
- establishing and implementing a business and financial model, including resourcing, that supports its long-term strategy
- exploring options for expanding the operation of OSL to other areas of NSW.

By July 2018:

2. develop and implement an approach for working with NSW Government agencies to improve its efficacy in strategic land identification, acquisition and management.

On an ongoing basis:

3. improve the transparency of its operations, and its communication and engagement with all stakeholders. This includes developing engagement strategies appropriate for different stakeholder groups.

Parliamentary reference - Report number #290 - released 10 August 2017

8 June 2017

Published

NorthConnex

Premier and Cabinet

Treasury

Transport

Compliance

Infrastructure

Internal controls and governance

Management and administration

Procurement

The processes used to assess NorthConnex adequately considered value for money for taxpayers.This report also found that the impact of tolling concessions on road users and the motorway network was consistent with policy objectives described in the 2012 NSW Long Term Transport Master Plan.

By December 2017, the Department of Premier and Cabinet should:

1. publish an updated ‘Unsolicited Proposals – Guide for Submission and Assessment’ which clarifies obligations with requirements in other NSW Government policies such as the NSW PPP guideline and Infrastructure Investor Assurance Framework. The update should require:

a) a business case to be prepared, and a business case gateway review completed, as part of the assessment of the detailed proposal (currently stage 2)

b) probity reports must be completed and considered before the decision to proceed to the next stage.

The Department of Premier and Cabinet and NSW Treasury should immediately:

2. improve record keeping to ensure compliance with the State Records Act 1998 and the NSW Government Standard on Records Management.

Parliamentary reference - Report number #287 - released 8 June 2017

25 May 2017

Published

Medical equipment management in NSW public hospitals

Health

Compliance

Internal controls and governance

In an audit of medical equipment in NSW hospitals, the NSW Auditor-General, Margaret Crawford found that the management of PET-CT scanners could be enhanced by better performance reporting and replacement planning, and that biomedical equipment needed more timely testing and maintenance.

The NSW Auditor-General examined the management of:

Medical equipment needs to be properly managed over its lifecycle, from planning to acquisition, operation and disposal, to ensure patient safety and quality of care.

This audit assessed how well NSW hospitals managed medical equipment to meet the needs of patients. We examined the management of:

Positron Emission Tomography and Computed Tomography (PET-CT) scanners, a high-value piece of equipment commonly used for diagnosing cancer
a small sample of lower value but critical medical equipment known as biomedical equipment.

We examined five hospitals for this audit: Lismore Base Hospital (in the Northern NSW Local Health District (LHD)), Liverpool Hospital (South Western Sydney LHD), Nepean Hospital (Nepean Blue Mountains LHD), Royal Prince Alfred Hospital (Sydney LHD) and Westmead Hospital (Western Sydney LHD).

Conclusion

Management of PET-CT scanners

PET-CT scanners were well managed, though could be enhanced by better performance reporting and replacement planning.

The PET-CT scanners we reviewed were well utilised and there was prompt reporting of scan results by specialists to referring doctors.

In 2015–16, 10 per cent of PET-CT scans were inpatient services (funded mostly by NSW Health), 60 per cent were Medicare-funded outpatient services, and the remaining 30 per cent were privately referred outpatient services not funded by Medicare. Service costs for privately referred scans not funded by Medicare were met by a range of sources, including hospitals’ general purpose funds and patient out-of-pocket charges. Across the five hospitals, out-of-pocket charges varied and ranged from $250 to $950 per scan.

While responsibility for providing PET-CT services has been delegated to Local Health Districts, NSW Health could assume an enabling role in collating performance reporting to inform service planning and benchmarking.

There was little equipment replacement planning for PET-CT scanners, making it unclear when and how equipment might be replaced, including what model of funding might apply.

Management of biomedical equipment

Improvement is needed in the timeliness of testing and maintenance for biomedical equipment. Outdated and inefficient information systems used for day-to-day management of biomedical equipment need to be improved or replaced.

