What this report is about

Extreme rainfall across eastern Australia in 2021 and 2022 led to a series of major flood events in New South Wales.

This audit assessed how effectively the NSW Government provided emergency accommodation and temporary housing in response to the early 2022 Northern Rivers and late 2022 Central West flood events.

Responsible agencies included in this audit were the Department of Communities and Justice, NSW Reconstruction Authority, the former Department of Planning and Environment, the Department of Regional NSW and the Premier’s Department.

Findings

The Department of Communities and Justice rapidly provided emergency accommodation to displaced persons immediately following these flood events.

There was no plan in place to guide a temporary housing response and agencies did not have agency-level plans for implementing their responsibilities.

The NSW Government rapidly procured and constructed temporary housing villages. However, the amount of temporary housing provided did not meet the demand.

There is an extensive waitlist for temporary housing and the remaining demand in the Northern Rivers is unlikely to be met. The NSW Reconstruction Authority has not reviewed this list to confirm its accuracy.

Demobilisation plans for the temporary housing villages have been developed, but there are no long-term plans in place for the transition of tenants out of the temporary housing.

Agencies are in the process of evaluating the provision of emergency accommodation and temporary housing.

The findings from the 2022 State-wide lessons process largely relate to response activities.

Audit recommendations

The NSW Reconstruction Authority should:

• Develop a plan for the provision of temporary housing.
• Review the temporary housing waitlist.
• Determine a timeline for demobilising the temporary housing villages.
• Develop a strategy to manage the transition of people into long-term accommodation.
• Develop a process for state-wide recovery lessons learned.

All audited agencies should:

• Finalise evaluations of their role in the provision of emergency accommodation and temporary housing.
• Develop internal plans for implementing their roles under state-wide plans.

Extreme rainfall across eastern Australia in 2021 and 2022 led to a series of major flood events in New South Wales. In response, the NSW Government declared each of these events a natural disaster and made available a wide range of support for affected individuals and businesses. The flooding experienced by the State was widespread and its severity caused significant destruction in communities across the State. Some of the most significant damage occurred in the Northern Rivers and Central West regions of New South Wales.

Whilst areas of the Northern Rivers are prone to regular flooding, the scale of flooding in 2022 had not been experienced in the region before. On 28 February 2022, the Wilsons River in Lismore reached a height of 14.4 metres, approximately 2.3 metres higher than the previous record. A second flood occurred on 30 March 2022, with the river reaching 11.4 metres. The flooding in the region was extensive, affecting towns including Lismore, Coraki, Woodburn and Ballina. Between late February and early April 2022, 13 lives were lost in the Northern Rivers floods. In addition, 4,055 properties were deemed uninhabitable, and a further 10,849 properties were assessed as damaged. Approximately 4,000 people had to be evacuated from Lismore alone during this period, with thousands displaced from their homes across the region.

In the Central West, on 14 November 2022, the Lachlan River at Forbes peaked at 10.6 metres and was categorised as major flooding due to the inundation of extensive rural areas with properties, villages and towns isolated. On the same day in Eugowra, the Mandagery Creek peaked at 9.8 metres, passing the previous record of 9.6 metres in 1950. Flooding occurred in other areas of the Central West including Parkes, Molong, Cowra and Canowindra. Two lives were lost in the town of Eugowra with 80% of homes and businesses in the town damaged.

This audit assessed the following two areas of NSW Government support provided in response to these flood events:

• Provision of emergency accommodation: short-term accommodation provided to displaced persons unable to return to their own home in an emergency situation.
• Provision of temporary housing provided in the form of temporary pods and caravans.

The Department of Communities and Justice (DCJ) is responsible for the provision of emergency accommodation and other welfare services in response to a disaster event. With regards to temporary housing, the following agencies were involved in this audit:

• Resilience NSW was the lead agency responsible for recovery and led the implementation of the temporary housing program under the oversight of the Chair, Housing Taskforce (HTF) from July 2022. On 16 December 2022, Resilience NSW was abolished, with some staff transferred to the NSW Police Force, Department of Premier and Cabinet (DPC) and DCJ. The remaining staff were transitioned to the newly established NSW Reconstruction Authority.
• The Department of Planning and Environment (DPE) chaired the HTF until July 2022 and led the process for the identification and evaluation of temporary housing village sites. On 1 January 2024, DPE was abolished and the DPE functions discussed in this report now form part of the Department of Planning, Housing and Infrastructure.
• NSW Public Works (NSWPW), a branch of the Department of Regional NSW (DRNSW) procured and managed the construction of the pods used in this program, and procured the caravans used as part of the temporary housing response.

The then DPC (now Premier’s Department (PD)) was responsible for whole-of-government policy advice, convening the Crisis Policy Committee of Cabinet, and whole-of-government communications.

This audit assessed how effectively the NSW Government provided emergency and temporary housing in response to the early 2022 Northern Rivers and late 2022 Central West flood events. We addressed this objective by examining whether the audited agencies:

• effectively planned for the provision of emergency accommodation and temporary housing prior to the flood events
• provided emergency accommodation and temporary housing to meet the needs of affected communities in response to the flood events
• are effectively capturing lessons learned in relation to their provision of emergency accommodation and temporary housing as part of the flood response.

There is a State-level plan in place to guide the approach to emergency accommodation

The Welfare Services Functional Area Supporting Plan (WSFASP, the plan) is a supporting plan to the New South Wales Emergency Management Plan (EMPLAN). The plan outlines the responsibilities of the Department of Communities and Justice (DCJ) for the coordination and delivery of disaster welfare services in New South Wales. This includes the provision of emergency accommodation services. The plan in place during the flood events outlined the responsibilities of DCJ and the former Office of Emergency Management (OEM), some responsibilities of which have since transitioned to the NSW Reconstruction Authority (the Reconstruction Authority). The plan sets out a framework for government and non-government organisations to coordinate to provide key welfare services during an emergency, and outlines agreed roles and responsibilities. The plan outlines preparedness measures and arrangements for the provision of key welfare services during the response to and recovery from emergencies in New South Wales.

The plan details the organisations and key positions involved in welfare services, including their overall roles and responsibilities, and a basic structure for the delivery of disaster welfare services. For example, the plan states that both the former Department of Families and Communities Services and the not-for-profit Adventist Development and Relief Agency (ADRA) are responsible for emergency accommodation but does not clarify the detailed responsibilities associated with this role. These provide a State-wide, though not detailed, approach to emergency accommodation and welfare services in a disaster recovery context.

There was no plan in place to guide the temporary housing response, despite the NSW Government utilising this type of response in a previous emergency event

The State-level emergency planning documents do not contemplate the need for temporary housing as a government disaster response. Although there was a temporary housing response to the Black Summer bushfires in 2019–20, albeit on a smaller scale, no specific plans were in place to guide this response or the flood events in 2021–22. The NSW Government therefore had to develop its approach to addressing demand for temporary housing whilst responding to the flood emergency as it was occurring.

A partnership was established between the NSW Government and the Minderoo Foundation in 2020 to provide 100 pods to people whose homes were destroyed in the Black Summer bushfires. The initial rollout consisted of four-person pods, however the need for greater capacity was identified, with larger, family-sized pods developed for up to six people. The implementation of this program did not include formalising the work completed in documented plans for future use in response to other emergency events.

A plan that sets out how temporary housing should be used is in place in Queensland. The Queensland Government released a Temporary Emergency Accommodation (TEA) plan in 2021 which describes the arrangements, roles and responsibilities of key organisations critical to supporting displaced community members after the closure of an evacuation centre. The TEA plan outlines the five phases in the provision of accommodation support which includes temporary housing recovery. This demonstrates that a plan for the use of temporary accommodation would not be unprecedented.

Without plans in place to respond to all aspects of an emergency, decision makers are forced to be reactive in their decision making or to develop these plans while also responding to the events. In this specific instance, the government was forced to develop governance structures and perform tasks such as options analysis and site selection for temporary housing during the immediate aftermath of the flood events.

The Reconstruction Authority has acknowledged the need for a formalised plan for temporary housing responses and has started work to develop this in preparation for future flood events. It advised that the Housing Taskforce (HTF) has begun this work by performing assessments and reviews of high-risk areas and engaging with local councils and community groups. The Reconstruction Authority is also developing a Recovery Readiness Checklist, which will include preparedness for the provision of temporary housing in an emergency. Pre-event recovery planning specific to Local Government Areas (LGAs) is also underway, with the Reconstruction Authority developing tailored checklists which cover the provision of temporary housing. These tools will form part of the State's recovery response under the NSW Recovery Plan, which the Reconstruction Authority is currently in the process of updating. The Reconstruction Authority advises that this update will include identifying responsibilities in relation to the temporary housing response and recovery more broadly.

