Reports
Actions for Cyber security in local government
Cyber security in local government
What this report is about
NSW local councils provide a wide range of essential services and infrastructure to their communities and are increasingly reliant on digital technologies.
Councils need to manage cyber security risks to ensure their information, data and systems are appropriately safeguarded. Councils also need to be prepared to detect, respond and recover when a cyber security incident occurs.
The audit assessed how effectively three selected councils identified and managed cyber security risks.
The audit also included the Department of Planning, Housing and Infrastructure (Office of Local Government) and Department of Customer Service (Cyber Security NSW), due to their roles in providing guidance and support to local councils.
Audit findings
The audit found that the selected councils are not effectively identifying and managing cyber security risks. Each of the councils undertook activities to improve their cyber security during the audit period, but this audit found significant gaps in their cyber security risk management and cyber security processes.
Such gaps result in unmitigated risks to the security of information and assets which, if compromised, could impact their local communities, service delivery and public infrastructure.
Cyber Security NSW and the Office of Local Government recommend that councils adopt requirements in the Cyber Security Guidelines for Local Government, but could do more to monitor whether the Guidelines are enabling better cyber security risk management in the sector.
Audit recommendations
In summary, the councils should:
- integrate assessment and monitoring of cyber security risks into corporate governance processes
- self-assess their performance against Cyber Security NSW's guidelines for local government
- develop and implement a risk-based cyber security improvement plan and program of activities
- develop, implement and test a cyber incident response plan.
Cyber Security NSW and the Office of Local Government should regularly consult on cyber security risks facing local government, and review the effectiveness of guidelines and related resources for the sector.
While this report focuses on the performance of the selected councils, the findings and recommendations should be considered by all councils to better understand their risks and challenges relevant to managing cyber security risks.
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Parliamentary reference - Report number #392- released 26 March 2024
Actions for Local Government 2023
Local Government 2023
What this report is about
Results of the local government sector financial statement audits for the year ended 30 June 2023.
Findings
Unqualified audit opinions were issued for 85 councils, eight county councils and 12 joint organisations.
Qualified audit opinions were issued for 36 councils due to non-recognition of rural firefighting equipment vested under section 119(2) of the Rural Fires Act 1997.
The audits of seven councils, one county council and one joint organisation remain in progress at the date of this report due to significant accounting issues.
Fifty councils, county councils and joint organisations missed the statutory deadline of submitting their financial statements to the Office of Local Government, within the Department of Planning, Housing and Infrastructure, by 31 October.
Audit management letters included 1,131 findings with 40% being repeat findings and 91 findings being high-risk. Governance, asset management and information technology continue to represent 65% of the key areas for improvement.
Fifty councils do not have basic governance and internal controls to manage cyber security.
Recommendations
To improve quality and timeliness of financial reporting, councils should:
- adopt early financial reporting procedures, including asset valuations
- ensure integrity and completeness of asset source records
- perform procedures to confirm completeness, accuracy and condition of vested rural firefighting equipment.
To improve internal controls, councils should:
- track progress of implementing audit recommendations, and prioritise high-risk repeat issues
- continue to focus on cyber security governance and controls.
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Actions for Regulation insights
Regulation insights
What this report is about
In this report, we present findings and recommendations relevant to regulation from selected reports between 2018 and 2024.
This analysis includes performance audits, compliance audits and the outcomes of financial audits.
Effective regulation is necessary to ensure compliance with the law as well as to promote positive social and economic outcomes and minimise risks with certain activities.
The report is a resource for public sector leaders. It provides insights into the challenges and opportunities for more effective regulation.
Audit findings
The analysis of findings and recommendations is structured around four key themes related to effective regulation:
- governance and accountability
- processes and procedures
- data and information management
- support and guidance.
The report draws from this analysis to present insights for agencies to promote effective regulation. It also includes relevant examples from recent audit reports.
In this report, we also draw out insights for agencies that provide a public sector stewardship role.
The report highlights the need for agencies to communicate a clear regulatory approach. It also emphasises the need to have a consistent regulatory approach, supported by robust information about risks and accompanied with timely and proportionate responses.
The report highlights the need to provide relevant support to regulated parties to facilitate compliance and the importance of transparency through reporting of meaningful regulatory information.
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Actions for Driver vehicle system
Driver vehicle system
What this report is about
Transport for NSW (TfNSW) uses the Driver vehicle System (DRIVES) to support its regulatory functions. The system covers over 6.2 million driver licences and over seven million vehicle registrations.
DRIVES first went live in 1991 and has been significantly extended and updated since, though is still based around the same core system. The system is at end of life but has become an important service for Service NSW and the NSW Police Force.
DRIVES now includes some services to other parts of government and non-government entities which have little or no connection to transport. There are 141 users of DRIVES in total, including commercial insurers, national regulators, and individual citizens.
This audit assessed whether TfNSW is effectively managing DRIVES and planning to transition it to a modernised system.
Audit findings
TfNSW has not effectively planned the replacement of DRIVES.
It is now working on its third business case for a replacement system but has failed to learn lessons from its past attempts.
In the meantime, TfNSW has not taken a strategic approach to managing DRIVES’ growth.
TfNSW has been slow to reduce the risk of misuse of personal information held in DRIVES. With its delivery partner Service NSW, TfNSW has also been slow to develop and implement automatic monitoring of access.
TfNSW uses recognised processes for managing most aspects of DRIVES, but has not kept the system consistently available for users. TfNSW has lacked accurate service availability information since June 2022, when it changed its technology support provider.
TfNSW needs to significantly prioritise cyber security improvements to DRIVES. TfNSW is seeking to lift DRIVES’ cyber defences, but it will not achieve its stated target safeguard level until December 2025.
Even then, one of the target safeguards will not be achieved in full until DRIVES is modernised.
Audit recommendations
TfNSW should:
- implement a service management framework including insight into the views of DRIVES users, and ensuring users can influence the service
- ensure it can accurately and cost effectively calculate when DRIVES is unavailable due to unplanned downtime
- ensure implementation of a capability to automatically detect anomalous patterns of access to DRIVES
- ensure that DRIVES has appropriate cyber security and resilience safeguards in place as a matter of priority
- develop a clear statement of the future role in whole of government service delivery for the system
- resolve key issues currently faced by the DRIVES replacement program including by:
- clearly setting out a strategy and design for the replacement
- preparing a specific business case for replacement.
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Parliamentary reference - Report number #388 - released 20 February 2024
Actions for Transport 2023
Transport 2023
What this report is about
Result of the Transport portfolio of agencies' financial statement audits for the year ended 30 June 2023.
The audit found
Unqualified audit opinions were issued for all Transport portfolio agencies.
An 'emphasis of matter' paragraph was included in the Transport Asset Holding Entity of New South Wales' (TAHE) independent auditor's report, which draws attention to management's disclosure regarding proposed changes to TAHE's operating model.
Government's decision to convert TAHE into a non-commercial Public Non-Financial Corporation may impact the future valuation and the control of TAHE's assets.
Transport for NSW's valuation of roads and bridges resulted in a net increase to its asset value by $15.7 billion.
Transport for NSW and Sydney Metro have capitalised over $300 million of tender bid costs paid to unsuccessful tender bidders relating to significant infrastructure projects. Whilst NSW Treasury policy provides clarity on the reimbursement of unsuccessful bidders' costs, clearer guidance on how to account for these costs in agency's financial statements is required.
The key audit issues were
The number of issues reported to management decreased from 53 in 2021–22 to 49 in 2022–23.
High-risk findings include:
- gaps in how Sydney Metro manages its contractors and how conflicts of interest are recorded and managed
- future financial reporting implications to account for government's proposed changes to TAHE's future operating model, including asset valuations and control assessments of assets and operations
- Parramatta Park Trust's tree assets' valuation methodology needs to be addressed.
Recommendations were made to address the identified deficiencies.
This report provides Parliament and other users of the Transport 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 Transport portfolio of agencies (the portfolio) for 2023.
Section highlights
- Unqualified audit opinions were issued on all the portfolio agencies’ 30 June 2023 financial statements.
- An 'Emphasis of Matter' paragraph was included in the Transport Asset Holding Entity of New South Wales’ (TAHE) Independent Auditor's Report to draw attention to management's disclosure regarding the proposed changes to TAHE's future operating model.