Only about half of the items of equipment included in our sample had testing and maintenance completed according to scheduled intervals or within 30 days of the scheduled date. These intervals were set under the Australian/New Zealand Standard 3551 ‘Management programs for medical equipment’, which requires regular testing and maintenance of biomedical equipment to ensure it is safe and suitable for clinical use.

The information systems used to record service histories of biomedical equipment were inefficient and inadequate for effective planning, monitoring and reporting of testing and maintenance. The implementation of a state-wide asset management system, Asset and Facilities Management Online (AFM Online), which will replace existing systems, has experienced delays. In addition, hospitals did not maintain adequate oversight of testing and maintenance that was outsourced to external contractors.

Management of PET-CT scanners

PET-CT scanners were well utilised and reports were promptly sent to referring doctors

PET-CT scanners in Liverpool, Westmead and Royal Prince Alfred Hospitals were utilised to over 85 per cent of capacity. Utilisation at Nepean Hospital (around 60 per cent) was lower due to the age of the equipment and insufficient ‘uptake rooms’ for patients to receive radioactive injections. Lismore Base Hospital had a lower population to service and scheduled its PET-CT patients into three days a week to optimise efficiency.

PET-CT services were generally available to patients in a timely way and reports were promptly sent back to referring doctors. While clinicians we interviewed advised that there was generally no delay in patients accessing PET-CT scanners, only one hospital collected patient waiting time data to confirm this view.

Funding of PET-CT scans is complex

The funding of health services in NSW public hospitals involves a complex arrangement between the Australian and NSW Governments. In 2015–16, 10 per cent of PET-CT scans were inpatient services (funded mostly by NSW Health), 60 per cent were Medicare-funded outpatient services, and the remaining 30 per cent were privately referred outpatient services not funded by Medicare. Service costs for privately referred scans not funded by Medicare were met by a range of sources, including hospitals’ general purpose funds and patient out-of-pocket charges. Across the five hospitals, out-of-pocket charges varied and ranged from $250 to $950 per scan.

Better performance reporting could enable better planning of PET-CT scanners

NSW Health has delegated the planning functions for many pieces of high-value medical equipment, including PET-CT scanners, to Local Health Districts. This is intended to ensure local decision-making that is responsive to local community needs.

While local planning and service delivery is delegated to each Local Health District, under the Health Administration Act 1982, the Secretary of NSW Health is responsible for planning the provision of comprehensive, balanced and co-ordinated health services throughout New South Wales.

NSW Health could enable better service delivery and planning by collating and sharing performance information about PET-CT services across Local Health Districts.

Equipment replacement planning was unclear

Planning for future replacement of PET-CT scanners at the hospitals we examined was unclear, including when equipment would be replaced and what funding model might be applied. A better practice would be to have a clear equipment replacement plan for existing scanners that would ensure clarity about when equipment will be replaced, whether the replacement scanner should be leased, purchased or shared, and possible funding sources.

Management of biomedical equipment

Equipment testing and maintenance did not always comply with intervals set under the Australian/New Zealand Standard All hospitals we examined adopted the Australian/New Zealand Standard

All hospitals we examined adopted the Australian/New Zealand Standard 3551 ‘Management programs for medical equipment’ (the Standard) for managing medical equipment, the purpose of which is to ensure that equipment is safe and suitable for use. The Standard requires the regular testing and maintenance of biomedical equipment at predetermined intervals.

Our review of three years of service records for 50 items of biomedical equipment found that:

nineteen (38 per cent) items of equipment were tested and maintained within the intervals determined by hospitals under the Standard
five (ten per cent) had at least one instance where they were tested and maintained less than 30 days later than when the work was due
thirteen (26 per cent) had at least one instance where they were tested and maintained one to six months later than when the work was due
six (12 per cent) had at least one instance where they were tested and maintained more than six months later than when the work was due
seven (14 per cent) were lost, removed from clinical use or unable to be unidentified.

The Standard envisages that there may be circumstances when testing and maintenance does not occur according to schedule, and sets out a procedure that should be followed when testing and maintenance is overdue. This procedure was not followed in any of the hospitals we reviewed.