The WSFASP in place during the flood events had not been reviewed and updated in line with its planning requirements

Plans which outline the coordination and delivery of services in response to an emergency are imperative to ensure all required activities are completed, and the needs of affected communities are met. Plans also serve as a common reference point for decision making. Out of date plans can result in unclear roles and responsibilities, requiring agencies to make improvised decisions due to the urgent nature of emergency response. This creates a risk of key activities not being fulfilled and community needs going unmet.

The WSFASP in place during the flood response was last updated and endorsed by the State Emergency Management Committee (SEMC) in June 2018. As part of the planning requirements outlined in the plan, the State Welfare Services Functional Area Coordinator (WelFAC) is required to ensure the plan is reviewed every five years, or when relevant aspects require review following emergency operations or changes to legislation. The State WelFAC is an officer from DCJ responsible for the monitoring, support and coordination of disaster welfare services in New South Wales.

In 2020, a machinery of government change was implemented which established Resilience NSW as a public service executive agency and transferred persons employed in OEM to Resilience NSW. Despite these legislative changes, the plan had not been updated in line with its requirements to reflect these and subsequent changes, as OEM was still listed as one of the two agencies responsible for the coordination and delivery of disaster welfare services. Similarly, the plan had not been updated to reflect emergency operations changes with ADRA listed as the responsible coordinator for the provision of emergency accommodation services, despite no longer being responsible for this service.

The WSFASP has since been updated to reflect these changes and was endorsed by the SEMC in September 2023. The current WSFASP aligns with the welfare services responsibilities following the transfer of the welfare services functional area to DCJ in 2023. This includes the role of DCJ as the lead agency for the WSFASP, and DCJ and the Housing Contact Centre (HCC) within DCJ as the coordinator of emergency accommodation. The updated plan also provides an outline of the key welfare services that are delivered by the functional area, including emergency accommodation, personal support, essential food and grocery items, and transition from emergency accommodation. The outline provides a description of each service and the agency, team or non-government organisation responsible for coordinating the service.

Agencies did not have agency-level plans in place for implementing their responsibilities under State-level emergency accommodation and temporary housing plans

The State EMPLAN establishes a framework for sub plans, supporting plans and related policy instruments and guidelines. It states that a supporting plan should describe the support which is to be provided to the controlling or coordinating authority during emergency operations and be an action plan which describes how an agency or functional area is to be coordinated in order to fulfill the roles and responsibilities allocated. Without this more detailed guidance being in place, there is no common reference point for individuals within an agency to refer to when implementing the broader State-level plans, such as the WSFASP.

The WSFASP defines emergency accommodation and outlines the government and non-government organisations responsible for its provision. It does not provide a detailed description of the specific roles and responsibilities related to its provision. DCJ does not have an agency-level plan in place that specifies these in more detail, and did not have any standard operating procedures (SOPs) in place to guide the process of housing displaced persons in emergency accommodation.

The absence of SOPs to guide this process can increase the chance of inconsistent implementation of the WSFASP, with a reliance on the experience of staff to complete tasks to house people in emergency accommodation. For example, at the onset of an emergency, staff in the HCC contact local accommodation venues such as hotels and motels to determine availability in the area. They may also book blocks of rooms in preparation for housing displaced persons. At the time of the flood events, there was no documentation which detailed the process for DCJ staff to follow and these tasks were not recorded anywhere as requiring completion before a disaster occurred.

DCJ has advised that they have since developed internal processes which form part of the training program for Disaster Welfare staff. In addition to this, the HCC has developed a guide which steps out the various processes relating to the provision of emergency accommodation, as well as outlining the different roles and responsibilities within the HCC in relation to these processes.

As noted, there is no State-level plan in place to guide the temporary housing response. As a result, there is no framework to guide this process at an agency level for the Reconstruction Authority. The absence of both State and agency-level plans guiding the provision of temporary housing at the time of the flood events meant that agencies were required to develop a process to follow at the same time as responding to the flood events.

Appropriate governance structures were established quickly and changed as needed to reflect recovery needs

The State Recovery Committee (SRC) was activated following the 2019–20 bushfires and was still operating at the time of the 2022 floods. As part of this, the SRC had a terms of reference which included responsibilities of the SRC and a membership list. The responsibilities of the SRC in the terms of reference are to:

• provide strategic direction in relation to disaster recovery
• oversee reconstruction and recovery efforts in disaster impacted areas
• provide senior leadership to facilitate whole-of-government coordination
• monitor and report to the Premier, Deputy Premier and Cabinet on the progress of recovery efforts in disaster impacted areas.

Once the flood events commenced on 28 February 2022, the SRC increased its meeting frequency to every two days initially, for a total of 13 meetings in March. The SRC continued to meet at least twice a week from mid-April until the end of May, at which point it reduced gradually in frequency to weekly and then fortnightly. The SRC continued to meet throughout all of 2022 and 2023.

The SRC established a range of subcommittees to assist with recovery efforts. These subcommittees were operational from March 2022 onwards. Subcommittees had terms of reference setting out their role and were chaired by appropriate agencies with operational responsibilities that aligned with those roles. The Health and Wellbeing subcommittee was established as part of this and initially had responsibility for the provision of both emergency accommodation and temporary housing. This subcommittee was chaired by a relevant Senior Executive in DCJ.

As noted above, none of the whole-of-government plans prior to the flood events allocated responsibility to an agency or subcommittee for constructing and managing temporary housing. Although temporary housing had been utilised by the government previously in response to the 2019–20 bushfires, its provision had never been implemented on the scale required in response to the flood events.

In early March, the SRC created a new subcommittee: the Housing Taskforce (HTF). The HTF contained key staff from a wide variety of agencies, as well as other key stakeholders like local councils where appropriate, and was chaired by a Senior Executive from the Planning Branch of the Department of Planning and Environment (DPE). A terms of reference was quickly developed for the subcommittee. The HTF’s initial purpose included developing a strategy for identifying locations and pathways for temporary housing. This allowed the Health and Wellbeing subcommittee and the HTF to provide more focus on their particular areas of responsibility.

The SRC helped to manage issues but did not provide strategic risk management

Subcommittees regularly reported to the SRC throughout the flood response period. The SRC was able to manage issues with these programs as they arose, often by connecting relevant staff and providing a forum for these issues to be resolved across agencies. In this way, the SRC was able to manage issues, which aligns with its role in facilitating whole-of-government coordination.

Given that all relevant agencies were represented on the SRC, it was uniquely placed to provide strategic risk management across all aspects of the recovery effort including provision of accommodation and housing following the floods. This would fall within the SRC’s role of providing strategic direction in relation to disaster recovery. Strategic risk management involves addressing external risks, including those which may impact the government’s ability to achieve its objectives. The SRC did not undertake strategic risk management to proactively identify issues that could hinder the recovery effort, such as through developing risk registers and assigning mitigation strategies to agencies or specific individuals.

In regards to the flood temporary housing response, this may have included identifying and mitigating risks that could impact on the quantity of housing provided, risks to the overall flood recovery budget, and risks related to further flood events occurring that might hinder flood recovery. While the SRC did not consider this work during the flood response, Resilience NSW and the Reconstruction Authority both documented some whole-of-government risks to the delivery of the response to natural disasters as part of their enterprise risk management processes, including throughout 2022. However, this work was not undertaken specifically in relation to the unfolding flood events, but was instead done as part of the agency's regular review of its enterprise risks. Given that only one agency was involved in this risk identification, it was not a substitute for whole-of-government risk identification through the SRC.

The HTF did undertake some separate risk identification for the temporary housing response in the Northern Rivers, but not until October 2022. The HTF had been in operation since March 2022 without undertaking formal risk assessments to determine key risks to the provision of temporary housing that required mitigation. Some of the risks identified included expenditure on temporary housing exceeding its allocated budget, temporary housing sites failing to deliver agreed outcomes, and that there would be inappropriate or ineffective engagement with Aboriginal communities. This risk identification from the HTF was also reflected in Resilience NSW's and the Reconstruction Authority’s enterprise risk registers, where it is identified that there is a risk that the agencies do not effectively deliver on short and medium term housing.

The SRC provided oversight of the work of subcommittees

As noted above, one of the roles of the SRC is to oversee reconstruction and recovery efforts in disaster impacted areas. To fulfil this role of providing oversight, the SRC received updates on the activities of each subcommittee at each meeting.

