Reports
Design and administration of the WestInvest program
What this report is about
WestInvest is a $5 billion funding program announced in September 2021 to provide ‘local infrastructure to help communities hit hard by COVID-19’ in 15 local government areas (LGAs) selected by the government. It was divided into three parts: $3 billion for NSW government agency projects; $1.6 billion for competitive grants to councils and community groups; and $400 million for non-competitive grants to councils.
Following the change of government at the 2023 election, the program was renamed the Western Sydney Infrastructure Grants Program. Funding decisions made for the community and local government grants were retained, but multiple funding decisions for the NSW government projects were changed.
The audit objective was to assess the integrity of the design and implementation of the program and the award of program funding.
Findings
The design of the program lacked integrity because it was not informed by robust research or analysis to justify the commitment of public money to a program of this scale.
The then government did not have sufficient regard to the implications for the state's credit rating. A risk to the credit rating arose because the government may have been perceived to be using proceeds from major asset sales to fund new expenditure, rather than pay down its debt.
Decisions about program design were made by the then Treasurer's office without consultation with affected communities. The rationale for these decisions was not documented or made public.
For the NSW government projects, funding allocations did not follow advice from departments. Many funded projects did not meet the objectives of the program.
The two other rounds of the program were administered effectively, except for some gaps in documentation and quality assurance. The program guidelines did not require an equitable or needs-based distribution of funding across LGAs and there was a significant imbalance in funding between the 15 LGAs.
Recommendations
Our recommendations for the administration of future funding programs included:
- considering whether competitive grants are the best way to achieve the program's purpose
- completing program design and guidelines before announcements
- ensuring adequate quality assurance.
We also recommended that when providing advice for submissions by Ministers to Cabinet, agencies should ensure that departmental advice is clearly identified and is distinct from other advice or political considerations.
Read the PDF report
Parliamentary reference - Report number #391 - released 28 February 2024
Flood housing response
What this report is about
Extreme rainfall across eastern Australia in 2021 and 2022 led to a series of major flood events in New South Wales.
This audit assessed how effectively the NSW Government provided emergency accommodation and temporary housing in response to the early 2022 Northern Rivers and late 2022 Central West flood events.
Responsible agencies included in this audit were the Department of Communities and Justice, NSW Reconstruction Authority, the former Department of Planning and Environment, the Department of Regional NSW and the Premier’s Department.
Findings
The Department of Communities and Justice rapidly provided emergency accommodation to displaced persons immediately following these flood events.
There was no plan in place to guide a temporary housing response and agencies did not have agency-level plans for implementing their responsibilities.
The NSW Government rapidly procured and constructed temporary housing villages. However, the amount of temporary housing provided did not meet the demand.
There is an extensive waitlist for temporary housing and the remaining demand in the Northern Rivers is unlikely to be met. The NSW Reconstruction Authority has not reviewed this list to confirm its accuracy.
Demobilisation plans for the temporary housing villages have been developed, but there are no long-term plans in place for the transition of tenants out of the temporary housing.
Agencies are in the process of evaluating the provision of emergency accommodation and temporary housing.
The findings from the 2022 State-wide lessons process largely relate to response activities.
Audit recommendations
The NSW Reconstruction Authority should:
- Develop a plan for the provision of temporary housing.
- Review the temporary housing waitlist.
- Determine a timeline for demobilising the temporary housing villages.
- Develop a strategy to manage the transition of people into long-term accommodation.
- Develop a process for state-wide recovery lessons learned.
All audited agencies should:
- Finalise evaluations of their role in the provision of emergency accommodation and temporary housing.
- Develop internal plans for implementing their roles under state-wide plans.
Read the PDF report
Parliamentary reference - Report number #389 - released 22 February 2024
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.
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
Premier and Cabinet 2023
What this report is about
Results of the Premier and Cabinet portfolio of agencies' financial statement audits for the year ended 30 June 2023.
What we found
Unqualified audit opinions were issued for all Premier and Cabinet portfolio agencies.
What the key issues were
The Administrative Arrangements Orders, effective 1 July 2023, changed the name of the Department of Premier and Cabinet to the Premier's Department and transferred parts of Department of Premier and Cabinet to The Cabinet Office.
The number of monetary misstatements identified in our audits decreased from 15 in 2021–22 to 12 in 2022–23.
