This overview summarises the significant findings included in my 2012 financial audit report, volumes three to eleven, and highlights NSW agencies’ overall achievements and challenges. The overview summarises key themes and messages arising from these audits to help readers understand common findings. Agencies and their audit and risk committees can use the overview to self-assess and identify issues that may be relevant to their organisations.

It found more than 85 per cent of the recommendations in my 2011 financial audit reports to Parliament were implemented in 2012. Whilst this is less than 100 per cent, NSW government agencies clearly acted on my significant recommendations. However, NSW government agencies need to do more to follow up more detailed recommendations that are made directly to management.

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

Some of the findings of the report include:

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

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

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

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

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

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

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

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

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

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

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

The report includes comments on NSW Treasury and agencies in the finance and superannuation sectors. The New South Wales public sector superannuation funds’ investments were $42.2 billion at 30 June 2010, up from $38.5 billion in 2009. Investment returns reached 14.5 per cent in 2009-10. This is a significant improvement on the investment returns of up to negative 18.4 per cent at the peak of the global financial crisis in 2008.
 

Agencies have managed the planning of outsourcing in a competent way. All agencies satisfactorily managed the contractual aspects of outsourcing. The Audit Office is of the opinion, however, that there is no objective evidence to demonstrate that agencies have achieved their goals in outsourcing IT. Most agencies had identified the current and expected costs and risks of outsourcing. Agencies were not able to demonstrate that the actual costs of outsourcing matched the expected costs.

Parliamentary reference - Report number #103 - released 23 October 2002

Of the sites examined, users would find that some offered a pleasant and productive experience. Using others would be onerous and frustrating. Some users would not be able in practice to access features on some sites. All sites, even the best, had aspects warranting better attention to users’ needs. The failure of some sites to provide important information about privacy, security and legal matters was of particular concern. For the sites evaluated there was little use of the web to foster two-way communication between the public and agencies on issues of concern or as part of the policy process. And it seems that consultation with users on site design is not always sufficiently undertaken. A website is more likely to be user-friendly if design is based on thorough consultation with users.

Parliamentary reference - Report number #99 - released 26 June 2002