In March 2022, each subcommittee developed a 100-Day Flood Action Plan that set out actions that would be completed in the first 30, 60 and 100 days. Each subcommittee was required to update its Flood Action Plan and report progress on implementation to the SRC every two weeks. The SRC received this regular reporting from each subcommittee, which included the status of each item, actions undertaken to date, and the next steps that each subcommittee was undertaking. This served to provide the SRC with oversight of the actions of each group to supplement the subcommittee updates with greater detail.

The quality of reporting from the HTF to the SRC reduced throughout August and September 2022. At this time the updates from the subcommittee included either only a verbal update or only statistical updates on the temporary housing response. This means that throughout this period, the SRC was providing only limited oversight of the temporary housing response. From October 2022, the HTF provided more detailed updates to the SRC, providing data on the temporary housing villages including the number of dwellings, estimated capacity and the status of each of the village sites (whether operational or estimated date of construction completion).

DCJ adapted its usual procedures to house a large number of people in emergency accommodation following the Northern Rivers flood event

The HCC, a branch within DCJ, is responsible for arranging emergency accommodation during a disaster, although this responsibility was not outlined in a specific emergency accommodation plan or procedure at the time of the flood events. Once a disaster is declared, the HCC is activated for a disaster welfare response. The team is required to estimate the number of people who will be displaced by the disaster and may seek emergency accommodation. The team is also required to contact local accommodation providers such as hotels, motels and caravan parks to determine vacancy information, as well as obtain information about the facilities such as wheelchair accessibility and pet-friendly rooms. The HCC team will then make direct contact with staff at evacuation centres and facilitate bookings based on the demand. A central internal database is utilised by the HCC, which enables them to see providers and book within the system.

In following these procedures, DCJ housed 788 people in the two weeks following the initial flood event by utilising the standard local accommodation providers. On 27 April 2022, 1,440 people were reported as staying at local accommodation providers as part of the emergency accommodation response. Exhibit 5 shows the number of people housed in emergency accommodation across the North Coast from March 2022 to early April 2023.

Governance structures continued to operate as previously established in response to the Central West flood event

The governance structures established in response to the 2019–20 bushfires and the flood event in the Northern Rivers mostly operated in the same capacity for the management of the Central West flood event. In October 2022, the meeting frequency for the SRC reduced to fortnightly, following the same structure with subcommittee updates discussed as part of the agenda. There was no increase in meeting frequency during or in the immediate aftermath of the response to the Central West flood event.

Resilience NSW continued to document whole-of-government risks to the delivery of the response to natural disasters during the response to the Central West flood event, and this work was continued by the Reconstruction Authority once established. Resilience NSW also continued to develop risk dashboard heatmaps each quarter, monitoring any changes in the residual risk rating of these risks, as well as outlining issues identified, and any new and emerging risks.

DCJ housed displaced persons in the Central West quickly, considering additional needs during the process

DCJ, through the HCC, advised that it followed its standard process outlined above for the provision of emergency accommodation during the Central West flood event. The evacuation order for Eugowra was made on 15 November 2022, and by 8 December 2022, DCJ had housed 93 people from the community in emergency accommodation. The HCC was able to utilise alternative accommodation such as rooms at Charles Sturt University to meet the increasing demand for emergency accommodation in the Central West.

Through the initial consultation process conducted with displaced persons at evacuation centres, the HCC was also able to consider their additional needs and meet these where possible. For example, companion animals were supported by Local Land Services and the Royal Society for the Prevention of Cruelty to Animals through the provision of boarding services. DCJ advised that local needs were also considered as part of the intake process. For example, displaced persons were accommodated as close to their hometown as possible. Those evacuated from Forbes were given priority for emergency accommodation in Forbes. This did impact evacuees from other towns. Ordinarily, those displaced in Eugowra would also be housed in Forbes, but due to limited accommodation options, they were evacuated to Orange instead. Other considerations made for displaced persons included level access and accessible rooms for those with disabilities, and baby care items, such as cots, where required.

The At-home Caravans program was implemented as immediate shelter for displaced persons awaiting pods on their property in the Central West

By 28 November 2022, Resilience NSW made the decision to activate the At-home Caravans program in the Central West, with applications from displaced persons being taken within a week after the flood event in Eugowra. Caravans were temporarily set up on private properties in Eugowra. Displaced persons are able to live in these caravans while waiting for a pod to be installed on their property. By 10 January 2023, 102 caravans had been delivered to the Central West and started to be located on private properties. At 30 May 2023, Resilience NSW had delivered 124 out of the 129 required caravans to properties. A plan was implemented to provide immediate shelter in the community through the caravans, organise medium-term housing in the form of pods, and support displaced persons to repair or rebuild their homes. Caravans were provided to households where properties required demolition, those that were damaged but reparable, and rental properties with owner’s consent.

Other options for immediate shelter were considered but not progressed. Placing caravans on site at showgrounds or caravan parks was considered, however a NSWPW assessment found that 95% of impacted homes could accommodate caravans on property. Caravans on property require less ongoing case management, site works and utilities. Private farm house rental accommodation was also considered, however extremely low availability of these in the area resulted in the decision to not progress this option.

Resilience NSW was able to meet the demand for housing in the Central West by placing temporary housing on people’s property

Resilience NSW conducted early analysis of potential temporary housing village sites in the aftermath of the floods in the Central West. However, after reviewing the situation in Eugowra and the relatively larger blocks, it was decided a more appropriate solution would be to place temporary pods on private property. Part of this decision was the impact a centralised village located in Eugowra would have on displaced persons from other affected towns. At 30 May 2023, 59 out of 100 pods had been installed on private properties. These pods replaced caravans initially installed on private properties, although at the time of the audit some disaster-affected persons were still living in caravans while they wait for pod installation on their property.

Resilience NSW was able to utilise the excess pods from the Northern Rivers to reduce the wait time for displaced persons to move into the pod from the caravan located on their property. Once their eligibility had been confirmed, the resident met with NSWPW and the builders contracted to install the pods. The resident confirmed where they would like the pod placed and the size needed. Applicants were then prioritised by Resilience NSW and pods installed in order of this prioritisation. NSWPW engaged the same third-party contractor used in the Northern Rivers construction to expedite the installation process.

Resilience NSW used measures to adapt the pods for suitable use in the Central West, as well as configuring them to meet mobility needs of residents. Cabonne Shire and Forbes Shire Councils required pods to be built at a height of 1.5 metres. The pods were therefore installed on scaffolding to raise their height. As the pods were designed and constructed for the Northern Rivers climate, insulation was installed on the base of the pods to ensure the inside temperature was appropriate for residents in the Central West. The raised height of the pods also impacted their accessibility, so the contractor was also engaged to install ramps instead of stairs where needed.

The first demobilisation of a pod occurred on 7 August 2023, after the resident’s home had been repaired and it was suitable for them to move back home. The Reconstruction Authority advised that as pods continue to be demobilised, they will be cleaned, any required repairs completed, and then moved onto the next property as needed. There was no long-term plan initially developed for the transition of tenants out of temporary housing, although the Reconstruction Authority has advised that the newly developed Temporary Housing Plan will include these considerations to inform processes at the end of the lease period. There has been consideration for returning the pods to the Northern Rivers once the work in the Central West is complete.

The Reconstruction Authority advised that due to the delays residents are facing in accessing trades and payment of insurance claims, the HTF is currently seeking the support of councils to extend the placement of pods beyond the two years that were initially planned.

There was no clear process in place to support displaced persons in emergency accommodation who were ineligible for temporary housing in the Central West

The WSFASP in place during the flood events did not outline a transition plan for displaced persons staying in emergency accommodation. Resilience NSW took over responsibility for the transition of displaced persons from emergency accommodation to temporary housing. It was not always possible to house rental tenants by placing a pod on the property they were occupying because they were unable to obtain landowner permission. It was necessary to find an alternative property to install these pods, usually on property owned by a family member. This was able to address most tenants’ issues.

It was unclear which agency was responsible for the support of renting households in the medium to long-term. The lack of a documented process for the provision of emergency accommodation created a gap in relation to the support for displaced persons. The WSFASP has since been updated to include provision for coordinated case management support to assist people in emergency accommodation with longer-term housing needs.

DCJ maintained a list of displaced persons who had been staying in emergency accommodation and were unable to exit without assistance. This list was provided to Resilience NSW weekly. Resilience NSW provided updates to DCJ on the status of those who were being transitioned into temporary housing, but no assistance was provided by Resilience NSW to those who were ineligible for temporary housing. DCJ was therefore required to provide case management to these people to assist in their transition to more stable housing.