- The total number of errors (including corrected and uncorrected) in the financial statements increased by 59% compared to the prior year.
- The recent government's decision to convert TAHE into a non-commercial Public Non-Financial Corporation may impact the future valuation and the control of TAHE’s assets.
- Transport for NSW needs to further improve its quality assurance processes over comprehensive valuations, in particular, ensuring key inputs used in the valuations are properly supported and verified.
- Transport for NSW and Sydney Metro capitalised over $300 million of bid costs paid to unsuccessful bidders. NSW Treasury’s Bid Cost Contributions Policy does not contemplate how these costs should be recognised in agency’s financial statements. Transport agencies should work with NSW Treasury to develop an accounting policy for the bid cost contributions to ensure consistent application across the sector.
Appropriate financial controls help ensure the efficient and effective use of resources and administration of agency policies. They are essential for quality and timely decision-making.
This chapter outlines our observations and insights from our financial statement audits of agencies in the Transport portfolio.
Section highlights
- The 2022–23 audits identified four high risks and 28 moderate risk issues across the portfolio. Thirty-nine per cent of issues were repeat findings.
- Four high risk findings include:
- TAHE’s asset valuations (new)
- TAHE’s control of assets and operations (new)
- Sydney Metro’s management of contractors and conflicts of interest (new)
- Parramatta Park Trust’s valuation of trees (repeat).
- The total number of findings decreased from 53 in 2021–22 to 49 in 2022–23. Many repeat findings related to control weaknesses over the asset valuation, payroll processes, conflicts of interest and information technology user access administration.
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.
Actions for Procurement of services for the Park'nPay app
Procurement of services for the Park'nPay app
What this report is about
The report assesses whether the Department of Customer Service (the department) complied with legislation and NSW government policy when it directly negotiated with Duncan Solutions to procure backend services relating to the Park'nPay app.
The Park'nPay app, developed by the department, enables users to locate and pay for parking remotely using their smart mobile device.
The audit found
The department failed to establish the grounds for entering a direct negotiation procurement strategy, without any competitive tendering, for services for the Park'nPay app. It rushed a decision to trial the app in The Rocks, without considering how this might affect its procurement obligations.
There is no evidence that the procurement achieved value for money. Despite being required by legislation, as well as mandatory NSW government policy, the department did not consider how it would ensure value for money, nor did it demonstrate an adequate understanding of what is meant by value for money on this occasion.
The department failed to implement key probity requirements. There was no effective management of conflicts of interest. Key decisions were not documented. There was a lack of clarity, transparency, and oversight of the relationship between the Minister's office and staff in the department.
The audit made recommendations about
- making and retaining complete and accurate records, particularly on decisions to commit or expend public money
- ensuring department staff understand how to exercise their financial delegations and procurement processes
- ensuring that only staff with appropriate delegations are committing or approving the spending of public money
- consistency with the contract extension provisions of the NSW Government Procurement Policy Framework, particularly regarding ensuring value for money
- protocols to guide the interactions between department staff and Minister and Minister's staff
- the need for proper management and oversight of contingent workers, such as contractors.
On 27 February 2019 the then Minister for Finance, Services and Property announced the commencement of a Park’nPay app trial in The Rocks precinct of Sydney.
The app was intended to enable users to locate and pay for parking remotely, using their smart mobile device such as a phone or tablet, rather than needing to physically be at a parking meter.
In July 2019, following a direct negotiation procurement conducted by the then Department of Finance, Services and Innovation, a contract was executed with Duncan Solutions for an estimated value of $1,260,600 over three-years, with three single-year options to extend. The contract required Duncan Solutions to provide development services to link the Park'nPay app to its Parking Enterprise Management System platform and to provide ongoing software support services.
This audit assessed whether the department complied with the procurement obligations that applied at the time it procured these services from Duncan Solutions.
This audit focussed on the department's processes and decision-making relating to:
- the direct negotiation with Duncan Solutions at the exclusion of any other potential supplier
- the negotiation, execution and management of the contract with Duncan Solutions.
As this audit focusses on the department's procurement and contract management processes, it does not comment on the activities of Duncan Solutions. The detailed audit objective, criteria and audit approach are in Appendix three.
The auditee is the Department of Customer Service. As a result of machinery of government changes, the Department of Finance, Services, and Innovation became the Department of Customer Service from 1 July 2019. To avoid confusion, this report simply uses ‘the department’ to refer to either. Where the report refers to the Minister, it relates to the former Minister in office at the time.
Conclusion
The department failed to establish the grounds for entering a direct negotiation procurement strategy for services for the Park'nPay app. It rushed a decision to trial the app in The Rocks, without considering how this might affect its procurement requirements.
As part of a direct negotiation process, the department was required to, but did not:
- undertake a comprehensive analysis of the market and all relevant factors to demonstrate that a competitive process does not need to be conducted
- conduct a risk assessment for the procurement approach
- follow the internal delegation process, including obtaining approval of the department's delegate and endorsement of the Chief Procurement Officer.
There is no evidence that the procurement to support Park'nPay represented value for money. Despite it being required by legislation, as well as mandatory NSW Government policy, the department did not consider how to ensure value for money, nor demonstrate an adequate understanding of what is meant by value for money in this case.
The department issued no tender or expression of interest documents against which any proposal could be assessed, and it had no tender evaluation plan, committee, or criteria. Without any objective standards against which the supplier's proposal could be assessed, it was not possible for the department to determine if value for money was achieved, and no value for money has been demonstrated.
The department failed to implement key probity requirements. There was no effective management of conflicts of interest. Key decisions were not documented. There was a lack of clarity, transparency, and oversight of the relationship between the Minister's office and staff in the department.
No conflict of interest declarations were made by staff until almost one year after the direct negotiations commenced and even then they were not made by all members of the negotiation team and key decision-makers.
The department did not document the reasons for its decisions or minute key meetings, such as when, why and by whom the decision was made to transform the procurement from a 'trial' to a contract of up to six years duration. The department had no policies guiding the interactions between the Minister, the Minister's office and staff in the department (including contractors) in relation to this initiative, resulting in blurred and uncertain roles, responsibilities, and accountabilities.
The department initially sought to withhold information from the Audit Office pertaining to Park'nPay. When questions were raised through external scrutiny, there was little evidence of genuine inquiry or review into its practices to ensure improvement and compliance.
The department deliberately sought to withhold information from the Audit Office of NSW when initial inquiries were lawfully made about the Park'nPay project in the context of the audit of the department's financial statements in May 2021.
There is also limited evidence to demonstrate the department has reviewed the decisions and practices around the Park'nPay project, despite receiving internal legal advice at the time that questioned the characterisation of the procurement as a 'pilot', and external scrutiny via the NSW Parliament's Budget Estimates Committee hearings. This indicates a risk that opportunities to review and improve the department's procurement practices based on learnings from this process have been missed.
Appendix one – Response from auditee
Appendix two – Key requirements of the department's procurement manual
Appendix three – About the audit
Appendix four– Performance auditing
Copyright notice
© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.
Parliamentary reference - Report number #387 - released 14 December 2023
Actions for Regional road safety
Regional road safety
What this report is about
Around one-third of the state’s population lives in regional NSW, but deaths on regional roads make up around two-thirds of the state’s road toll.
Transport for NSW (TfNSW) is responsible for managing road safety outcomes across the NSW road network. This audit assessed the effectiveness of TfNSW’s delivery of road safety strategies, plans and policies in regional areas.
The NSW Road Safety Action Plan 2022–2026 has the stated goal of ‘no death or serious injury occurring on the road transport network’ by 2050.
What we found
There is a disproportionate amount of trauma on regional roads, but there are no specific road safety plans or trauma reduction targets for regional NSW.
TfNSW advises that the setting of state-wide road safety targets is consistent with other jurisdictions and international best practice. However, the proportion of road fatalities and serious injuries in regional NSW is almost the same as ten years ago.
There is no regional implementation plan to assist TfNSW to target the Road Safety Action Plan 2026 to regional areas.