The total number of management letter findings across the portfolio of agencies increased from ten in 2021–22 to 20 in 2022–23.
Thirty per cent of all issues were repeat issues. The most common repeat issues related to deficiencies in controls over financial reporting.
What we recommended
Portfolio agencies should:
- ensure any changes to employee entitlements are assessed for their potential financial statements impact under the relevant Australian Accounting Standards
- prioritise and address internal control deficiencies identified in Audit Office management letters.
This report provides Parliament and other users of the Premier and Cabinet portfolio of agencies’ financial statements with the results of our audits, analysis, conclusions and recommendations in the following areas:
- financial reporting
- audit observations.
Financial reporting is an important element of good governance. Confidence and transparency in public sector decision-making are enhanced when financial reporting is accurate and timely.
This chapter outlines our audit observations related to the financial reporting of agencies in the Premier and Cabinet portfolio of agencies (the portfolio) for 2023.
Section highlights
- Unqualified audit opinions were issued on all the portfolio agencies 2022–23 financial statements.
- The total number of errors (including corrected and uncorrected) in the financial statements decreased compared to the prior year.
Appropriate financial controls help ensure the efficient and effective use of resources and administration of agency policies. They are essential for quality and timely decision-making.
This chapter outlines our observations and insights from our financial statement audits of agencies in the Premier and Cabinet portfolio.
Section highlights
- The 2022–23 audits identified eight moderate risk issues across the portfolio of agencies. Of these, two were repeat issues, and related to password and security configuration and management of excessive annual leave.
- The total number of findings increased from ten to 20, which mainly related to deficiencies in controls over financial reporting and governance and oversight.
- The most common repeat issues related to weaknesses in controls over financial reporting.
Appendix one – Early close procedures
© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.
Transport and Infrastructure 2022
What the report is about
Result of the Transport and Infrastructure cluster agencies' financial statement audits for the year ended 30 June 2022.
What we found
Unmodified audit opinions were issued for all Transport and Infrastructure cluster agencies' financial statements.
An 'other matter' paragraph was included in TAHE's Independent Auditor's Report for its 30 June 2022 financial statements which draws attention to Transport and Asset Holding Entity's (TAHE) reliance on government-funded customers.
We included an ‘emphasis of matter’ paragraph in the Independent Auditor’s Report for State Transit Authority of New South Wales’ (the authority) 30 June 2022 financial statements, which draws attention to the financial statements being prepared on a liquidation basis as the authority’s principal activities ceased operations on 3 April 2022.
What the key issues were
The 2021–22 audits identified five high-risk findings:
- detailed business modelling to support returns from TAHE
- valuation of assets at TAHE
- control of assets at TAHE
- accounting and valuation of tree assets at Centennial Park and Moore Park Trust and Parramatta Park Trust.
Access and licence fees - TAHE
Revised commercial agreements were signed between TAHE, the operators and Transport for NSW on 23 June 2022 to reflect increased access and licence fees detailed in the 18 December 2021 Heads of Agreement.
TAHE’s ability to generate the expected return of 2.5% based on the current modelling is heavily reliant on the government funding the public rail operators (TAHE's customers).
There are risks that:
- TAHE will not be able to recontract for access and licence fees at a level that is consistent with current projections
- future governments' funding to TAHE's key customers will not be sufficient to fund payment of access and licence fees at a level that is consistent with current projections
- TAHE will be unable to grow its non-government revenues.
Valuation of assets - TAHE
Although TAHE's selected valuation of assets falls within an acceptable range, there remains a significant gap between what has been assessed as an acceptable range and TAHE's range.
What we recommended
Control of assets - TAHE
While we accepted TAHE’s position on control for the current year, NSW Treasury and TAHE should continue to monitor the risk that control of TAHE assets could change in future reporting periods. TAHE must continue to demonstrate control of its assets or the current accounting presentation would need to be reconsidered.
This report provides Parliament and other users of the Transport and Infrastructure cluster’s financial statements with the results of our audits, analysis, conclusions and recommendations in the following areas:
- financial reporting
- audit observations.
Financial reporting is an important element of good governance. Confidence and transparency in public sector decision-making are enhanced when financial reporting is accurate and timely.
This chapter outlines our audit observations related to the financial reporting of agencies in the Transport and Infrastructure cluster (the cluster) for 2022.