Agencies learned and applied lessons from the Northern Rivers floods to the Central West flood event, but most have not formalised these for future consideration

Agencies involved in the provision of emergency accommodation and temporary housing learned key lessons from the Northern Rivers floods that could be applied in the Central West response. These lessons included the Reconstruction Authority rapidly standing up the At-home Caravans Program to provide immediate accommodation to displaced persons, and instigating a community reference group to provide feedback on the proposed housing response plan. These lessons learned were largely undocumented, with many staff being involved across both the Northern Rivers and Central West flood response, and able to directly apply lessons learned from their experience in the earlier response. It is good practice to formalise lessons learned to ensure that future responses may have access to contemporary information to learn from both positive and negative experiences in previous situations.

DCJ and Premier’s Department (PD) have not yet documented any lessons learned from their roles in the flood events. Some lessons were documented by Resilience NSW in April 2022 as part of a process to identify emerging insights. These lessons covered a broad range of activities, including findings relevant to the provision of temporary housing.

In June 2023, the Reconstruction Authority formally documented its own lessons learned from the provision of temporary housing. This includes identifying actions to avoid repeating some of the negative experiences, such as Aboriginal communities not being consulted at the appropriate time, and not having adequate program design processes in place for the temporary housing program. In addition, NSWPW has commissioned an evaluation of its work in the construction and provision of temporary housing, which includes a formal lessons learned component.

External reviews have also been conducted and have captured interim lessons learned, including the 2022 NSW Flood Inquiry and the ‘Response to major flooding across New South Wales in 2022’ Parliamentary Inquiry.

Agencies are in the process of evaluating the provision of emergency accommodation and temporary housing

Agencies have commenced the process of evaluating their role in the provision of emergency accommodation and temporary housing. DCJ advised that an external evaluation would commence shortly and that it was in the process of engaging a consultancy firm to conduct this. NSWPW has also commenced an external review of its provision of temporary housing. DPE and PD have not commenced a review, although PD has established a new unit for strategic communications during disasters in response to the agency's involvement in crisis communications during the flood events. This unit has been developed to deliver overarching whole-of-government messaging during disaster events.

Similarly, the Reconstruction Authority advised that an evaluation was planned for the provision of temporary housing. In addition, Resilience NSW commissioned an evaluation of the use of the Minderoo Foundation pods in response to the 2019–20 bushfires. This review reported in November 2022, though it had limited consideration of the role of the Minderoo Foundation pods as a source of temporary housing in the Northern Rivers. This report made 19 recommendations to the Reconstruction Authority and the Minderoo Foundation, and found that the Minderoo pods had largely been delivered in line with the original intended objectives.

There is no State-wide process in place to capture lessons learned from all agencies involved in recovery

Each year, the SEMC conducts a State-wide lessons learned exercise, incorporating learnings from all of the emergency events in the previous year. This exercise has commenced for the 2022 emergency events, however at the time of the audit it was in draft and not yet formally endorsed by the SEMC.

The agencies involved in the State lessons learned process are agencies with emergency response responsibilities. The findings largely relate to these response activities, with very few lessons learned relating to recovery. Only a limited number of agencies are involved in this activity, and the 2022 review did not incorporate the views of a number of agencies that were involved in the recovery phase of the Northern Rivers and Central West flood events.

While it is important that lessons are learned from the response phase of an emergency, it is equally important that State-wide lessons are learned from the recovery phase to ensure that appropriate State-wide changes can be made, or positive experiences can be continued. There is currently no process in place to capture these lessons learned from the recovery phase from all agencies involved in the recovery phase.

Appendix one – Responses from entities

Appendix two – About the audit

Appendix three – Performance auditing

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Parliamentary reference - Report number #389 - released 22 February 2024

What this report is about

Results of the Regional NSW financial statements audits for the year ended 30 June 2023.

What we found

Unqualified audit opinions were issued on all completed audits in the Regional NSW portfolio agencies.

The number of monetary misstatements identified in our audits increased from 28 in 2021–22 to 30 in 2022–23.

What the key issues were

Effective 1 July 2023, staff employed in the Northern Rivers Reconstruction Corporation Division of the Department of Regional NSW transferred to the NSW Reconstruction Authority Staff Agency.

The Regional NSW portfolio agencies were migrated into a new government wide enterprise resourcing planning system.

The total number of audit management letter findings across the portfolio of agencies decreased from 36 to 23.

A high risk matter was raised for the NSW Food Authority to improve the internal controls in the information technology environment including monitoring and managing privilege user access.

What we recommended

Local Land Services should prioritise completing all mandatory early close procedures.

Portfolio agencies should:

• ensure any changes to employee entitlements are assessed for their potential financial statements impact under the relevant Australian Accounting Standards
• prioritise and address internal control deficiencies identified in audit management letters.

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

• financial reporting
• audit observations.

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

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

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

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

Appendix one – Misstatements in financial statements submitted for audit

Appendix two – Early close procedures

Appendix three – Timeliness of financial reporting

Appendix four – Financial data

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

What this report is about

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

What we found

Unqualified audit opinions were issued for all Premier and Cabinet portfolio agencies.

What the key issues were

The Administrative Arrangements Orders, effective 1 July 2023, changed the name of the Department of Premier and Cabinet to the Premier's Department and transferred parts of Department of Premier and Cabinet to The Cabinet Office.

The number of monetary misstatements identified in our audits decreased from 15 in 2021–22 to 12 in 2022–23.

The total number of management letter findings across the portfolio of agencies increased from ten in 2021–22 to 20 in 2022–23.

Thirty per cent of all issues were repeat issues. The most common repeat issues related to deficiencies in controls over financial reporting.

What we recommended

Portfolio agencies should:

• ensure any changes to employee entitlements are assessed for their potential financial statements impact under the relevant Australian Accounting Standards
• prioritise and address internal control deficiencies identified in Audit Office management letters.

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

• financial reporting
• audit observations.

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

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

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 Premier and Cabinet portfolio.

Appendix one – Early close procedures

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

What the report is about

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

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

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

What we found

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

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

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

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

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

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

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

We made recommendations about

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

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

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

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

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

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

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

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

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

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

About this Audit

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Paging

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

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

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

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

Decommissioning costs

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

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

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

This estimated cost is not included in the CCEP budget.

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

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

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

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

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

Both totals include:

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

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

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

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

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

Appendix one – Response from agency

Appendix two – Trunked public safety radio networks

Appendix three – About the audit

Appendix four – Performance auditing

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

Parliamentary reference - Report number #383 - released 23 June 2023

Click here for the Easy English version of the report highlights

The Easy English version of the report highlights is intended to meet the needs of some people with lower literacy skills, some people with an intellectual disability, and some people from different cultural backgrounds.

The Easy English document is not the final audit report that has been prepared and tabled in NSW Parliament under s.38EB and s.38EC of the Government Sector Audit Act 1983. It should not be relied on or quoted from as the final audit report.

What this report is about

This audit assessed whether NSW Trustee and Guardian is effectively delivering public guardianship and financial management services in line with legislative requirements and standards.

What we found

NSW Trustee and Guardian is delivering guardianship and financial management services in line with its broad legal authority.

However, NSW Trustee and Guardian does not have sufficient oversight to ensure that its services are consistent with legislative principles which aim to promote positive client outcomes.

The agency's governance and practices could be better supported by relevant training and guidance to account for the diversity of its clients.

It does not track the actual costs of service delivery, the quality of services or client experiences and key findings from previous reviews remain unresolved.

Government funding for public guardianship services and direct financial management services for low-wealth clients has not kept pace with the growth in clients.

There is a risk that some fee-paying clients are unknowingly subsidising others.

NSW Trustee and Guardian has applied additional funding to increase frontline staff, but gaps in monitoring and IT system constraints create a risk that it will not address service quality issues, nor be able to demonstrate the impact of this new funding.

What we recommended

We recommended that NSW Trustee and Guardian:

• Broaden governance arrangements to enable input to key decisions from people with lived experience, relevant peak bodies and representatives of diverse communities.
• Implement mechanisms to seek feedback on the effectiveness and quality of services from clients under orders.
• Assess staff competency and implement regular training in effectively serving clients with disability, dementia, mental illness, cognitive impairments and other factors relevant to decision-making incapacity.
• Implement a risk-based quality framework to assess whether public guardian and financial management decisions are in line with policy and the legislative principles.
• Improve data collection and monitoring to track performance, the costs to serve, and client outcomes and report on these publicly.