TfNSW considers that local road safety outcomes should be managed by councils, but only 52% of regional councils participated in its Local Government Road Safety Program (LGRSP) in 2022–23. This program has not been updated since 2014, despite commitments to do so in 2021 and 2022.
TfNSW has not undertaken a systematic and integrated analysis of the combined impact of its road safety strategies and plans in regional NSW since 2012.
TfNSW reports against the Community Road Safety Fund (CRSF) annually but there is no consolidated, public reporting on total road safety funding allocated to regional NSW. The Fund underspend increased from 12% in 2019–20 to 20% in 2022–23.
What we recommended
We recommended TfNSW:
- develop a regional implementation plan to support the NSW Road Safety Action Plan, including a framework to annually measure, analyse and publicly report on progress
- develop a plan to measure and mitigate risks causing underspend in the CRSF
- expedite the review of the LGRSP including recommendations to increase involvement of regional councils.
Disclosure of confidential information
Under the Government Sector Audit Act 1983 (the Act), the Auditor-General may disclose confidential information if, in the Auditor-General’s opinion, the disclosure is in the public interest, and that disclosure is necessary for the exercise of the Auditor-General’s functions.
Confidential information in the Act means Cabinet information or information subject to legal privilege. This performance audit report contained confidential information.
The NSW Premier has certified that in his opinion the disclosure of the confidential information was not in the public interest.
The confidential information has been redacted from this report.
Under section 36A(2) of the Government Sector Audit Act 1983, the Auditor-General may authorise the disclosure of confidential information if, in the Auditor-General’s opinion, the disclosure is in the public interest and necessary for the exercise of the Auditor-General’s functions. Confidential information under the Government Sector Audit Act 1983 means Cabinet information, or information that could be subject to a claim of privilege by the State or a public official in a court of law. This performance audit report contained confidential information which, in the opinion of the Auditor-General, is in the public interest to disclose and that disclosure is necessary for the exercise of the Auditor-General’s functions.
On 26 October 2023, pursuant to section 36A(2)(b) of the Government Sector Audit Act 1983, the Auditor-General notified the NSW Premier of the intention to include this information in the published report, having formed the opinion that its disclosure is in the public interest and is necessary for the exercise of the Auditor-General’s functions.
On 23 November 2023, pursuant to section 36A(2)(c) of the Government Sector Audit Act 1983, the NSW Premier certified that, in his opinion, the proposed disclosure of the confidential information contained in this report was not in the public interest. The Premier’s certificate follows. Section 36A(4) states that a certificate of the Premier that it is not in the public interest to disclose confidential information is conclusive evidence of that fact.
The issuance of the certificate by the NSW Premier prevents the publication of this information. The relevant sections of the report containing confidential information have been redacted.
One-third of the New South Wales population resides in regional areas, but two-thirds of the state’s road crash fatalities take place on regional roads.
Between 2017 and 2021, the average number of fatalities for every 100,000 of the population living in regional New South Wales was 8.33 — approximately four times higher than the equivalent measure for Greater Sydney. Similarly, the average number of serious injuries in regional New South Wales over the same period was 75.24 per 100,000 of the population, compared with 50.53 in Greater Sydney. Further, more than 70% of people who lose their lives in accidents on regional roads are residents of regional areas.
Residents of regional areas face particular transport challenges. They often need to travel longer distances for work, health care, or recreation purposes, yet their public transport options are more limited than metropolitan residents. Vehicle safety is also an issue. According to the NSW Road Safety Progress Report 2021, of the light vehicles registered in New South Wales that were manufactured in or after 2000, 48.4% of light vehicles in regional areas had a five-star Australasian New Car Assessment Program (ANCAP) rating, compared to 54.8% in metropolitan areas. Road conditions in regional areas can also be more challenging for drivers.
Regional New South Wales covers 98.5% of the total area of the state. The road network in New South Wales is vast — spanning approximately 200,000 kilometres.
The road network includes major highways, state roads and local roads. Speed limits range from 10 km/hr in high pedestrian shared zones, up to 110 km/hr on high volume and critical road corridors. Eighty per cent of the network has a 100 km/h speed limit, which is mostly applied as a default speed limit, regardless of the presence of safety features and treatments.
Speed is the primary causal factor in more crashes in New South Wales than any other factor, and car crashes in regional areas are more likely to be fatal because of the higher average speeds involved.
The responsibility for managing road safety outcomes across the entire New South Wales road network lies with Transport for NSW (TfNSW), pursuant to Schedule 1 of the Transport Administration Act 1988.
While its safety responsibilities are state-wide, TfNSW does not own or directly manage all of the road network in regional New South Wales, which spans approximately 200,000 kilometres. Approximately 80% of the roads are classified as Local Roads and are administered and managed by local councils. Local councils also maintain Regional Roads that run through their local government areas. TfNSW is responsible for managing State Roads (approximately 20% of roads), which are major arterial roads. It also provides funding for councils to manage over 18,000 km (approximately 10%) of state-significant Regional Roads.
According to TfNSW, between 2016 and 2020, there were 9,776 people killed or seriously injured on roads in regional New South Wales. Adding to the tragic loss of life, according to TfNSW, the estimated cost to the community between 2016 and 2020 resulting from regional road trauma and fatalities was around $13.7 billion.
TfNSW also noted that the ‘risk of road trauma is pervasive, and a combination of effective road safety measures is required to systematically reduce this risk’.
TfNSW released its first long-term road-safety strategy in December 2012, which introduced the goal of ‘Vision Zero’ — a long-term goal of zero deaths or serious injuries on NSW roads. The terminology was changed to ‘Towards Zero’ in the 2021 Road Safety Plan and has been retained in the NSW Road Safety Action Plan 2022–2026. Towards Zero has the stated goal of ‘no death or serious injury occurring on the road transport network’ by 2050.
The objective of this audit is to assess the effectiveness of TfNSW’s delivery of ‘Towards Zero’ in regional areas.
In making this assessment, the audit examined whether TfNSW:
- is effectively reducing the number of fatalities and serious injuries on regional roads
- has an effective framework, including governance arrangements, for designing and refreshing the NSW Road Safety Strategy 2012–2021 and the NSW Road Safety Action Plan 2022–2026
- effectively makes use of whole-of-government and other relevant sources of data to support decision-making, and to evaluate progress and outcomes
- effectively manages accountabilities, including roles and responsibilities, with respect to road safety outcomes and the use of data.
This audit focused on the policies and strategies used by TfNSW for managing road safety outcomes in regional areas. We did not evaluate individual road safety projects, programs and initiatives as part of this audit.
Whilst Regional Roads and Local Roads (as defined by the Road Network Classifications) are owned and maintained by local councils, we included these roads in this audit as TfNSW may advise and assist councils to promote and improve road safety, as well as manage grant programs that focus on improving road safety outcomes on these roads. Hereafter, unless otherwise stated, references to ‘regional roads’ refer to all classifications of roads in the state which are in regional New South Wales, irrespective of their ownership.
Local councils in regional areas are key stakeholders for the purposes of this audit, and we interviewed eight as part of the audit process (noting that this was not intended to be a representative sample). Road asset management by local councils is also out of scope for this audit as it is the focus of a subsequent performance audit by the Audit Office of New South Wales.b
The Audit Office of New South Wales has undertaken several performance audits relating to road safety since 2009 and these have been referenced while undertaking this audit. They include:
- Condition of State Roads (August 2006)
- Improving Road Safety: Heavy Vehicles (May 2009)
- Improving Road Safety: School Zones (March 2010)
- Improving Road Safety: Speed Cameras (July 2011)
- Regional Assistance Programs (May 2018)
- Mobile speed cameras (October 2018)
- Rail freight and Greater Sydney (October 2021).
Conclusion
TfNSW has acknowledged that there is a disproportionate amount of road trauma on regional roads in the NSW Road Safety Strategy 2012–2021, the NSW Road Safety Plan 2021, and the NSW Road Safety Action Plan 2022–2026. However, TfNSW has not articulated or evaluated a strategy for implementing road safety policy in regional New South Wales to assist in guiding targeted activities to address regional road trauma. There is also no transparency about the total amount of funding invested in improving road safety outcomes for regional New South Wales.
