This report provides parliament and other users of the Transport cluster’s financial statements with the results of our audits, our observations, analysis, conclusions and recommendations in the following areas:

• financial reporting
• audit observations
• the impact of emergencies and the pandemic.

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

This chapter outlines our audit observations related to the financial reporting of agencies in the Transport cluster for 2020, including any financial implications from the recent emergency events.

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

This chapter outlines our:

• observations and insights from our financial statement audits of agencies in the Transport cluster
• assessment of how well cluster agencies adapted their systems, policies and procedures, and governance arrangements in response to recent emergencies.

Appendix one – List of 2020 recommendations

Appendix two – Status of 2019, 2018 and 2017 recommendations

Appendix three – Management letter findings

Appendix four – Financial data

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

This report analyses the results of our audits of financial statements of the agencies comprising the Stronger Communities cluster for the year ended 30 June 2020. The table below summarises our key observations.

This report provides parliament and other users of the financial statements of agencies in the Stronger Communities cluster with the results of our audits, our observations, analysis, conclusions and recommendations.

Agencies in the Stronger Communities cluster were significantly impacted by the bushfires, floods and the COVID-19 pandemic in 2019–20. Our 2019–20 financial audits of the seven cluster agencies most significantly impacted by the recent emergency events considered:

• the financial implications of the emergency events
• changes to agencies' operating models and control environments
• delivery of new or expanded projects, programs or services at short notice.

Our findings on these seven agencies' responses to the recent emergencies are included throughout this report. These agencies are:

• Department of Communities and Justice
• Fire and Rescue NSW
• NSW Police Force
• Office of the NSW Rural Fire Service
• Office of the NSW State Emergency Service
• Sydney Cricket and Sports Ground Trust
• Venues NSW.

The Department of Communities and Justice is the principal agency of the cluster. The names of all agencies in the Stronger Communities cluster are included in Appendix one.

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

This chapter outlines our audit observations related to the financial reporting of agencies in the Stronger Communities cluster for 2020, including any financial implications from the recent emergency events.

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

This chapter outlines our:

• observations and insights from our financial statement audits of agencies in the Stronger Communities cluster
• assessment of how well cluster agencies adapted their systems, policies and procedures, and governance arrangements in response to recent emergencies
• review of how the cluster agencies managed the increased risks associated with new programs aimed at stemming the spread of COVID-19 and stimulating the economy.

Appendix one – Timeliness of financial reporting by agency

Appendix two – Management letter findings by agency

Appendix three – List of 2020 recommendations 

Appendix four – Status of 2019 recommendations 

Appendix five – Selected agencies for review of response to emergency events 

Appendix six – Financial data 

Copyright notice

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

This report focuses on how Transport for NSW and Sydney Trains manage crowding at selected metropolitan train stations.

The audit found that while Sydney Trains has identified platform crowding as a key strategic risk, it does not have an overarching strategy to manage crowding in the short to medium term. Sydney Trains 'do not have sufficient oversight to know if crowding is being effectively managed’, the Auditor-General said.

Sydney Trains' operational response to crowding involves restricting customer access to platforms or station entries before crowding reaches unsafe levels or when it impacts on-time running. Assuming rail patronage increases, it is likely that Sydney Trains will restrict more customers from accessing platforms or station entries, causing customer delay. ‘Restricting customer access to platforms or station entries is not a sustainable approach to manage station crowding’, said the Auditor-General.

The Auditor-General made seven recommendations to improve Transport for NSW and Sydney Trains' management of station crowding. Transport for NSW have accepted these recommendations on behalf of the Transport cluster.

Public transport patronage has been impacted by COVID-19. This audit was conducted before these impacts occurred.

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Sydney Trains patronage has increased by close to 34 per cent over the last five years, and Transport for NSW (TfNSW) expects the growth in patronage to continue over the next 30 years. As patronage increases there are more passengers entering and exiting stations, moving within stations to change services, and waiting on platforms. As a result, some Sydney metropolitan train stations are becoming increasingly crowded.

There are three main causes of station crowding:

• patronage growth exceeding the current capacity limits of the rail network
• service disruptions
• special events.

Crowds can inhibit movement, cause discomfort and can lead to increased health and safety risks to customers. In the context of a train service, unmanaged crowds can affect service operation as trains spend longer at platforms waiting for customers to alight and board services which can cause service delays. Crowding can also prevent customers from accessing services.