NSW Trustee and Guardian is a NSW Government agency in the Stronger Communities cluster. It supports the NSW Trustee and the Public Guardian in the exercise of their statutory functions. It is accountable to the relevant Minister, the Attorney General.

The legislative responsibilities for the Public Guardian and the NSW Trustee are provided in separate statutes (NSW Trustee and Guardian Act 2009 and Guardianship Act 1987). Together, these establish a number of functions and services that NSW Trustee and Guardian as an agency is expected to deliver, including:

• acting as executor and administrator of deceased estates
• acting as a trustee responsible for managing trust property on behalf of another person or organisation in line with the trust terms
• drafting Will, Power of Attorney and Enduring Guardianship instruments, and educating the community about the importance of having these documents in place
• making decisions on behalf of people under guardianship or financial management orders as a guardian or a financial manager 'of last resort', or overseeing and assisting private financial managers.

This audit focuses on the last of these - NSW Trustee and Guardian's financial management and guardianship services.

The NSW Trustee and the Public Guardian are appointed to provide direct financial management and/or guardianship services (respectively) to over 13,300 people (as at 30 June 2022) who are deemed by a court or tribunal unable to manage their own affairs. This involves making decisions for people under a relevant court or tribunal order, within the terms of the order. The court or tribunal order enables the appointed guardian or financial manager to make decisions on behalf of the person for whom the order is made. The legislation allows the financial manager or guardian to exercise all the functions of the person under management has or would have were they not incapable of managing for themselves. From a legal perspective, these 'substitute decisions' have the same effect as if the person had made the decision themselves. While the legal presumption is that a person has capacity to care for themselves and manage their own affairs, a financial manager or guardian can be appointed without the person's consent if the court or tribunal finds the person does not have relevant decision-making capacity.

There can be a range of factors that impact on a person's decision-making capacity, including cognitive impairment, intellectual disability, dementia, mental illness and addiction. Guardianship (of both the person and their estate) developed as a response, through European and English law over hundreds of years. In Australia, it was a function of the Supreme Court of NSW before the establishment of government agencies. What is now known as substitute decision-making can sometimes be referred to as a 'protective' function because:

• it relates to decisions or actions that need to be taken, which the person under an order cannot take because they are incapable of managing their own affairs
• due to this lack of competence, the person may be disadvantaged in the conduct of their affairs (for example, their money or property may be dissipated or lost, they may enter agreements unwisely or they may be at risk of abuse or exploitation)
• substitute decisions must be made in the best interests of the person on whose behalf they are made.

An alternative model is 'supported decision-making'. This refers to processes and approaches that assist people with impaired decision-making capacity to exercise their autonomy and legal capacity by supporting them to make decisions. This approach seeks to give effect to the will and preferences of the person requiring decision-making support wherever possible, including decisions involving risk. There has been a longstanding legal and community push for Australian guardianship and administration systems to move from substituted to supported decision-making. However, the legislation in New South Wales provides for 'best interests' substitute decision-making and this is the framework against which we have audited NSW Trustee and Guardian.

The Public Guardian and the NSW Trustee may be appointed as substitute decision makers by the NSW Civil and Administrative Tribunal (NCAT) and the Supreme Court. The NSW Trustee may also be appointed by the Mental Health Review Tribunal for financial management orders only.¹ They are intended to be appointed as a 'last resort' when there is no one willing or suitable to fill the role, or there is significant family conflict regarding decision-making for the person. The Public Guardian and the NSW Trustee cannot refuse to accept a court or tribunal appointment to administer an order for guardianship or financial management.

Public Guardian decisions cover healthcare, lifestyle, accommodation and/or medical decisions such as where a person should live (for example: at home, in an aged care facility or disability group home), what disability or other support services they receive, who can have access to them (for example: through establishing visiting schedules between conflicting family members) and consent to the use of restrictive practices on the advice of independent experts (for example: seclusion, chemical restraint such as anti-psychotic medication, environmental restraints such as limiting access to knives).

Under a financial management order where the NSW Trustee is appointed as financial manager, the NSW Trustee carries out such functions as securing and collecting assets, income and entitlements, paying expenses, debts and designing budgets, investing financial assets, lodging tax returns and paying maintenance for dependents, taking or defending legal proceedings and managing other financial and legal affairs for the person. This is referred to as direct financial management.

A court or tribunal may appoint a private financial manager, such as a family member, friend, private trustee company or other commercial provider. Where a private manager is appointed, the NSW Trustee provides authorisation and directions to the private manager and oversees their performance. As at 30 June 2022, over 6,200 people had private managers.

As an agency, the majority of NSW Trustee and Guardian's overall revenue is from fees (including for services outside the scope of the audit, such as will preparation) and investments. The remainder is from the NSW Government as funding for non-commercial services including guardianship services and subsidised financial management services for low-wealth clients. Public guardian clients do not pay fees. Financial management clients pay fees, but these are subsidised where the client does not have capacity to pay full fees. NSW Trustee and Guardian is considered a self-funded agency by NSW Treasury definitions.

Demand for financial management and guardianship services, and the complexity of clients' circumstances for these services, has grown over the last decade. In November 2020, NSW Trustee and Guardian advised the Attorney General that it had run an operating deficit in 2019–20 driven by an increase in non/low fee paying customers and an increase in the complexity of matters. NSW Trustee and Guardian advised the Attorney General that government funding was no longer meeting the full cost of guardianship services, and of direct financial management services for people with low balances. NSW Trustee and Guardian's analysis had identified a shortfall in government funding of $8.4 million in 2019–20 that was expected to increase over the forward estimates. A working group was established with officers from NSW Trustee and Guardian, NSW Treasury and the Department of Communities and Justice to advise the government on options for improving the financial sustainability of NSW Trustee and Guardian overall.

NSW Trustee and Guardian subsequently received a funding boost of $41.5 million across four years in the 2021–22 State Budget. NSW Trustee and Guardian applied the majority of the budget enhancement to recruit approximately 120 new roles mostly in financial management and guardianship services.

The objective of this audit was to assess whether NSW Trustee and Guardian is effectively delivering guardianship and financial management services in line with legislative requirements and relevant non-legislative standards. These include a legislative duty to observe certain principles when exercising the relevant legislative functions, including to: give primary consideration to clients’ welfare and interests, restrict their freedom of decision and action as little as possible, take account of their views, and encourage their self-reliance.

The audit was guided by three questions:

• Does NSW Trustee and Guardian align its service delivery with its legislative functions and principles, and relevant standards?
• Does NSW Trustee and Guardian drive and monitor performance to give effect to its legislative functions and principles, and relevant standards?
• Has NSW Trustee and Guardian effectively planned the use of additional funding to improve service delivery and adherence to its legislative functions and principles, and relevant standards?

The audit review period was the five years between 1 July 2017 - 30 June 2022.

Throughout this report:

• 'client' refers to a person who is under a guardianship order and/or whose estate is under financial management, for whom the Public Guardian and/or the NSW Trustee is appointed to act or responsible to oversee their private financial manager
• 'financial management' refers to clients under financial management orders (direct and private financial management) and/or the services provided by NSW Trustee and Guardian to these clients or their private managers
• 'guardianship' refers to clients under guardianship orders where the Public Guardian is appointed, and/or the services provided by the Public Guardian to these clients
• 'frontline staff' refers to the staff responsible for engagement with, and decision-making for, clients and private managers (titled client service officers, senior client service officers and principal client service officers in NSW Trustee and Guardian)
• Aboriginal refers to the First Nations peoples of the land and waters now called Australia and includes Aboriginal and Torres Strait Islander peoples.

NSW Trustee and Guardian has only recently identified measures to track the performance of its financial management and guardianship services

Between 2021 and 2022, NSW Trustee and Guardian developed new divisional key performance indicators which aim to track the quality of services delivered to people under financial management and guardianship orders. These measures are reported quarterly to the organisation's executive leadership team. The divisions have started measuring some of these new performance indicators, but many will require changes to consumer engagement processes and IT legacy systems to collect additional data. At this stage it is unclear when these necessary changes will occur, and when relevant data will begin to be collected and analysed.

Before 2021, NSW Trustee and Guardian measured the performance of some of its financial management and guardianship operational processes. While these operational measures identify whether it is fulfilling some of its legislative functions, they are predominantly activity measures and do not inform on the quality of decision-making for direct financial management or guardianship clients, or on client experiences and outcomes.

Operational performance targets and measures have only recently been developed and used to centrally track the time elapsed between requests for certain decisions and the decisions made or relevant actions taken by relevant frontline staff. Baseline data for these measures show that target timeframes are not close to being met for minor medical decisions for people under guardianship orders, or for first customer payment, and redirection of income for people who are directly financially managed.