People living in regional New South Wales make up one-third of the state’s population, but deaths on regional roads make up around two-thirds of the state’s total road toll. This statistic is almost the same in 2023 as it was ten years ago when TfNSW released its first long-term road safety strategy.
More than 70% of people who died on roads between 2012 and 2022 in regional New South Wales were residents of regional areas. Speed is the greatest contributing factor to road fatalities and serious injuries across the entire state. However, it is responsible for more fatalities on regional roads (43%) than in Greater Sydney (34%).
TfNSW’s road safety strategies and plans acknowledge that most road fatalities occur in regional New South Wales but none of its existing strategies or plans show evidence of tailoring measures to suit particular regional settings or ‘hot spots’. There are infrastructure initiatives (such as Saving Lives on Country Roads) and behavioural programs targeting regional areas (such as Driver Reviver). However, these activities are not aligned to a regional-specific strategy or plan that addresses issues specific to regional areas.
TfNSW has state-wide responsibility for managing road safety outcomes. TfNSW advised the audit that a regional plan and regional trauma reduction targets are not needed as the state-wide plan and targets apply equally for all areas of New South Wales, and local road safety factors are best managed by local councils. TfNSW partners with local councils. However, only 52% of councils in regional New South Wales participate in TfNSW’s Local Government Road Safety Program, compared to 84% of councils in metropolitan areas. TfNSW has not undertaken any evaluations to determine whether projects completed under the Local Government Road Safety Program have reduced road trauma at the local level.
Notwithstanding the above points, TfNSW works with local councils (who are road authorities for local roads in their respective areas under the Roads Act 1993) and other key stakeholders such as the NSW Police Force to achieve the NSW Government’s road safety policy objectives.
TfNSW advised that ‘the setting of state-wide road safety targets is consistent with other jurisdictions and international best practice. Importantly, delivery of road safety countermeasures is tailored and applied with a focus on road user groups across all geographic locations to maximise trauma reductions’. There may be legitimate reasons for the existing approach, as articulated by TfNSW. However, the proportion of road fatalities in regional New South Wales roads has not reduced since 2012 – despite a long-term reduction in the overall number of deaths on the state’s roads between 2012–2021. The audit report has recommended that a regionally focused implementation plan could address this issue. TfNSW has accepted this report’s recommendation that such a plan be developed.
Specific road safety initiatives targeted to regional areas have not been implemented or expanded
Text removed pursuant to section 36A of the Government Sector Audit Act 1983 (NSW), in compliance with the issuance of a Premier’s certificate preventing the publication of this information. |
TfNSW increased the use of other forms of automated enforcement (such as tripling enforcement hours in mobile speed cameras).
However, the use of automated enforcement has a strong metropolitan focus with most red light and fixed speed cameras being in metropolitan areas. Average speed cameras are the only camera type overwhelmingly located in regional areas but these apply only to heavy vehicles and are positioned on major freight routes.
There is no consolidated, public reporting of what proportion of total road safety funding is directed to regional New South Wales each year. The main source of funding for road safety in New South Wales, the Community Road Safety Fund, has been underspent since 2019.
Fines from camera-detected speeding, red-light and mobile phone use offences are required to be used solely for road safety purposes through the Community Road Safety Fund (CRSF), as set out in the Transport Administration Amendment (Community Road Safety Fund) Act 2012.
The CRSF has been underspent every year since 2019–20. The underspend has increased from 12% in 2019–20 to 20% in 2022–23 where the full year underspend was forecasted to be $104 million. Of this underspend, $13.5 million was dedicated for regional road infrastructure projects. TfNSW advised the audit that much of the underspend is the result of delays to infrastructure projects due to COVID-19, bushfires, and floods, as well as skills shortages. However, TfNSW has not provided any evidence that it had a plan to mitigate these risks – meaning the level of underspend could continue to grow. TfNSW also advised ‘there is no reason to expect budget management and controls will not return to pre-COVID circumstances’.
In total, TfNSW received $700 million in funding for road safety in 2021–22 (including federal contributions and the Community Road Safety Fund). Of this, $411 million (or ~59%) was directed to regional New South Wales. This is the most recent comprehensive financial data that was provided by TfNSW to the audit team. The 2022–23 NSW Budget allocated $880 million for road safety in 2022–23, with a forecasted total allocation for road safety of $1.6 billion in recurrent expenses and $0.8 billion in capital expenditure over the period 2022–23 to 2025–26.
Appendix one – Response from Transport for NSW
Appendix two – The Safe Systems framework and NSW road safety strategies and plans
Appendix three – About the audit
Appendix four – Performance auditing
© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.
Parliamentary reference - Report number #386 - released 30 November 2023
Actions for Financial Management and Governance in MidCoast Council
Financial Management and Governance in MidCoast Council
Introduction
The Auditor-General's financial and performance audits of local councils aim to improve financial management, governance and public accountability across the local government sector.
Annual Local Government reports to Parliament have consistently highlighted risks and weaknesses across the sector in relation to financial management and governance. We will continue to focus on these matters as a priority area in our forward work program.
While this report focuses on MidCoast Council, the findings should be considered by all councils to better understand the challenges and opportunities when addressing financial sustainability and financial management needs.
Findings and recommendations around the effectiveness of long-term financial planning, comprehensive and timely financial reporting and financial management governance arrangements are relevant for all councils.
What this report is about
The Local Government Act 1993 requires councils to apply sound financial management principles, including sustainable expenditure, effective financial management and regard to intergenerational equity.
This audit assessed whether MidCoast Council has effective financial management arrangements that support councillors and management to fulfill their responsibilities as financial stewards.
What we found
MidCoast Council has not met all legislative and policy requirements for long-term financial planning.
From FY2019–20 to FY2020–21, the Council had financial management and governance gaps. Some gaps were addressed throughout FY2021–22.
MidCoast Council experienced significant challenges in its implementation of a consolidated financial management system following amalgamation in 2016 and the merging of MidCoast Water in 2017. This led to gaps in finance processes and data quality.
What we recommended
The report recommends that MidCoast Council should:
- ensure its long-term financial plan meets legislative and policy requirements
- undertake service reviews to better understand net costs to inform budget and financial planning decisions
- improve the quality of asset management information to inform budget and financial planning decisions
- use the financial management components of the MC1 system to its full potential
- address control and process gaps identified in audits and reviews
- ensure competency of those responsible for finance and budget
- ensure financial sustainability initiatives account for the cost of services and asset management information.
Effective financial management is important in ensuring that councils achieve their long-term objectives, remain financially viable and deliver intended benefits to the community.
Sustainable financial management has been a priority for the local government sector since 2013 and continues to be one of the highest rated risks and priorities among councils in 2023.
According to data provided by the Department of Planning and Environment, during FY2020–21, NSW local councils:
- collected $7.8 billion in rates and annual charges
- received $5.8 billion in grants and contributions
- incurred $4.8 billion of employee benefits and on costs
- held $16.8 billion of cash and investments
- managed $175.2 billion in infrastructure, property plant and equipment
- entered into $3.7 billion of borrowings.
The Local Government Act 1993 (LG Act) requires local councils to apply sound financial management principles including responsible and sustainable expenditure, investment, and effective financial and asset management. Under the LG Act and the Local Government Regulation 2021 (LG Regulation) councils are required to:
- establish and monitor their budget position
- clearly establish approaches to raise revenue, including from rates and other sources
- develop and implement integrated planning to ensure financial sustainability in line with community priorities and needs
- regularly report on their financial performance through financial statements.
The objective of the audit is to assess whether MidCoast Council (the Council) has effective financial management arrangements that support councillors and management to fulfil their financial stewardship responsibilities. It considers whether:
- the Council has an effective governance framework for financial management, through the existence of governance, risk management, internal controls and provision of adequate financial management training, including whether:
- governance, risk management and internal controls are in place for financial management
- adequate financial management and governance training and support has been provided to councillors, management and operational managers.
- the Council has quality and comprehensive internal financial management reporting, including whether:
- councillors and management have identified and implemented essential internal financial management reporting elements
- council’s financial systems and data have integrity, and support identified financial management report production requirements
- council reports are relevant, consistent, reliable, understandable, and tailored towards the requirements of key users (appendix two provides more information about the characteristics of effective financial management reporting).