Section highlights
|
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 cluster.
Section highlights
|
Appendix one – Misstatements in financial statements submitted for audit
Appendix two – Early close procedures
Appendix three – Timeliness of financial reporting
Appendix four – Financial data
Copyright notice
© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.
Premier and Cabinet 2022
What the report is about
Result of the Premier and Cabinet cluster financial statement audits for the year ended 30 June 2022.
What we found
Unmodified audit opinions were issued for all Premier and Cabinet cluster agencies.
The machinery of government changes within the Premier and Cabinet cluster resulted in the transfer of net assets of $1 billion from the Department of Premier and Cabinet.
The Department of Premier and Cabinet, Public Service Commission and Parliamentary Counsel's Office accepted changes to their office leasing arrangements managed by Property NSW. These changes resulted in the collective de-recognition of $167.3 million of right-of-use assets, $225.1 million in lease liabilities and recognition of $47.8 million of other gains/losses.
What the key issues were
The number of issues we reported to management decreased.
Forty per cent of issues were repeated from the prior year.
Four moderate risk issues were reported in the management letters for Department of Premier and Cabinet and New South Wales Electoral Commission. Three out of the four moderate risk issues were repeat issues.
The repeat issues related to internal control deficiencies in agencies' including lack of updated procurement policies and procedures and information technology general controls.
Fast facts
The Premier and Cabinet cluster comprises seven agencies, delivering the government's objectives and facilitating stewardship of the public service.
- $0.2b property, plant and equipment as at 30 June 2022
- $3b total expenditure incurred in 2021–22
- 100% unqualified audit opinions issued on agencies’ 30 June 2022 financial statements
- 4 moderate risk findings identified
- 15 monetary misstatements reported in 2021–22
- 40% of reported issues were repeat issues
This report provides Parliament and other users of the Premier and Cabinet’s financial statements with the results of our audits, analysis, conclusions and recommendations in the following areas:
- financial reporting
- audit observations.
Financial reporting is an important element of good governance. Confidence and transparency in public sector decision-making are enhanced when financial reporting is accurate and timely.
This chapter outlines our audit observations related to the financial reporting of agencies in the Premier and Cabinet cluster for 2022.
Section highlights
|
Appropriate financial controls help ensure the efficient and effective use of resources and administration of agency policies. They are essential for quality and timely decision making.
This chapter outlines our observations and insights from our financial statement audits of agencies in the Premier and Cabinet cluster.
Section highlights
|
Appendix one – Early close procedures
Copyright notice
© Copyright reserved by the Audit Office of New South Wales. All rights reserved. No part of this publication may be reproduced without prior consent of the Audit Office of New South Wales. The Audit Office does not accept responsibility for loss or damage suffered by any person acting on or refraining from action as a result of any of this material.
Audit Insights 2018-2022
What the report is about
In this report, we have analysed the key findings and recommendations from our audit reports over the past four years.
This analysis includes financial audits, performance audits, and compliance audits of state and local government entities that were tabled in NSW Parliament between July 2018 and February 2022.
The report is framed by recognition that the past four years have seen significant challenges and emergency events.
The scale of government responses to these events has been wide-ranging, involving emergency response coordination, service delivery, governance and policy.
The report is a resource to support public sector agencies and local government to improve future programs and activities.
What we found
Our analysis of findings and recommendations is structured around six key themes:
- Integrity and transparency
- Performance and monitoring
- Governance and oversight
- Cyber security and data
- System planning for disruption
- Resource management.
The report draws from this analysis to present recommendations for elements of good practice that government agencies should consider in relation to these themes. It also includes relevant examples from recent audit reports.
In this report we particularly call out threats to the integrity of government systems, processes and governance arrangements.
The report highlights the need for balanced advice to government on options and risks, for transparent documentation and reporting of directions and decisions, and for early and open sharing of information with integrity bodies and audit.
A number of the matters highlighted in this report are similar to those described in our previous Insights Report, (Performance Audit Insights: key findings from 2014–2018) specifically in relation to cyber and information security, to performance measurement, reporting and evaluation, and system and workforce planning and capability.
Fast facts
- 72 audits included in the Audit Insights 2018–2022 analysis
- 4 years of audits tabled by the Auditor-General for New South Wales
- 6 key themes for Audit Insights 2018–2022.