NSW Trustee and Guardian has proactively developed a benefits realisation framework to monitor the expected benefits from the additional funding received in 2021–22

NSW Trustee and Guardian has developed a benefits realisation framework to monitor the expected benefits from the additional funding (and other elements of the budget bid including increased fees and business improvements for efficiencies). This is not a requirement imposed by NSW Treasury, but a proactive step taken by NSW Trustee and Guardian to account for the use of the additional funding and to attempt to identify its impacts.

The benefits realisation framework includes interim and preferred measures, which reflect the things that can be tracked with existing data, and those that require new data collection, respectively. The measures are underpinned by separate program logics for direct and private financial management, and guardianship, and an overall investment logic. 'Logics' articulate the inputs, outputs and short/medium/long term outcomes expected from a project, program or investment, as well as the underpinning assumptions about how desired changes will occur (the 'mechanism' or 'theory' of change).

The targets and measures for NSW Trustee and Guardian's benefits realisation framework are the responsibility of the organisational divisions delivering guardianship and financial management services. The baseline data against which change will be measured is 30 June 2021, as the budget enhancement funds were allocated from 1 July 2021. The audit has been provided with baseline data, but not first year results (covering 2021–22) and as such, cannot assess whether any progress has been made towards the targets.

The benefits realisation framework may not provide the information needed to demonstrate the effectiveness of the budget enhancement

A lack of available data and limited measures in the benefits realisation framework may mean NSW Trustee and Guardian will not be able to meaningfully assess the impact of the additional funding.

The 22 measures in the benefits realisation framework across guardianship and financial management functions are predominantly monitoring activity and outputs which seek to track staff caseloads, the number of decisions made, the timeliness of key actions/tasks, and annual consumer engagements.

There is one service quality outcome measure: that customers, family and carers report an improved experience. The metrics for this measure will initially be monitored using the whole-of-government customer satisfaction measurement survey administered by the Department of Customer Service, until such time as other additional sources are developed. The whole-of-government survey is built around six core customer commitments relating to respondents' experiences with government services and staff - that they are: 'easy to access, act with empathy, respect my time, explain what to expect, resolve the situation and engage the community'. It is not clear whether or how the whole-of-government survey targets and engages people with impaired decision-making capacity or accessible communication needs.

Some measures in the NSW Trustee and Guardian benefits realisation framework do not yet have targets set, such as the ratio of the number of clients to the number of guardians or financial managers. Many relate to compliance with internal operational policies.

One interim measure for a direct financial management service indicator is 'increased personalised face-to-face consultations by phone or virtually'. It is intended to be replaced with the preferred measure 'ensure the client’s story is understood by staff and systems by consulting stakeholders and adding to the client’s story in the IT system'. However, the interim measure would better align with the national standards regarding regular and accessible engagement (discussed above).

A lack of availability of key data to track the preferred measures was identified by NSW Trustee and Guardian as an enterprise risk, and issues with existing data collected were identified early on, including that:

• data can be entered into systems inconsistently by staff
• current systems mask some issues – for example, a task can be completed within internal timeframes but not reflect the actual waiting time of consumers
• current systems cater to measuring outputs rather than service quality.

IT system improvements are slated in order to allow data to be collected to inform on preferred measures, but these depend on capital funding that has not yet been secured. At the time of writing, data sources were yet to be identified for three of the 22 measures, and NSW Trustee and Guardian did not have staff trained and available to run and analyse data for the benefits realisation framework.

The mechanisms of change and the underlying assumptions in the program and investment logics are also not clearly articulated in the benefits realisation framework, and nor is the underpinning evidence (such as from earlier reviews, research or pilots, or experiences elsewhere). Identifying and evidencing these would give some confidence that the assumptions are sound and that the mechanisms of change will operate as expected (for example, that a decline in frontline staff caseloads will translate into more time spent on individual matters, and improved service quality).

Given these limitations in measures, data collection and logics, there is a risk that the benefits realisation framework may not provide the performance and impact evidence necessary to assess the effectiveness of the budget enhancement, or to justify further additional funding in the future.

NSW Trustee and Guardian cannot track its financial management and guardianship service performance over time

NSW Trustee and Guardian's operational performance activity measures have changed over the audit review period, which limits NSW Trustee and Guardian’s ability to identify whether it has sustained or improved performance in its guardianship and financial management services over time.

NSW Trustee and Guardian has consistently tracked the number and themes of complaints about financial management and guardianship services, which do provide some insight into service quality and experiences. However, this is an incomplete measure as people under financial management and guardianship orders are a more vulnerable cohort than other NSW Trustee and Guardian customers and may require support to make a complaint. There is also a structural power imbalance between clients and their guardian or financial manager which may dissuade clients and their stakeholders from raising concerns. Therefore, it is not clear whether the numbers and themes in complaints received are representative of broader experiences.

Appendix one – Response

Appendix two – Client characteristics

Appendix three – Easy English, Easy Read and Plain English formats

Appendix four – Financial management fees

Appendix five – NSW Trustee and Guardian Common Funds

Appendix six – About the audit

Appendix seven – Performance auditing

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Parliamentary reference - Report number #379 - released 18 May 2023

What the report is about

Sydney Metro is Australia’s largest public transport project. It requires the acquisition of many private properties, including residential and business properties.

This audit assessed the effectiveness of the acquisition of private properties for the Sydney Metro project. The audited agencies were Sydney Metro, the Department of Planning and Environment (Valuer General NSW) and Transport for NSW (the Centre for Property Acquisition).

The audit assessed agencies against the framework for property acquisitions in New South Wales. It did not re-perform the valuations done for individual properties that were acquired by Sydney Metro.

What we found

Acquisitions of private property for the Sydney Metro project were mostly effective in the sample of acquisitions we assessed. We found Sydney Metro:

• complied with legislative and policy requirements for compensation and communication with people subject to property acquisitions
• kept accurate records of its acquisitions and applied probity controls consistently
• did not complete detailed plans or negotiation strategies for the high-risk and high-value acquisitions we reviewed
• did not comply with legislative timelines for most compulsory acquisitions because of delays in receiving the required information from the Valuer General in these cases.

The Centre for Property Acquisition has overseen the implementation of reforms to residential acquisition processes, but its assessment of the effectiveness of these reforms has not been comprehensive.

What we recommended

The audit made four recommendations to the audited agencies to improve:

• plans and strategies for the acquisition of high-risk and high-value properties
• timeliness of issuing compensation determinations for compulsory acquisitions
• data quality on the experience of people subject to property acquisitions.

The NSW Government has the power to acquire land that is owned or leased by individuals or businesses, if it is needed for a public purpose. The power arises from the Land Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Act). Government agencies that have the power to compulsorily acquire private property are referred to as ‘acquiring authorities’. People who are subject to acquisitions are referred to as ‘affected parties’ and include property owners (business or residential), businesses with a commercial lease on a property, or individuals with residential tenancy leases. In recent years, the vast majority of acquisitions by the NSW Government have been for public transport or road projects.

Sydney Metro is a NSW Government agency with responsibility for building the Sydney Metro railway project. Sydney Metro is Australia’s largest public transport project. The project requires the acquisition of a large number of private properties. Sydney Metro has been one of the largest acquirers of private property in recent years, completing over 500 acquisitions between 2020 and mid-2022, with a total acquisition value of over $2 billion. Other agencies and statutory officers involved in the acquisition of property for the Sydney Metro project include:

• the Department of Planning and Environment (DPE), which supports the minister responsible for the Just Terms Act. DPE also provides staff to the Valuer General of NSW
• the Valuer General of NSW, an independent statutory officer that determines compensation in cases where the acquiring authority and the affected party cannot agree on compensation for property that has been acquired
• Transport for NSW, which includes the Centre for Property Acquisition (CPA). The CPA does not have a direct role in acquiring properties, but its responsibilities include developing guidance for acquiring agencies and monitoring and reporting on their activities.

About this audit

The objective of this audit was to assess the effectiveness of acquisitions of private properties for Sydney Metro projects. The audit assessed agencies against the legislative and policy requirements in place for government acquisitions of private property in New South Wales. In line with the Audit Office's legislative mandate, the audit does not comment on the merits of the policy objectives reflected in the Just Terms Act.

The audit examined a sample of 20 property acquisitions. This was not a statistically representative sample. While our report provides comments on Sydney Metro’s overall acquisition processes, it does not provide assurance regarding the acquisitions that were not examined for this audit.