Our 2017 performance audit, ‘Passenger Rail Punctuality’, found that rail agencies would find it hard to maintain train punctuality after 2019 unless they significantly increased the capacity of the network to carry trains and people. TfNSW and Sydney Trains have plans to improve the network to move more passengers. These plans are set out in strategies such as More Trains, More Services and in the continued implementation of new infrastructure such as the Sydney Metro. Since 2017, TfNSW and Sydney Trains have introduced 1,500 more weekly services to increase capacity. Additional network capacity improvements are in progress for delivery from 2022 onwards.

In the meantime, TfNSW and Sydney Trains need to use other ways of managing crowding at train stations until increased capacity comes on line.

This audit examined how effectively TfNSW and Sydney Trains are managing crowding at selected metropolitan train stations in the short and medium term. In doing so, the audit examined how TfNSW and Sydney Trains know whether there is a crowding problem at stations and how they manage that crowding.

TfNSW is the lead agency for transport in NSW. TfNSW is responsible for setting the standard working timetable that Sydney Trains must implement. Sydney Trains is responsible for operating and maintaining the Sydney metropolitan heavy rail passenger service. This includes operating, staffing and maintaining most metropolitan stations. Sydney Trains’ overall responsibility is to run a safe rail network to timetable.

Appendix one – Response from agency

Appendix two – Sydney rail network

Appendix three – Rail services contract

Appendix four – Crowding pedestrian modelling

Appendix five – Airport Link stations case study

Appendix six – About the audit

Appendix seven – Performance auditing

Copyright notice

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

Parliamentary reference - Report number #333 - released 30 April 2020

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

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

We issued unqualified audit opinions on the above agencies’ 30 June 2013 financial statements. During the year, The Treasury issued TC 13/01 ‘Mandatory early close procedures for 2013’. As a result, the law and order services agencies were required to perform early close procedures. All law and order service agencies were broadly successful in performing the procedures, which helped them submit financial statements by an earlier due date. This in turn enabled the financial statement audits to be finalised within an earlier timeframe of eight weeks (nine weeks in 2011-12).

As previously recommended, the Department of Attorney General and Justice should continue integrating policies, operations and systems between its divisions and, once complete, analyse the costs and benefits. The Department of Attorney-General and Justice should also ensure it has the necessary processes in place to enable it to regularly monitor and measure the performance and success of the Victims Support Scheme in providing a more accessible, streamlined and targeted service to victims of violent crime in New South Wales.

We issued unqualified audit opinions on the transport entities’ 30 June 2012 financial statements.

Some of the findings of the report include:

• government funding to the public transport operators totalled $4.4 billion in 2011-12 ($3.7 billion in 2010-11)

• passenger services revenue only covered 20 per cent of RailCorp's operating costs

• Transport for NSW has formalised a protocol to mitigate the risk of potential conflicts of interests

• At present, no sustainability framework exists for the transport agencies around environment and sustainability. Transport for NSW should complete its Environment and Sustainability Policy Framework by June 2013 and should publicly report its results annually

• Transport patronage continued to grow with 510 million journeys on train, bus and ferry services

• CityRail had two peak hour periods where only 36 per cent and 39 per cent of services were on time

• On-time running performance for Sydney Ferries was above the NSW 2021 plan target of 98.5 per cent for most routes in 2011-12

• Customer surveys by transport agencies no longer specifically address crowding on public transport. Transport for NSW should observe and report on crowding on all transport modes

• Over 2,500 transport staff, or 8.3 per cent of the workforce, have excessive leave balances. All transport entities should do more to reduce excessive annual leave balances to ensure they will comply with new targets set by the Premier.

Since the Victims’ Compensation Scheme started in 1989, $1.6 billion has been paid to victims of crime, but only $57.4 million or nearly four per cent has been recovered from convicted offenders. The remaining 96 per cent has been funded by the taxpayer.

The NSW Government’s defined benefit superannuation funds have had positive returns for the last three years. However, the returns fell significantly in 2011-12. Global economic conditions led to substantial volatility and uncertainty in markets creating challenges for superannuation funds’ trustees.

Overtime is a significant cost for RailCorp and Roads and Maritime Services, adding about ten per cent to the cost of regular salaries. RailCorp’s overtime cost was $133.7 million in 2010–11, and at Roads and Maritime Services it cost $49.3 million.

Parliamentary reference - Report number #223 - released 20 June 2012

The following overview of audits from 2011 found agency restructures significantly impacted agency financial reporting processes, agencies are having difficulty establishing and enforcing compliance with their own policies and procedures, agencies experienced problems complying with regulations and providing adequate documentation to support their financial statements, the poor quality of some financial statements with 1,256 misstatements identified, 540 so significant they had to be corrected, deficiencies in information security exist across many agencies, computer system disaster recovery plans for financial systems not existing or outdated, do not align with agencies’ business recovery requirements, do not properly identify and assess critical systems and processes and testing is incomplete.