I am pleased to present the Audit Insights 2018–2022 report. This report describes key findings, trends and lessons learned from the last four years of audit. It seeks to inform the New South Wales Parliament of key risks identified and to provide insights and suggestions to the agencies we audit to improve performance across the public sector.
The report is framed by a very clear recognition that governments have been responding to significant events, in number, character and scale, over recent years. Further, it acknowledges that public servants at both state and council levels generally bring their best selves to work and diligently strive to deliver great outcomes for citizens and communities. The role of audit in this context is to provide necessary assurance over government spending, programs and services, and make suggestions for continuous improvement.
A number of the matters highlighted in this report are similar to those described in our previous Insights Report, (Performance Audit Insights: key findings from 2014–2018) specifically in relation to cyber and information security, to performance measurement, reporting and evaluation, and system and workforce planning and capability.
However, in this report we particularly call out threats to the integrity of government systems, processes and governance arrangements. We highlight the need for balanced advice to government on options and risks, for transparent documentation and reporting of directions and decisions, and for early and open sharing of information with integrity bodies and audit. Arguably, these considerations are never more important than in an increasingly complex environment and in the face of significant emergency events and they will be key areas of focus in our future audit program.
While we have acknowledged the challenges of the last few years have required rapid responses to address the short-term impacts of emergency events, there is much to be learned to improve future programs. I trust that the insights developed in this report provide a helpful resource to public sector agencies and local government across New South Wales. I would be pleased to receive any feedback you may wish to offer.
Margaret Crawford
Auditor-General for New South Wales
| Integrity and transparency | Performance and monitoring | Governance and oversight | Cyber security and data | System planning | Resource management |
| Insufficient documentation of decisions reduces the ability to identify, or rule out, misconduct or corruption. | Failure to apply lessons learned risks mistakes being repeated and undermines future decisions on the use of public funds. | The control environment should be risk-based and keep pace with changes in the quantum and diversity of agency work. | Building effective cyber resilience requires leadership and committed executive management, along with dedicated resourcing to build improvements in cyber security and culture. | Priorities to meet forecast demand should incorporate regular assessment of need and any emerging risks or trends. Absence of an overarching strategy to guide decision-making results in project-by-project decisions lacking coordination. | Governments must weigh up the cost of reliance on consultants at the expense of internal capability, and actively manage contracts and conflicts of interest. |
| Government entities should report to the public at both system and project level for transparency and accountability. | Government activities benefit from a clear statement of objectives and associated performance measures to support systematic monitoring and reporting on outcomes and impact. | Management of risk should include mechanisms to escalate risks, and action plans to mitigate risks with effective controls. | In implementing strategies to mitigate cyber risk, agencies must set target cyber maturity levels, and document their acceptance of cyber risks consistent with their risk appetite. | Service planning should establish future service offerings and service levels relative to current capacity, address risks to avoid or mitigate disruption of business and service delivery, and coordinate across other relevant plans and stakeholders. | Negotiations on outsourced services and major transactions must maintain focus on integrity and seeking value for public funds. |
| Entities must provide balanced advice to decision-makers on the benefits and risks of investments. | Benefits realisation should identify responsibility for benefits management, set baselines and targets for benefits, review during delivery, and evaluate costs and benefits post-delivery. | Active review of policies and procedures in line with current business activities supports more effective risk management. | Governments hold repositories of valuable data and data capabilities that should be leveraged and shared across government and non-government entities to improve strategic planning and forecasting. | Formal structures and systems to facilitate coordination between agencies is critical to more efficient allocation of resources and to facilitate a timely response to unexpected events. | Transformation programs can be improved by resourcing a program management office. |
| Clear guidelines and transparency of decisions are critical in distributing grant funding. | Quality assurance should underpin key inputs that support performance monitoring and accounting judgements. | Governance arrangements can enable input into key decisions from both government and non-government partners, and those with direct experience of complex issues. | Workforce planning should consider service continuity and ensure that specialist and targeted roles can be resourced and allocated to meet community need. | ||
| Governments must ensure timely and complete provision of information to support governance, integrity and audit processes. | |||||
| Read more | Read more | Read more | Read more | Read more | Read more |
This report brings together a summary of key findings arising from NSW Audit Office reports tabled in the New South Wales Parliament between July 2018 and February 2022. This includes analysis of financial audits, performance audits, and compliance audits tabled over this period.