- the financial management governance and reporting arrangements support councillors and management to fulfil their financial stewardship responsibilities, including whether councillors and management use internal financial management reporting to:
- support budget decisions, resource allocation and cost setting (for example fees and charges)
- monitor financial sustainability
- assess operational efficiency, financial services and investments
- make improvements where necessary.
This audit completed fieldwork during November 2022 to February 2023. The audit period of review was from 1 July 2019 to 30 June 2022.
Conclusion
MidCoast Council has not effectively carried out long-term financial planning to address its identified long-term financial sustainability challenges.
MidCoast Council has not met all legislative and policy requirements to effectively carry out long-term financial planning. It has not effectively considered and communicated how it will achieve financial sustainability goals and has not identified options to achieve such goals through its long-term financial plan.
Since 2020, and throughout 2021 and 2022, MidCoast Council has identified a need to focus on developing strategies for financial sustainability following the projected operating deficit for its general fund over the next ten years.
In September 2022, the Council took early steps to implement plans that aim to address the identified financial sustainability issues, but the Council has not yet established effective processes to analyse the true cost of services and address its unreliable asset condition data. Both are required to accurately inform its long-term resourcing strategy.
Between FY2019–20 and FY2020–21, MidCoast Council had gaps in its financial management and governance arrangements. The Council has taken some actions to address the gaps throughout FY2021–22.
Between FY2019–20 and FY2020–21, MidCoast Council did not ensure effective financial management governance and reporting arrangements. Over that time, the Council did not perform monthly reconciliation and reporting processes that would provide timely information and assurance to management and councillors over the Council's finances. It did not ensure that all financial management reporting met statutory deadlines for submission to councillors.
During this period, reviews, financial audits and internal audits identified risks to, and gaps in, finance processes, systems and controls. The consequences of these gaps were increased use of manual processes, and risks to the integrity of financial data and information used by management.
During FY2021–22, MidCoast Council implemented actions and processes that have increased transparency and led to improved financial governance. These include addressing and implementing some audit recommendations, and implementing monthly financial management reporting and month-end reconciliations.
MidCoast Council has commenced a $21 million program to improve its customer experience, asset management, ICT and back office business processes. The Council advises that this program has a five-year implementation timeframe and it expects to achieve financial benefits over the ten years following commencement.
MidCoast Council experienced significant challenges in its implementation of a consolidated financial management system following amalgamation in 2016 and the merging of MidCoast Water functions in 2017. This has led to gaps in finance processes and data quality within the system.
In 2016, following amalgamation, MidCoast Council commenced work to procure and implement an enterprise resource planning system which included a consolidated financial management system. In 2017, Council further merged with MidCoast Water and arrangements were made to implement the system (MC1) after the functions of MidCoast water were incorporated. The Council continued to use four separate financial management systems until it commenced a progressive implementation of MC1 from 2019 to 2021. Across MC1's implementation, the Council experienced significant challenges relating to change management, user functionality and configuration.
This meant that the Council did not ensure that all of its staff were using MC1 effectively and efficiently, which led to gaps in finance processes and data quality, and delays in delivering integrated and automated financial processes across the amalgamated Council.
Since implementation, MidCoast Council has used MC1 to carry out finance processes required to collect rates, prepare budgets, monitor expenditure and income and prepare financial statements.
Appendix one – Response from agency
Appendix two – Characteristics of effective financial management reporting
Appendix three – About the audit
Appendix four – Performance auditing
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Parliamentary reference - Report number #381 - released 16 June 2023
Actions for Planning and managing bushfire equipment
Planning and managing bushfire equipment
What the report is about
This audit assessed the effectiveness of the NSW Rural Fire Service (RFS) and local councils in planning and managing equipment for bushfire prevention, mitigation, and suppression.
What we found
The RFS has focused its fleet development activity on modernising and improving the safety of its firefighting fleet, and on the purchase of new firefighting aircraft.
There is limited evidence that the RFS has undertaken strategic fleet planning or assessment of the capability of the firefighting fleet to respond to current bushfire events or emerging fire risks.
The RFS does not have an overarching strategy to guide its planning, procurement, or distribution of the firefighting fleet.
The RFS does not have effective oversight of fleet maintenance activity across the State, and is not ensuring the accuracy of District Service Agreements with local councils, where maintenance responsibilities are described.
What we recommended
- Develop a fleet enhancement framework and strategy that is informed by an assessment of current fleet capability, and research into appropriate technologies to respond to emerging fire risks.
- Develop performance measures to assess the performance and capabilities of the fleet in each RFS District by recording and publicly reporting on fire response times, fire response outcomes, and completions of fire hazard reduction works.
- Report annually on fleet allocations to RFS Districts, and identify the ways in which fleet resources align with district-level fire risks.
- Develop a strategy to ensure that local brigade volunteers are adequate in numbers and appropriately trained to operate fleet appliances in RFS Districts where they are required.
- Establish a fleet maintenance framework to ensure regular update of District Service Agreements with local councils.
- Review and improve processes for timely recording of fleet asset movements, locations, and maintenance status.
This audit assessed how effectively the NSW Rural Fire Service (the RFS) plans and manages the firefighting equipment needed to prevent, mitigate, and suppress bushfires. This audit also examined the role of local councils in managing bushfire equipment fleet assets. Local councils have vested legal ownership of the majority of the land-based firefighting fleet, including a range of legislated responsibilities to carry out fleet maintenance and repairs. The RFS has responsibilities to plan and purchase firefighting fleet assets, and ensure they are ready for use in response to fires and other emergencies.
This report describes the challenges in planning and managing the firefighting fleet, including a confusion of roles and responsibilities between the RFS and local councils in relation to managing certain land-based rural firefighting fleet – a point that has been made in our Local Government financial audits over several years. This role confusion is further demonstrated in the responses of the RFS and local councils to this audit report – included at Appendix one.
The lack of cohesion in roles and responsibilities for managing rural firefighting vehicles increases the risk that these firefighting assets are not properly maintained and managed, and introduces a risk that this could affect their readiness to be mobilised when needed.
While the audit findings and recommendations address some of the operational and organisational inefficiencies in relation to rural firefighting equipment management, they do not question the legislative arrangements that govern them. This is a matter for the NSW Government to consider in ensuring the fleet arrangements are fit for purpose, and are clearly understood by the relevant agencies.
The NSW Rural Fire Service (hereafter the RFS) is the lead combat agency for bushfires in New South Wales, and has the power to take charge of bushfire prevention and response operations anywhere in the State. The RFS has responsibilities to prevent, mitigate and suppress bushfires across 95% of the State, predominantly in the non-metropolitan areas of New South Wales. Fire and Rescue NSW is responsible for fire response activity in the cities and large townships that make up the remaining five per cent of the State.
The RFS bushfire fleet is an integral part of the agency's overall bushfire risk management. The RFS also uses this fleet to respond to other emergencies such as floods and storms, motor vehicle accidents, and structural fires. Fleet planning and management is one of a number of activities that is necessary for fire mitigation and suppression.
The Rural Fires Act 1997 (Rural Fires Act) imposes obligations on all landowners and land managers to prevent the occurrence of bushfires and reduce the risk of bushfires from spreading. Local councils have fire prevention responsibilities within their local government areas, principally to reduce fire hazards near council owned or managed assets, and minor roads.
The RFS is led by a Commissioner and is comprised of both paid employees and volunteer rural firefighters. Its functions are prescribed in the Rural Fires Act and related legislation such as the State Emergency Rescue Management Act 1989. The RFS functions are also described in Bush Fire Risk Management Plans, the State Emergency Management Plan, District Service Agreements, and RFS procedural documents. Some of the core responsibilities of the RFS include:
- preventing, mitigating, and suppressing fires across New South Wales
- recruiting and managing volunteer firefighters in rural fire brigades
- purchasing and allocating firefighting fleet assets to local councils
- establishing District Service Agreements with local councils to give the RFS permissions to use the fleet assets that are vested with local councils
- carrying out fleet maintenance and repairs when authorised to do so by local councils
- inspecting the firefighting fleet
- supporting land managers and private property owners with fire prevention activity.
In order to carry out its legislated firefighting functions, the RFS relies on land-based vehicles, marine craft, and aircraft. These different firefighting appliance types are referred to in this report as the firefighting fleet or fleet assets.