Two out of five audited hospitals used risk rating to oversee equipment maintenance

Only two out of five hospitals we examined used risk rating, under which equipment is classified according to clinical risk, to prioritise equipment maintenance and to determine appropriate frequencies for equipment testing and maintenance.

Some hospitals had inadequate oversight of work performed by external contractors

There was variable oversight of outsourced service contracts for high-risk biomedical equipment. In some cases, hospitals did not maintain complete histories of testing and maintenance work performed by contractors. Some contractors had incorrectly recorded items they had tested, or had refused to provide details of testing and maintenance performed.

New peer review process may improve assurance over testing and maintenance

NSW Health has started a peer review process in a small number of hospitals. This process covers a range of performance indicators relating to equipment management practices, including the auditing of test and maintenance records for two pieces of equipment per hospital. There is opportunity to build upon this effort by including all hospitals in the peer review process, and by expanding the sample of equipment subject to records audit.

Hospitals’ record keeping of testing and maintenance service histories was inefficient and inadequate

The Standard requires that adequate and traceable equipment maintenance histories be kept. We found that hospitals’ record keeping of equipment service histories was inefficient and inadequate. None of the hospitals used an information system that provided the full three-levels of capability outlined below:

storing equipment information electronically, allowing easy retrieval
managing service requests and holding full service histories and test results
automatically generating reports to allow risk based prioritisation of equipment maintenance, repairs and replacements.

There is an urgent need to implement the state-wide asset management system for biomedical equipment

Hospitals advised that the current outdated systems will be replaced by a state-wide asset management system, Asset and Facilities Management Online, though this implementation has experienced delays.

There was good governance over equipment acquisition, replacement and disposal

All hospitals had formal processes for acquiring and replacing biomedical equipment, including management committees to oversee equipment needs. Equipment disposal processes were aligned with relevant standards and policies.

All hospitals purchased the majority of their biomedical equipment through HealthShare, the central procurement agency of NSW Health. This contributed to cost savings across the health system.

Management of medical equipment in the NSW public health system

In New South Wales, responsibility for the management of public hospitals is devolved from the NSW Ministry of Health to 15 Local Health Districts and two Speciality Health Networks.The Secretary of NSW Health retains a function under the Health Administration Act 1982 to plan the provision of comprehensive, balanced and co-ordinated health services throughout the State.

Every year, the Ministry of Health and Local Health Districts sign a service agreement that sets out the expected performance from Local Health Districts and the funding they will receive to provide their services. Under these arrangements, responsibility for managing medical equipment is delegated to Local Health Districts.

Medical equipment is used to diagnose, treat and manage patients. It includes items as diverse as patient beds, dialysis machines, operating tables and heart monitors. The good management of medical equipment contributes to ensuring patient care and safety, as well as keeping the cost burden on the public health system low.

The New South Wales public health system uses a wide range of medical equipment. Most of this equipment is used in hospital settings, however, some is also used in community health centres and patients’ homes. The cost of individual items ranges from less than $100 to several million dollars. In total, about $1.2 billion, or six per cent of NSW Health’s total asset value, was for medical equipment.

The approach used to manage medical equipment varies between hospitals, and between expensive and less-expensive items. Different service models are also used, for example, some items may be purchased in one hospital, but leased in another.

About the audit

This audit assessed how well NSW public hospitals managed medical equipment to meet the needs of patients. We looked at the lifecycle of biomedical equipment, which comprises planning, acquisition, operation and maintenance, and then replacement and disposal. The audit questions in relation to each stage of the lifecycle are summarised in Exhibit 1.

By June 2018

NSW Health should review all services provided by Local Health Districts which use high-value medical equipment (with establishment cost that exceeds $3 million), to determine whether state-level coordination, service benchmarking and equipment usage reporting is warranted.
NSW public hospitals offering PET-CT services should collect and use patient waiting time data (the difference between the date of referral and the actual date of the scan) as part of improving service efficiency and meeting patient needs.
Local Health Districts should ensure that there is a formal equipment replacement plan at the time of procuring high-value equipment, for both new and existing services. The plan should include an estimated time of replacement. The Ministry of Health should regularly review capital funding implications from these planned equipment replacements.