- Financial audits provide an independent opinion on the financial statements of NSW Government entities, universities and councils and identify whether they comply with accounting standards, relevant laws, regulations, and government directions.
- Performance audits determine whether government entities carry out their activities effectively, are doing so economically and efficiently, and in accordance with relevant laws. The activities examined by a performance audit may include a selected program or service, all or part of an entity, or more than one government entity. Performance audits can consider issues which affect the whole state and/or the local government sectors.
- Compliance audits and other assurance reviews are audits that assess whether specific legislation, directions, and regulations have been adhered to.
This report follows our earlier edition titled 'Performance Audit Insights: key findings from 2014–2018'. That report sought to highlight issues and themes emerging from performance audit findings, and to share lessons common across government. In this report, we have analysed the key findings and recommendations from our reports over the past four years. The full list of reports is included in Appendix 1. The analysis included findings and recommendations from 58 performance audits, as well as selected financial and compliance reports tabled between July 2018 and February 2022. The number of recommendations and key findings made across different areas of activity and the top issues are summarised at Exhibit 1.
The past four years have seen unprecedented challenges and several emergency events, and the scale of government responses to these events has been wide-ranging involving emergency response coordination, service delivery, governance and policy. While these emergencies are having a significant impact today, they are also likely to continue to have an impact into the future. There is much to learn from the response to those events that will help the government sector to prepare for and respond to future disruption. The following chapters bring together our recommendations for core elements of good practice across a number of areas of government activity, along with relevant examples from recent audit reports.
This 'Audit Insights 2018–2022' report does not make comparative analysis of trends in public sector performance since our 2018 Insights report, but instead highlights areas where government continues to face challenges, as well as new issues that our audits have identified since our 2018 report. We will continue to use the findings of our Insights analysis to shape our future audit priorities, in line with our purpose to help Parliament hold government accountable for its use of public resources in New South Wales.
Appendix one – Included reports, 2018–2022
Appendix two – About this report
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.
COVID-19: response, recovery and impact
What the report is about
This report draws together the financial impact of COVID-19 on the agencies integral to responses across the state government sector of New South Wales.
What we found
Since the COVID-19 pandemic hit NSW in January 2020, and until 30 June 2021, $7.5 billion was spent by state government agencies for health and economic stimulus. The response was largely funded by borrowings.
The key areas of spending since the start of COVID-19 in NSW to 30 June 2021 were:
- direct health response measures – $2.2 billion
- personal protective equipment – $1.4 billion
- small business grants – $795 million
- quarantine costs – $613 million
- increases in employee expenses and cleaning costs across most agencies
- vaccine distribution, including vaccination hubs – $71 million.
The COVID-19 pandemic significantly impacted the financial performance and position of state government agencies.
Decreases in revenue from providing goods and services were offset by increases in appropriations, grants and contributions, for health and economic stimulus funding in response to the pandemic.
Most agencies had expense growth, due to additional operating requirements to manage and respond to the pandemic along with implementing new or expanded stimulus programs and initiatives.
Response measures for COVID-19 have meant the NSW Government is unlikely to meet targets in the Fiscal Responsibility Act 2012 being:
- annual expense growth kept below long-term average revenue growth
- elimination of State’s unfunded superannuation liability by 2030.
Fast facts
- First COVID-19 case in NSW on 25 January 2020
- COVID-19 vaccinations commenced on 21 February 2021
- By 31 December 2021, 25.2 million PCR tests had been performed in NSW and 13.6 million vaccines administered, with 93.6% of the 16 and over population receiving two doses
- During 2020–21, NSW Health employed an extra 4,893 full-time staff and incurred $28 million in overtime mainly in response to COVID-19
- During 2020–21, $1.2 billion was spent on direct health COVID-19 response measures and $532 million was spent on quarantine for incoming international travellers
Section highlights
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Section highlights
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Facilitating and administering Aboriginal land claim processes
What the report is about
The Aboriginal Land Rights Act 1983 (NSW) (the Act) provides land rights over certain Crown land for Aboriginal Land Councils in NSW.
If a claim is made over Crown land (land owned and managed by government) and meets other criteria under the Act, ownership of that land is to be transferred to the Aboriginal Land Council.