RFS records show that in 2021 there were 6,345 firefighting fleet assets across NSW. Most of the land-based appliances commonly associated with firefighting, such as water pumpers and water tankers, are purchased by the RFS and vested with local councils under the Rural Fires Act. The vesting of firefighting assets with local councils means that the assets are legally owned by the council for which the asset has been purchased. The RFS is able to use the firefighting assets through District Service Agreements with local councils or groups of councils.
In addition to the land-based firefighting fleet, the RFS owns a fleet of aircraft with capabilities for fire mitigation, suppression, and reconnaissance during fire events. The RFS hires a fleet of different appliances to assist with fire prevention and hazard reduction works. These include aircraft for firefighting and fire reconnaissance, and heavy plant equipment such as graders and bulldozers for hazard reduction. Hazard reduction works include the clearance of bush and grasslands around major roads and protected assets, and the creation and maintenance of fire trails and fire corridors to assist with fire response activity.
The RFS is organised into 44 RFS Districts and seven Area Commands. The RFS relies on volunteer firefighters to assist in carrying out most of its firefighting functions. These functions may include the operation of the fleet during fire response activities and training exercises, and the routine inspection of the fleet to ensure it is maintained according to fleet service standards. Volunteer fleet inspections are supervised by the RFS Fire Control Officer.
In 2021 there were approximately 73,000 volunteers located in 1,993 rural fire brigades across the State, making the RFS the largest volunteer fire emergency service in Australia. In addition to brigade volunteers, the RFS has approximately 1,100 salaried staff who occupy leadership and administrative roles at RFS headquarters and in the 44 RFS Districts.
Local councils have legislative responsibilities relating to bushfire planning and management. Some of the core responsibilities of local councils include:
- establishing and equipping rural fire brigades
- contributing to the Rural Fire Fighting Fund
- vested ownership of land-based rural firefighting equipment
- carrying out firefighting fleet maintenance and repairs
- conducting bushfire prevention and hazard reduction activity.
The objective of this audit was to assess the effectiveness of the RFS and local councils in planning and managing equipment for bushfire prevention, mitigation, and suppression. From the period of 2017 to 2022 inclusive, we addressed the audit objective by examining whether the NSW RFS and local councils effectively:
- plan for current and future bushfire fleet requirements
- manage and maintain the fleet required to prevent, mitigate, and suppress bushfires in NSW.
This audit did not assess:
- the operational effectiveness of the RFS bushfire response
- the effectiveness of personal protective equipment and clothing
- the process of vesting of rural firefighting equipment with local councils
- activities of any other statutory authorities responsible for managing bushfires in NSW.
As the lead combat agency for the bushfire response in NSW, the RFS has primary responsibility for bushfire prevention, mitigation, and suppression.
Three local councils were selected as case studies for this audit, Hawkesbury City Council, Wagga Wagga City Council and Uralla Shire Council. These case studies highlight the ways in which the RFS and local councils collaborate and communicate in rural fire districts.
Conclusion
The RFS has focused its fleet development activity on modernising and improving the safety of its land-based firefighting fleet, and on the purchase of new firefighting aircraft
The RFS has reduced the average age of the firefighting fleet from approximately 21 years in 2017, to approximately 16 years in 2022. The RFS has also enhanced the aerial fleet with the addition of six new aircraft to add to the existing three aircraft.
Recommendations from inquiries into the 2019–20 bushfires have driven significant levels of fleet improvement activity, mainly focused on the addition of safety features to existing fleet appliances. The RFS has dedicated most of its efforts to purchasing and refurbishing firefighting appliances of the same type and in the same volumes year on year.
However, the RFS is unable to demonstrate how the composition, size, or the locations of the NSW firefighting fleet is linked to current fire prevention, mitigation, and suppression requirements, or future fire risks.
There is limited evidence that the RFS has undertaken strategic fleet planning or assessment of the capability of the firefighting fleet to respond to current bushfire events or emerging fire risks
The RFS has not established a methodology to assess the composition or volumes of the firefighting fleet against fire activity and fire risks in the 44 NSW Rural Fire Districts. The RFS has not developed performance measures or targets to assess or report on fire response times in each of its districts, nor has it developed measures to assess the effectiveness of responses according to fire sizes and fire types. Similarly, the RFS has limited performance measures to assess fire prevention activity, or to assess fuel load reduction works, so it is not possible to assess whether its fleet capabilities are fit for these purposes.
The RFS does not have an overarching strategy to guide its planning, procurement, or distribution of the firefighting fleet
RFS fleet planning and fleet allocations are based on historical fleet sizes and compositions, and distributed to locations where there are appropriately trained brigade volunteers.
The RFS takes an asset protection approach to bushfire prevention and planning that is based on the Australian and New Zealand Standard for Risk Management. This approach requires that the RFS identify assets at risk of fire, and develop treatment plans to protect these assets. However, fleet requirements are not linked to NSW asset protection plans, meaning that fleet is not allocated according to the identified risks in these plans. Further, the RFS does not develop fire prevention plans for areas where there are no identified assets.
The RFS has not conducted future-focused fleet research or planning into technologies that match fleet capabilities to emerging or future fire risks. Since the significant fire events of 2019–2020, the RFS has not changed its approach to planning for, or assessing, the operational capabilities of the fleet. The RFS advises it is scoping a project to match resources to risk, which it plans to commence in 2023.
The RFS does not have effective oversight of fleet maintenance activity across the State, and is not ensuring the accuracy of District Service Agreements where maintenance responsibilities are described
The RFS does not have a framework to ensure that District Service Agreements with local councils are accurate. Almost two thirds of service agreements have not been reviewed in the last ten years, and some do not reflect actual maintenance practices. There is no formalised process to ensure communication occurs between the RFS and local councils for fleet management and maintenance.
RFS fleet management systems at the central level are not integrated with RFS district-level databases to indicate when fleet assets are in workshops being maintained and serviced. The RFS has a new centralised Computer Aided Dispatch System that relies on accurate fleet locations and fleet condition information in order to dispatch vehicles to incidents and fires. A lack of interface between the district-level fleet systems and the centralised RFS fleet dispatch system, may impact on operational responses to bushfires.
The RFS has not made significant changes to the size or composition of the firefighting fleet in the past five years and does not have an overarching strategy to drive fleet development
Since 2017, the RFS has made minimal changes to its firefighting fleet volumes or vehicle types. The RFS is taking a fleet renewal approach to fleet planning, with a focus on refurbishing and replacing ageing firefighting assets with newer appliances and vehicles of the same classification and type. While the RFS has adopted a fleet renewal approach, driven by its Appliance Replacement Program Guide, it does not have a strategy or framework to guide its future-focused fleet development. There is no document that identifies and analyses bushfire events and risks in NSW, and matches fleet resources and fleet technologies to meet those risks. The RFS does not have fleet performance measures or targets to assess whether the size and composition of the fleet is meeting current or emerging bushfire climate hazards, or fuel load risks across its 44 NSW Fire Districts.
The RFS fleet currently comprises approximately 4,000 frontline, operational firefighting assets such as tankers, pumpers, and air and marine craft, and approximately 2,300 logistical vehicles, such as personnel transport vehicles and specialist support vehicles. Of the land-based firefighting vehicles, the RFS has maintained a steady number of approximately 3,800 tankers and 65 pumpers, year on year, for the past five years. This appliance type is an essential component of the RFS land-based, firefighting fleet with capabilities to suppress and extinguish fires.
Since 2017, most RFS fleet enhancement activity has been directed to upgrades and the modernisation of older fleet assets with new safety features. There is limited evidence of research into new fleet technologies for modern firefighting. The RFS fleet volumes and fleet types have remained relatively static since 2017, with the exception of the aerial firefighting fleet. Since 2017, the RFS has planned for, and purchased, six additional aircraft to add to the existing three aircraft in its permanent fleet.
While the RFS has made minimal changes to its fleet since 2017, in 2016 it reduced the overall number of smaller transport vehicles, by purchasing larger vehicles with increased capacity for personnel transport. The consolidation of logistical and transport vehicles accounts for an attrition in fleet numbers from 7,058 in 2016, to 6,315 in 2017 as shown in Exhibit 2.