By June 2019

4. NSW public hospitals should review internal business rules and processes for biomedical equipment management to ensure that:

a) equipment is accessible by service technicians for testing and maintenance work, including establishing internal processes to assist service technicians in gaining access to equipment that has missed previous testing and maintenance attempts in accordance with the Australian/New Zealand Standard 3551

b) adequate maintenance records are kept, including descriptions of testing and maintenance work carried out in accordance with the Australian/New Zealand Standard 3551

c) there is regular reporting to Local Health District Chief Executives on the compliance of equipment testing and maintenance, including equipment that is tested or maintained later than scheduled intervals

d) there is specified statement of risk tolerance for late equipment testing and maintenance and mechanisms to appropriately prioritise equipment testing and maintenance.

5. Ministry of Health should encourage that all NSW public hospitals have their biomedical equipment management practices reviewed under the new peer review process, and that the review sample from each hospital be increased to more than two pieces of equipment per hospital.

6. Ministry of Health should complete the implementation of AFM Online for biomedical equipment management.

Parliamentary reference - Report number #286 - released 25 May 2017

Audit progress

Sector

Year

Report type

Topic

Reports

1. Overall trends

2. Information Technology

3. Asset Management

4. Governance

5. Ethics and Conduct

6. Risk Management

This new report offers strategic insight on the public sector as a whole

2.1 IT security

2.2 Cyber Security

2.3 Other IT systems

3.1 Capital investment

3.2 Capital projects

3.3. Asset disposals

4.1 Governance arrangements

4.2 Shared services

5.1 Ethical framework

5.2 Potential conflicts of interest

6.1 Risk management maturity

6.2 Risk management elements

1. Financial reporting and controls

2. Service Delivery

2.1 Quality of financial reporting

2.2 Timeliness of financial reporting

2.3 Financial and sustainability analysis

2.5 Internal controls

3.1 Premier's and State priorities

3.2 Planning

3.3. Environment and Heritage

3.4 Water

3.5 Arts and culture

Conclusion

The Department and partner organisations administer the rebate schemes as designed

Communication about rebates does not reach all eligible households

Scheme objectives are not measurable

The structure of rebate schemes for ongoing support is complex

The design of the rebate schemes creates some inequities

Departmental oversight of energy retailers and EAPA Providers is not strong enough

1. Performance monitoring is inadequate

2. Statewide planning and evaluation lacks coordination

3. District planning is not systematic and some external providers are poorly managed

4. Diverse information systems mean data collection and use are inconsistent

5. An overarching stakeholder strategy would strengthen engagement

OSL has a unique role amongst government agencies, and could be used across NSW

OSL has yet to finalise a business strategy to ensure long-term sustainability

OSL does not have adequate performance targets and measures

OSL’s current financial management approach may impact long-term sustainability

OSL is working to improve transparency and engagement with key stakeholders

Management of PET-CT scanners

PET-CT scanners were well utilised and reports were promptly sent to referring doctors

Funding of PET-CT scans is complex

Better performance reporting could enable better planning of PET-CT scanners

Equipment replacement planning was unclear

Management of biomedical equipment

Equipment testing and maintenance did not always comply with intervals set under the Australian/New Zealand Standard All hospitals we examined adopted the Australian/New Zealand Standard

Two out of five audited hospitals used risk rating to oversee equipment maintenance

Some hospitals had inadequate oversight of work performed by external contractors

New peer review process may improve assurance over testing and maintenance

Hospitals’ record keeping of testing and maintenance service histories was inefficient and inadequate

There is an urgent need to implement the state-wide asset management system for biomedical equipment

There was good governance over equipment acquisition, replacement and disposal

Management of medical equipment in the NSW public health system

About the audit