This process is intended to provide compensation for the dispossession of land from Aboriginal people in NSW. It is a different process to the recognition of native title rights under Commonwealth law.
We examined whether relevant agencies are effectively facilitating and administering Aboriginal land claim processes. The relevant agencies are:
- Department of Premier and Cabinet (DPC)
- Department of Planning and Environment (DPE)
- NSW Aboriginal Land Council (NSWALC).
We consulted with Local Aboriginal Land Councils (LALCs) and other Aboriginal community representative groups to hear about their experiences.
What we found
Neither DPC nor DPE have established the resources required for the NSW Government to deliver Aboriginal land claim processes in a coordinated way, and which transparently commits to the requirements and intent of the Act.
Delays in determining land claims result in Aboriginal Land Councils being denied the opportunity to realise their statutory right to certain Crown land. Delays also create risks due to uncertainty around the ownership, use and development of Crown land.
DPC has not established governance arrangements to ensure accountability for outcomes under the Act, and effective risk management.
DPE lacks clear performance measures for the timely and transparent delivery of its claim assessment functions. DPE also lacks a well-defined framework for prioritising assessments.
LALCs have concerns about delays, and lack of transparency in the process.
Reviews since at least 2014 have recommended actions to address numerous issues and improve outcomes, but limited progress has been made.
The database used by DPC (Office of the Registrar) for the statutory register of land claims has not been upgraded or fully validated since the 1990s.
In 2020, DPE identified the transfer of claimable Crown land to LALCs to enable economic and cultural outcomes as a strategic priority. DPE has some activities underway to do this, and to improve how it engages with Aboriginal Land Councils – but DPE still lacks a clear, resourced strategy to process over 38,000 undetermined claims within a reasonable time.
What we recommended
In summary:
- DPC should lead strategic governance to oversee a resourced, coordinated program that is accountable for delivering Aboriginal land claim processes
- DPE should implement a resourced, ten-year plan that increases the rate of claim processing, and includes an initial focus on land grants
- DPE and DPC should jointly establish operational arrangements to deliver a coordinated interagency program for land claim processes
- DPC should plan an interagency, land claim spatial information system, and the Office of the Registrar should remediate and upgrade the statutory land claims register
- DPC and NSWALC should implement an education program (for state agencies and the local government sector) about the Act and its operations
- DPE should implement a five-year workforce development strategy for its land claim assessment function
- DPE should finalise updates to its land claim assessment procedures
- DPE should enhance information sharing with Aboriginal Land Councils to inform their claim making
- NSWALC should enhance information sharing and other supports to LALCs to inform their claim making and build capacity.
Fast facts
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The return of land under the Aboriginal Land Rights Act 1983 (NSW) (the Act) is intended to provide compensation for the dispossession of land from Aboriginal people in New South Wales. A claim on Crown land1 made by an Aboriginal Land Council that meets criteria under the Act is to be transferred to the claimant council as freehold title. The 2021 statutory review of the Act recognises the spiritual, social, cultural and economic importance of land to Aboriginal people.
The Minister for Aboriginal Affairs administers the Act, with support from Aboriginal Affairs NSW (AANSW) in the Department of Premier and Cabinet (DPC). AANSW also leads the delivery of Opportunity, Choice, Healing, Responsibility and Empowerment (OCHRE), the NSW Government's plan for Aboriginal affairs, and assists the Minister to implement the National Agreement on Closing the Gap – which includes a target for increasing the area of land covered by Aboriginal and Torres Strait Islander people's legal rights or interests.
The Act gives responsibility for registering land claims to an independent statutory officer, the Registrar of the Aboriginal Land Rights Act (the Registrar), whose functions are supported by the Office of the Registrar (ORALRA) which is resourced by AANSW.2
The Land and Environment Court of New South Wales has stated that there is an implied obligation for land claims to be determined within a reasonable time. The Minister administering the Crown Land Management Act 2016 (NSW) is responsible for determining land claims. This function is supported by the Department of Planning and Environment (DPE),3 whose staff assess and recommend claims for determination based on the criteria under section 36(1) of the Act. There is also a mechanism under the Act for land claims to be negotiated in good faith through an Aboriginal Land Agreement.