The firefighting fleet management system is not always updated in a timely manner due to insufficient RFS personnel with permissions to make changes in the system
The RFS uses a fleet management system known as SAP EAM to record the location and status of firefighting fleet assets. The system holds information about the condition of the firefighting fleet, the home location of each fleet asset, and the maintenance, servicing, and inspection records of all assets. The RFS uses the system for almost all functions related to the firefighting fleet, including the location of vehicles so that they can be dispatched during operational exercises or fire responses.
Staff at RFS Headquarters are responsible for creating and maintaining asset records in the fleet management system. RFS District staff have limited permissions in relation to SAP EAM. They are able to raise work orders for repairs and maintenance, upload evidence to show that work has been done, and close actions in the system.
RFS District staff are not able to enter or update some fleet information in the system, such as the location of vehicles. When an RFS District receives a fleet appliance, it cannot be allocated to a brigade until the location of the asset is accurately recorded in the system. The location of the asset must be updated in the SAP EAM system by staff at RFS Headquarters. District staff can request system support from staff at RFS Headquarters to enter this information. At the time of writing, the position responsible for updating the fleet management system at RFS Headquarters was vacant, and RFS District personnel reported significant wait times in response to their service requests.
The RFS conducts annual audits of SAP EAM system information to ensure data is accurate and complete. RFS staff are currently doing data cleansing work to ensure that fleet allocations are recorded correctly in the system.
Communication between brigades, local councils and the RFS needs improvement to ensure that fleet information is promptly updated in the fleet management system
RFS brigade volunteers do not have access to the fleet management system. When fleet assets are used or moved, volunteers report information about the location and condition of the fleet to RFS District staff using a paper-based form, or by email or phone. Information such as vehicle mileage, engine hours, and defects are all captured by volunteers in a logbook which is scanned and sent to RFS District staff. RFS District staff then enter the relevant information into the fleet management system, or raise a service ticket with RFS Headquarters to enter the information.
Brigade volunteers move fleet assets for a range of reasons, including for fire practice exercises. If volunteers are unable to report the movement of assets to RFS District staff in a timely manner, this can lead to system inaccuracies. Lapses and backlogs in record keeping can occur when RFS staff at district offices or at Headquarters are not available to update records at the times that volunteers report information. A lack of accurate record keeping can potentially impact on RFS operational activities, including fire response activity.
Brigade volunteers notify RFS District staff when fleet appliances are defective, or if they have not been repaired properly. District staff then enter the information into the fleet management system. The inability of volunteers to enter information into the system means they have no visibility over their requests, including whether they have been approved, actioned, or rejected.
Local councils are responsible for servicing and maintaining the firefighting fleet according to the Rural Fires Act, but this responsibility can be transferred to the RFS through arrangements described in local service agreements. Council staff record all fleet servicing and maintenance information in their local systems. The types of fleet information that is captured in local council records can vary between councils. RFS staff described the level of council reporting, and the effectiveness of this process, as 'mixed'.
Councils use different databases and systems to record fleet assets, and some councils are better resourced for this activity than others
Firefighting fleet information is recorded in different asset management systems across NSW. Each council uses its own asset management system to record details about the vested fleet assets. All three councils that were interviewed for this audit had different systems to record information about the fleet. In addition, the type of information captured by the three councils was varied.
System | Hawkesbury City Council | Uralla Shire Council | Wagga Wagga City Council |
---|---|---|---|
Financial asset management system | TechnologyOne | Civica | Assetic |
Asset management system | TechnologyOne | Manual | MEX |
Local councils have varying levels of resources and capabilities to manage the administrative tasks associated with the firefighting fleet. Some of the factors that impact on the ability of councils to manage administrative tasks include: the size of the council; the capabilities of the information management systems, the size of the staff team, and the levels of staff training in asset management.
Uralla Shire Council is a small rural council in northern NSW. This council uses financial software to record information about the firefighting fleet. While staff record information about the condition of the asset, its replacement value, and its depreciation, staff do not record the age of the asset, or its location. Staff manually enter fleet maintenance information into their systems. Uralla Shire Council would like to purchase asset maintenance software that generates work orders for fleet repairs and maintenance. However, the council does not have trained staff in the use of asset management software, and the small size of the fleet may not make it financially worthwhile.
The Hawkesbury City Council uses a single system to capture financial and asset information associated with the firefighting fleet. Hawkesbury is a large metropolitan council located north-west of Sydney, with a relatively large staff team in comparison with Uralla Shire Council. The Hawkesbury City Council has given RFS District staff access to their fleet information system. RFS District staff can directly raise work orders for fleet repairs and maintenance through the council system, and receive automated notifications when the work is complete.
Two of the three audited councils report that they conduct annual reviews of fleet assets to assess whether the information they hold is accurate and up-to-date.
More than half of the fleet maintenance service agreements between the RFS and local councils have not been reviewed in ten years, and some do not reflect local practices
Local councils have a legislated responsibility to service, repair, and maintain the firefighting fleet to service standards set by the RFS. Councils may transfer this responsibility to the RFS through District Service Agreements. The RFS Districts are responsible for ensuring that the service agreements are current and effective.
The RFS does not have monitoring and quality control processes to ensure that service agreements with local councils are reviewed regularly. The RFS has 73 service agreements with local councils or groups of councils. Sixty-three per cent of service agreements had not been reviewed in the last ten years. Only four service agreements specify an end date and, of those, one agreement expired in 2010 and had not been reviewed at the time of this audit.
The RFS does not have a framework to ensure that service agreements with local councils reflect actual practices. Of the three councils selected for audit, one agreement does not describe the actual arrangements for fleet maintenance practices in RFS Districts. The service agreement with Hawkesbury City Council specifies that the RFS will maintain the firefighting fleet on behalf of council when, in fact, council maintains the firefighting fleet. The current agreement commenced in 2012, and at the time of writing had not been updated to reflect local maintenance practices.
When District Service Agreements are not reviewed periodically, there is a risk that neither local councils nor the RFS have clear oversight of the status of fleet servicing, maintenance, and repairs.
RFS District Service Agreements set out a requirement that RFS and local councils establish a liaison committee. Liaison committees typically include council staff, RFS District staff, and RFS brigade volunteers. While service agreements state that liaison committees must meet periodically to monitor and review the performance of the service agreement, committee members determine when and how often the committee meets.
RFS District staff and staff at the three audited councils are not meeting routinely to review or update their service agreements. At Wagga Wagga City Council, staff meet with RFS District staff each year to report on activity to fulfil service agreement requirements. Uralla Shire Council staff did not meet routinely with RFS District staff before 2021. When liaison committees do not meet regularly, there is a risk that the RFS and local councils have incorrect or outdated information about the location, status, or condition of the firefighting fleet. Given that councils lack systems to track and monitor fleet locations, regular communication between the RFS and local councils is essential.
The RFS has not established processes to ensure that local councils and RFS District personnel meet and exchange information about the fleet. Of the three councils selected for this audit, one council had not received information about the number, type, or status of the fleet for at least five years, and did not receive an updated list of appliances until there was a change in RFS District personnel. This has impacted on the accuracy of council record keeping. Councils do not always receive notification about new assets or information about the location of assets from the RFS, and therefore cannot reflect this information in their accounting and reporting.
RFS area commands audit system records to ensure fleet inspections occur as planned, but central systems are not always updated, creating operational risks
RFS District staff are required by the Rural Fires Act to ensure the firefighting fleet is inspected at least once a year. Regular inspections of the fleet are vital to ensure that vehicles are fit-for-purpose and safe for brigade volunteers. Inspections are also fundamental to the operational readiness and capability of RFS to respond to fire incidents.
RFS Area Command personnel conduct audits of fleet maintenance data to ensure that fleet inspections are occurring as planned. These inspections provide the RFS with assurance that the fleet is being maintained and serviced by local council workshops, or third-party maintenance contractors.
Some RFS Districts run their own fleet management systems outside of the central management system. They do this to manage their fleet inspection activity effectively. Annual fleet inspection dates are programmed by staff at RFS Headquarters. Most of the inspection dates generated by RFS Headquarters are clustered together and RFS Districts need to separate inspection times to manage workloads over the year. Spreading inspection dates is necessary to avoid exceeding the capacity of local council workshops or third party contractors, and to ensure that fleet are available during the bushfire season.