The audit did not re-perform the valuations done for individual properties that were acquired by Sydney Metro. Affected parties who disagree with the valuation of their property have the right to seek independent assessment of this via the Valuer General and the Land and Environment Court.

This chapter presents our findings on Sydney Metro's acquisition of industrial and commercial properties. Industrial properties include construction businesses and manufacturing facilities. Commercial properties were mostly properties such as shopping centres and office towers. Many of these acquisitions involve businesses and properties that are relatively complex and have high values. This means the valuation process can require multiple experts and can be lengthy and contested. Adherence to governance and probity requirements is important for these acquisitions in order to demonstrate that the acquiring authority has achieved value for money.

This chapter presents our findings on Sydney Metro's acquisition of residential properties, which include apartments and houses, and small business leases, which mostly affected businesses in small shopping centres or arcades. Most of these acquisitions were lower value compared to industrial and commercial property acquisitions and did not require as much expert advice on complex technical issues. However, residential property acquisitions can be personally distressing for the affected parties and require staff from the acquiring authority to provide support and show empathy while ensuring legislative compliance and value for money.

Appendix one – Responses from agencies

Appendix two – About the audit 

Appendix three – Performance auditing 

Copyright notice

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

Parliamentary reference - Report number #375 - released 9 February 2023

What the report is about

Results of the Stronger Communities cluster agencies' financial statement audits for the year ended 30 June 2022.

What we found

Unqualified audit opinions were issued on all completed 30 June 2022 financial statement audits. One audit is ongoing.

All 13 cluster agencies that have accommodation arrangements with Property NSW derecognised right-of-use assets and lease liabilities of $917 million and $1 billion respectively. The agencies also collectively recorded a gain on derecognition of $136 million.

The Department of Communities and Justice (the department) assumed the responsibility for delivery of the Process and Technology Harmonisation program from the Department of Customer Service. In 2021–22, the department incurred costs of $42.8 million in relation to the project, which remains ongoing.

The number of monetary misstatements identified during the audits decreased from 50 in 2020–21 to 48 in 2021–22.

What the key issues were

Six of the 15 cluster agencies required to submit 2021–22 mandatory early close procedures did not meet the statutory deadlines. One agency did not complete all mandatory procedures.

Five high-risk findings were identified in 2021–22. They related to deficiencies in:

• user access administration at the department, NSW Rural Fire Service and New South Wales Aboriginal Land Council (NSWALC)
• segregation of duties at the NSW Trustee and Guardian and NSWALC.

Recommendations were made to those agencies to address these control deficiencies.

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

• financial reporting
• audit observations.

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

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

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.

Appendix one – Misstatements in financial statements submitted for audit

Appendix two – Early close procedures

Appendix three – Timeliness of financial reporting

Appendix four – Financial data

Copyright notice

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

What the report is about

Result of the Premier and Cabinet cluster financial statement audits for the year ended 30 June 2022. 

What we found

Unmodified audit opinions were issued for all Premier and Cabinet cluster agencies.

The machinery of government changes within the Premier and Cabinet cluster resulted in the transfer of net assets of $1 billion from the Department of Premier and Cabinet.

The Department of Premier and Cabinet, Public Service Commission and Parliamentary Counsel's Office accepted changes to their office leasing arrangements managed by Property NSW. These changes resulted in the collective de-recognition of $167.3 million of right-of-use assets, $225.1 million in lease liabilities and recognition of $47.8 million of other gains/losses. 

What the key issues were

The number of issues we reported to management decreased. 

Forty per cent of issues were repeated from the prior year.

Four moderate risk issues were reported in the management letters for Department of Premier and Cabinet and New South Wales Electoral Commission. Three out of the four moderate risk issues were repeat issues. 

The repeat issues related to internal control deficiencies in agencies' including lack of updated procurement policies and procedures and information technology general controls.

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

• financial reporting
• audit observations.

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

This chapter outlines our audit observations related to the financial reporting of agencies in the Premier and Cabinet cluster for 2022.

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 Premier and Cabinet cluster.

Appendix one – Early close procedures

Copyright notice

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

What the report is about

In this report, we have analysed the key findings and recommendations from our audit reports over the past four years.

This analysis includes financial audits, performance audits, and compliance audits of state and local government entities that were tabled in NSW Parliament between July 2018 and February 2022.

The report is framed by recognition that the past four years have seen significant challenges and emergency events.

The scale of government responses to these events has been wide-ranging, involving emergency response coordination, service delivery, governance and policy.

The report is a resource to support public sector agencies and local government to improve future programs and activities.

What we found

Our analysis of findings and recommendations is structured around six key themes:

• Integrity and transparency
• Performance and monitoring
• Governance and oversight
• Cyber security and data
• System planning for disruption
• Resource management.

The report draws from this analysis to present recommendations for elements of good practice that government agencies should consider in relation to these themes. It also includes relevant examples from recent audit reports.

In this report we particularly call out threats to the integrity of government systems, processes and governance arrangements.

The report highlights the need for balanced advice to government on options and risks, for transparent documentation and reporting of directions and decisions, and for early and open sharing of information with integrity bodies and audit.

A number of the matters highlighted in this report are similar to those described in our previous Insights Report, (Performance Audit Insights: key findings from 2014–2018) specifically in relation to cyber and information security, to performance measurement, reporting and evaluation, and system and workforce planning and capability.

I am pleased to present the Audit Insights 2018–2022 report. This report describes key findings, trends and lessons learned from the last four years of audit. It seeks to inform the New South Wales Parliament of key risks identified and to provide insights and suggestions to the agencies we audit to improve performance across the public sector.

The report is framed by a very clear recognition that governments have been responding to significant events, in number, character and scale, over recent years. Further, it acknowledges that public servants at both state and council levels generally bring their best selves to work and diligently strive to deliver great outcomes for citizens and communities. The role of audit in this context is to provide necessary assurance over government spending, programs and services, and make suggestions for continuous improvement.

A number of the matters highlighted in this report are similar to those described in our previous Insights Report, (Performance Audit Insights: key findings from 2014–2018) specifically in relation to cyber and information security, to performance measurement, reporting and evaluation, and system and workforce planning and capability.

However, in this report we particularly call out threats to the integrity of government systems, processes and governance arrangements. We highlight the need for balanced advice to government on options and risks, for transparent documentation and reporting of directions and decisions, and for early and open sharing of information with integrity bodies and audit. Arguably, these considerations are never more important than in an increasingly complex environment and in the face of significant emergency events and they will be key areas of focus in our future audit program.

While we have acknowledged the challenges of the last few years have required rapid responses to address the short-term impacts of emergency events, there is much to be learned to improve future programs. I trust that the insights developed in this report provide a helpful resource to public sector agencies and local government across New South Wales. I would be pleased to receive any feedback you may wish to offer.

Margaret Crawford
Auditor-General for New South Wales

This report brings together a summary of key findings arising from NSW Audit Office reports tabled in the New South Wales Parliament between July 2018 and February 2022. This includes analysis of financial audits, performance audits, and compliance audits tabled over this period.

• Financial audits provide an independent opinion on the financial statements of NSW Government entities, universities and councils and identify whether they comply with accounting standards, relevant laws, regulations, and government directions.
• Performance audits determine whether government entities carry out their activities effectively, are doing so economically and efficiently, and in accordance with relevant laws. The activities examined by a performance audit may include a selected program or service, all or part of an entity, or more than one government entity. Performance audits can consider issues which affect the whole state and/or the local government sectors.
• Compliance audits and other assurance reviews are audits that assess whether specific legislation, directions, and regulations have been adhered to.

This report follows our earlier edition titled 'Performance Audit Insights: key findings from 2014–2018'. That report sought to highlight issues and themes emerging from performance audit findings, and to share lessons common across government. In this report, we have analysed the key findings and recommendations from our reports over the past four years. The full list of reports is included in Appendix 1. The analysis included findings and recommendations from 58 performance audits, as well as selected financial and compliance reports tabled between July 2018 and February 2022. The number of recommendations and key findings made across different areas of activity and the top issues are summarised at Exhibit 1.

The past four years have seen unprecedented challenges and several emergency events, and the scale of government responses to these events has been wide-ranging involving emergency response coordination, service delivery, governance and policy. While these emergencies are having a significant impact today, they are also likely to continue to have an impact into the future. There is much to learn from the response to those events that will help the government sector to prepare for and respond to future disruption. The following chapters bring together our recommendations for core elements of good practice across a number of areas of government activity, along with relevant examples from recent audit reports.

This 'Audit Insights 2018–2022' report does not make comparative analysis of trends in public sector performance since our 2018 Insights report, but instead highlights areas where government continues to face challenges, as well as new issues that our audits have identified since our 2018 report. We will continue to use the findings of our Insights analysis to shape our future audit priorities, in line with our purpose to help Parliament hold government accountable for its use of public resources in New South Wales.

Appendix one – Included reports, 2018–2022

Appendix two – About this report

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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.

What the report is about

The ePlanning program is an initiative of the Department of Planning and Environment (the department) to deliver a digital planning service for New South Wales through the NSW planning portal (the portal).

Using the portal, relevant planning activities can be carried out online, including all stages of development applications.

The portal has been developed under three separate business cases in 2013, 2014 and 2020.

In late 2019, the government mandated the use of the portal for all development applications. This decision took effect across 2020–21.

This audit assessed the effectiveness of the department's implementation, governance and stakeholder engagement in delivering the NSW planning portal. 

What we found

Since implementation commenced in 2013, the NSW planning portal has progressively achieved its objectives to provide citizens with access to consolidated planning information, and allow them to prepare and submit development applications online.

Shortcomings in the department's initial planning and management of the program led to a significant time overrun. It has taken the department longer and cost significantly more to implement the portal than first anticipated. 

In recent years the department has improved the planning, implementation and governance of the ePlanning program, resulting in improved delivery of the portal’s core functions.

The department now has a clear view of the scope necessary to finalise the program, but has not yet published the services it plans to implement in 2022 and 2023.

Mandating the use of the portal for all development applications changed the program's strategic risk environment and required the department to work more closely with a cohort of stakeholders, many of whom did not want to adopt the portal.

Despite this change, the department kept its overall delivery approach the same.

While implementation of the portal has delivered financial benefits, the department has overestimated their value.

The Department has only reported benefits since 2019 and has not independently assured the calculation of benefits.

What we recommended

By December 2022, the department should:

• publish a roadmap of the services it expects to release on the portal across 2022 and 2023
• update its ePlanning program assumptions, benefits targets and change management approach to reflect the government's decision to mandate the use of the portal for all stages of a development application
• independently assure and report publicly the correct calculation of ePlanning program benefits.

The ePlanning program is an initiative of the Department of Planning and Environment (the department) to deliver a digital planning service for New South Wales through the NSW planning portal (the portal, or the planning portal). The department defines the portal as an online environment where community, industry and government can work together to better understand and meet their obligations under the Environmental Planning and Assessment Act 1979 (NSW). Using the portal, relevant planning activities can be carried out online throughout New South Wales. This includes, but is not limited to:

• applying for and gaining planning approval
• applying for and gaining approval for building works, sub-dividing land and similar activities
• issuing occupancy and other certificates.

The portal has been developed under three separate business cases. The first business case in 2013 led to the creation of a central portal, which made planning information available to view by planning applicants and allowed some planning applications to be lodged and tracked online.

Under a second business case prepared in 2014, the department set out to improve and widen the functions available via the portal. The department prepared a third business case in 2020 to fund further improvements to the portal over the period July 2020 to June 2023. The third business case also extended the portal's functions to support the building and occupation stages of the planning cycle.

In late 2019, the government mandated the use of the portal for all stages of development applications. This decision took effect across 2020–21 and applied to all councils as well as certifiers and others involved in the planning process.

The objective of this performance audit was to assess the effectiveness of the department's implementation, governance and stakeholder engagement in delivering the NSW planning portal. We investigated whether:

• delivery of the NSW planning portal was planned effectively
• sound governance arrangements are in place to ensure effective implementation of the program
• users of the NSW planning portal are supported effectively to adopt and use the system.

This part of the report sets out how:

• the ePlanning program has been planned and delivered
• users of the portal have been supported
• the program has been governed.

This part of the report sets out the ePlanning program's:

• expected and reported financial benefits
• calculation of financial benefits.

In 2019, the department increased its expectations for net financial benefits

The department's three ePlanning business cases each forecast substantial financial benefits from the implementation of the planning portal. The department expected that most financial benefits would flow to planning applicants due to a quicker and more consistent planning process. It also expected that government agencies and councils would benefit from the portal.

In 2019 the department commissioned a review to explore opportunities to better identify, monitor and realise the benefits of the ePlanning program. Using this work, the department updated the expected benefits for business cases 1 and 2 to take account of:

• errors and miscalculations in the original benefits calculations
• slower delivery of the portal and changes to the take-up of portal services by councils
• changes to the services supported by the portal.

Reported benefits significantly exceed the current targets

In September 2021, the department reported that the program had achieved $334 million of benefits over the three financial years up to June 2021 plus the first two months of 2021–22. These reported benefits were significantly higher than expected. 

The department attributes the higher-than-expected financial benefits to the following:

• benefit targets have not been updated to reflect the impact of the 2019 decision to mandate the use of the portal for all development applications. This decision brought forward the expected benefits as well as potential costs of the program. However, the department did not update its third business case which was draft at the time. The business case was subsequently approved in July 2020
• one-off cost savings for agencies not having to develop their own systems
• public exhibitions of planning proposals continuing to be available online during 2020 when some newspapers stopping printing due to COVID-19.

The calculation of benefits is overstated

The department reported $334 million of benefits in September 2021 due to the ePlanning program. This calculation is overstated because:

• a proportion of reported benefits is likely to be due to other planning reforms
• the calculation of the largest single benefit is incorrect
• the reported benefits may not fully account for dis-benefits reported by some stakeholders.

The program’s benefits are calculated primarily from changes in planning performance data, such as the time it takes to determine a planning development application. The department currently attributes the benefits from shorter planning cycles entirely to the effect of the ePlanning program. However, planning cycles are impacted by many other factors such as the complexity of planning regulations and the availability of planning professionals. Planning cycles may also be impacted by other departmental initiatives which are designed to improve the time that it takes for a planning application to be evaluated. The Introduction describes some of these initiatives.

The largest contribution to the department’s September 2021 benefit report was an estimated saving of $151 million for developers due to lower costs associated with holding their investment for a shorter time. However, the department’s calculation of this benefit assumes a high baseline for the time to determine a development application. It also assumes that all development applications except for additions or alterations to existing properties will incur financing costs. However, a small but material number of these applications will be self-financed. The calculation also includes several data errors in spreadsheets.

The calculation of some benefits relies upon an extrapolation of the benefits experienced by a small number of early-adopter councils, including lower printing and scanning costs, fewer forms and quicker processing times. However, some councils report that their costs have increased following the introduction of the portal, primarily because aspects of the portal duplicate work that they carry out in their own systems. The portal has also required some councils to re-engineer aspects of their own systems, such as the integration of their planning systems with other council systems such as finance or property and rating systems. It has also required councils to create new ways of integrating council information systems with the planning portal.

The department has published information to help councils and certifiers to automatically integrate their systems with the planning portal. This approach uses application programming interfaces (or APIs) which are an industry-standard way for systems to share information. In April and May 2021, the government granted $4.8 million to 96 regional councils to assist with the cost of developing, implementing and maintaining APIs. The maximum amount of funding for each council was $50,000. The department is closely monitoring the implementation of APIs by councils and other portal users. Once they are fully implemented the department expects APIs to reduce costs incurred by stakeholders.

The department has not yet measured stakeholder costs. It was beyond the scope of this audit to validate these costs.

The department has not independently assured the calculation of reported benefits

In 2020 the department appointed an external provider to calculate the benefits achieved by the ePlanning program. The department advised that it chose to outsource the calculation of benefits because the provider had the required expertise and because it wanted an independent calculation of the benefits. The process involves:

• extraction and verification of planning performance data by the department
• population of data input sheets by the department
• calculation of benefits by the external provider using the data input
• confirmation by the department that the calculation includes all expected benefit sources.

The department does not have access to the benefits calculation model which is owned and operated by the external provider. The department trusts that the provider correctly calculates the benefits and does not verify the reported benefit numbers. However, as the benefits model involves many linked spreadsheets and approximately 300 individual data points, there is a risk that the calculation model contains errors beyond those discussed in this audit.

The reported benefits have only been calculated since 2019

The department originally intended to track benefits from October 2014. However, it only started to track benefits in 2019 when it appointed an external provider to calculate the benefits achieved by the portal. Any benefits or dis-benefits between the introduction of the portal and 2019 are unknown and not included in the department’s calculation of benefits.

Appendix one – Response from agency

Appendix two – About the audit

Appendix three – Performance auditing

Copyright notice

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

Parliamentary reference - Report number #366 - released 21 June 2022