The fleet inspection records at RFS Headquarters are not always updated in a timely manner to reflect actual inspection and service dates of vehicles. District staff are not able to change fleet inspection and service dates in the central management system because they do not have the necessary permissions to access the system. The usual practice is for RFS District staff to notify staff at RFS Headquarters, and ask them to retrospectively update the system. As there is a lag in updating the central database, at a point in time, the actual inspection and service dates of vehicles can be different to the dates entered in the central fleet management system.
Fleet inspection and maintenance records must be accurately recorded in the central RFS management system for operational reasons. RFS Headquarters personnel need to know the location and maintenance status of fleet vehicles at all times in order to dispatch vehicles to incidents and fires. The RFS fleet management system is integrated with a new Computer Aided Dispatch System. The Computer Aided Dispatch System assigns the nearest and most appropriate vehicles to fire incidents. The system relies on accurate fleet locations and fleet condition information in order to dispatch these vehicles.
There is a risk that RFS Headquarters' systems do not contain accurate information about the location and status of vehicles. Some may be in workshops for servicing and repair, while the system may record them as available for dispatch. As there are many thousands of fleet vehicles, all requiring an annual service and inspection, a lack of accurate record keeping has wide implications for State fire operations.
RFS is currently exploring ways to improve the ways in which fleet inspections are programmed into the fleet management system.
RFS provides funds to councils to assist with maintaining the firefighting fleet, but does not receive fleet maintenance cost information from all local councils
Each year the RFS provides local councils with a lump sum to assist with the cost of repairing and maintaining the firefighting fleet. This lump sum funding is also used for meeting the costs of maintaining brigade stations, utilities, and other miscellaneous matters associated with RFS business.
In 2020–21, the RFS provided NSW local councils with approximately $23 million for maintenance and repairs of appliances, buildings, and utilities. Ninety councils were provided with lump sum funding in 2021, receiving on average $257,000. The amounts received by individual councils ranged from $56,200 to $1,029,884.
Some councils provide itemised repairs and maintenance reports to RFS District staff, showing the work completed and the cost of that work. However, not all councils collect this information or provide it to the RFS. Local councils collect fleet maintenance information in their local council systems. In some cases, the responsibility for fleet maintenance is shared across a group of councils, and not all councils have oversight of this process.
The RFS has not taken steps to require local councils to provide itemised maintenance costings for the firefighting fleet. Thus, the RFS does not have a clear understanding of how local councils are spending their annual fleet maintenance funding allocations. The RFS does not know if the funding allocations are keeping pace with the actual cost of repairing and maintaining the fleet.
RFS District staff report that funding shortfalls are impacting on the prioritisation of fleet servicing and maintenance works in some council areas. When fleet servicing and maintenance is not completed routinely or effectively, there is a risk that it can negatively impact the overall condition and lifespan of the vehicle. Poor processes in relation to fleet maintenance and repair risk impacting on the operational capabilities of the fleet during fire events.
The timeliness and effectiveness of fleet servicing and maintenance is affected by resource levels in RFS Districts and local councils
Local councils have a legislated responsibility to service and maintain the firefighting fleet to the service standards set by the RFS. Fleet maintenance is usually done by the entity with the appropriate workshops and resources, and the maintenance arrangements are described in District Service Agreements. RFS District staff conduct annual inspections to ensure that the firefighting fleet has been serviced and maintained appropriately, and is safe for use by brigade volunteers. If the fleet has not been maintained to RFS service standards or timelines, RFS District staff may work with local councils to support or remediate these works.
The effectiveness of this quality control activity is dependent on relationships and communication between the RFS Districts and local councils. While some RFS staff reported having positive relationships with local councils, others said they struggled to get fleet maintenance work done in a timely manner. Some councils reported that funding shortfalls for fleet maintenance activity was impacting on the prioritisation of RFS fleet maintenance works. When fleet maintenance work is not completed routinely or effectively, it can negatively impact on the overall condition and lifespan of the vehicle. It can also reduce the capacity of the RFS to respond to fire events.
Fleet quality control activities are carried out by RFS District staff. In some of the smaller RFS Districts, one person is responsible for liaising with local councils and brigade volunteers about fleet maintenance and repairs. In the regions where resources are limited, there is less ability to maintain ongoing communication. This is impacting on fleet service and maintenance timelines and the timeliness of fleet monitoring activity.
The RFS has mutual support arrangements with agencies in NSW and interstate, though shared fleet levels are yet to be quantified
The RFS has arrangements with state, federal, and international fire authorities to provide mutual support during fire incidents. In NSW, the RFS has agreements with the three statutory authorities – Fire and Rescue NSW, the Forestry Corporation of NSW, and the NSW National Parks and Wildlife Service. The agreement with Fire and Rescue NSW provides a framework for cooperation and joint operations between the agencies. The agreements with the Forestry Corporation of NSW and the NSW National Parks and Wildlife Service describe the control and coordination arrangements for bush and grass fires across NSW. These arrangements are set out in legislation and incorporated into local Bush Fire Risk Management Plans.
The RFS has agreements with fire authorities in three of the four Australian states and territories that share a border with NSW – the Australian Capital Territory, Queensland, and South Australia. Each agreement sets out the arrangements for mutual assistance and joint operations, including arrangements for sharing aircraft. The agreement between the RFS and Victoria had lapsed. The RFS told the NSW Bushfire Inquiry that the agreement with Victoria would be finalised by June 2020. In June 2022, the RFS reported that the agreement was in the process of being finalised.
The arrangements for mutual aid from Western Australia, Northern Territory and Tasmania, are managed by the National Resource Sharing Centre. These agreements set out the arrangements for interstate assistance between Australian fire services, emergency services, and land management agencies in those states and territories.
These mutual support arrangements may assist during state-based fire events. However, when there are competing demands for resources, such as during the bushfires of 2019–2020, there can be limits on fleet availability. During the 2019–2020 fires, resources were stretched in all jurisdictions as these fires affected NSW, Victoria, and Queensland.
There are opportunities for the RFS and other NSW agencies to quantify fleet resources across the State and identify assets that can be mobilised for different fire activities. This form of fleet planning may be used to enhance surge capabilities during times of high fire activity. There are also opportunities for the RFS and other agencies to match the levels of shared assets to projected bushfire risks.
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 #376 - released 27 February 2023
Actions for Government's acquisition of private property: Sydney Metro project
Government's acquisition of private property: Sydney Metro project
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.
Conclusion
Acquisitions of property for the Sydney Metro project were mostly effective in the sample of acquisitions we assessed. Sydney Metro followed requirements for communication with affected parties. Compensation processes were conducted in compliance with legislative requirements, but compensation determinations for compulsory acquisitions were not completed within legislated time frames due to delays in receiving these from the Valuer General. Governance and probity processes were followed consistently, with some relatively minor exceptions.
Sydney Metro has detailed guidelines for acquisitions that are based on relevant legislation and government policy. In the 20 acquisitions we assessed for this audit, these procedures were followed consistently. This included adhering to minimum timelines for negotiation periods, engaging independent valuers and other experts when needed, and complying with governance and probity processes.
Sydney Metro staff followed requirements for communication and support for residential acquisitions by assigning ‘personal managers’ and providing additional support to affected parties when needed. The Centre for Property Acquisition (CPA) has overseen reforms to the residential property acquisition process in recent years. These reforms include the introduction of the NSW Property Acquisition Standards and the use of personal managers, in addition to the existing acquisition managers, for residential acquisitions. However, the CPA has not assessed the impact of these changes on the experiences on people affected by property acquisitions.
Sydney Metro did not comply with the legislative requirement to provide a formal compensation notice to the affected party within 45 days of a compulsory acquisition starting in any of the eight relevant acquisitions in our sample. This was because Sydney Metro must wait for the Valuer General to complete a compensation determination before Sydney Metro can send the compensation notice, and the Valuer General did not do this within 45 days. We acknowledge that Sydney Metro does not have full control over this process, and that it has taken steps to mitigate the impact of delays on affected parties.
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