The NSW Aboriginal Land Council (NSWALC) is a statutory corporation constituted under the Act with a mandate to provide for the development of land rights for Aboriginal people in NSW, in conjunction with the network of 120 Local Aboriginal Land Councils (LALCs). LALCs are constituted over specific areas to represent Aboriginal communities across NSW. Both NSWALC and LALCs can make land claims.
DPC and DPE are responsible for governance and, in partnership with NSWALC, operational and information-sharing activities that are required to coordinate Aboriginal land claim processes. LALCs, statutory officers, government agencies, local councils, and other parties need to be engaged so that these processes are coordinated effectively and managed in a way that is consistent with the intent of the Act, and other legislative requirements.
The first land claim was lodged in 1983. The number of undetermined land claims has increased over time, and at 31 December 2021 DPE data shows 38,257 undetermined claims.
The issue of undetermined land claims has been publicly reported by the Audit Office since 2007. Recommendations to agencies to better facilitate processes and improve how functions are administered have been made in multiple reviews, including two Parliamentary inquiries in 2016.
The objective of this audit was to assess whether relevant agencies are effectively facilitating and administering Aboriginal land claim processes. In making this assessment, we considered whether:
- agencies (DPE, DPC (AANSW and ORALRA) and NSWALC) coordinate information and activities to effectively facilitate Aboriginal land claim processes
- agencies (DPE and DPC (ORALRA)) are effectively administering their roles in the Aboriginal land claim process.
We consulted with LALCs to hear about their experiences and priorities with respect to Aboriginal land claim processes and related outcomes. We have aimed to incorporate their insights into our understanding of their expectations of government with respect to delivering requirements, facilitating processes, and identifying opportunities for improved outcomes.
ConclusionThe Department of Premier and Cabinet (DPC) and the Department of Planning and Environment (DPE) are not effectively facilitating or administering Aboriginal land claim processes. Neither agency has established the resources required for the NSW Government to operate a coordinated program of activities to deliver land claim processes in a way that transparently commits to the requirements and intent of the Aboriginal Land Rights Act 1983 (NSW) (the Act). Arrangements to engage the NSW Aboriginal Land Council (NSWALC) in these activities have not been clearly defined. There are more than 38,000 undetermined land claims that cover approximately 1.12 million hectares of Crown land. As such, DPE has not been meeting its statutory requirement to determine land claims nor its obligation to do so within a reasonable time. Over 60 per cent of these claims were lodged with the Registrar of the Aboriginal Land Rights Act, for DPE to determine, more than five years ago. DPE’s Aboriginal Outcomes Strategy 2020–23 identifies transferring claimable Crown land to Local Aboriginal Land Councils (LALCs) as a priority to enable economic and cultural outcomes. Since mid-2020 DPE has largely focused on supporting LALCs to identify priority land claims for assessment and on negotiating Aboriginal Land Agreements. This work may support the compensatory intent of the Act but is in its early stages and is unlikely to increase the pace at which land claims are determined. Based on current targets, it will take DPE around 22 years to process existing undetermined land claims. Delays in processing land claims result in Aboriginal Land Councils being denied the opportunity to realise their statutory right to certain Crown land in NSW. The intent of the Act to provide compensation to Aboriginal people for the dispossession of land has been significantly constrained over time. Since 2014, numerous reviews have made recommendations to agencies to address systemic issues, improve processes, and enhance outcomes: but DPC and DPE have made limited progress with implementing these. Awareness of the intent and operations of the Act was often poor among staff from some State government agencies and local government representatives we interviewed for the audit. DPC has not established culturally informed, interagency governance to effectively oversee Aboriginal land claim processes – and ensure accountability for outcomes consistent with the intent of the Act, informed by the expectations of the NSWALC and LALCs. Such governance has not existed since at least 2017 (the audited period) and we have not seen evidence earlier. DPE still does not have performance indicators for its land claim assessment function that are based on a clear analysis of resources, that demonstrate alignment to defined outcomes, and which are reported routinely to key stakeholders, including NSWALC and LALCs. LALCs have raised strong concerns during our consultations, describing delays in the land claim process and the number of undetermined land claims as disrespectful. LALCs have also noted a lack of transparency in, and opportunity to engage with, Aboriginal land claim processes. DPE’s role in assessing Aboriginal land claims, and identifying opportunities for Aboriginal Land Agreements, requires specific expertise, evidence gathering and an understanding of the complex interaction between the Act and other legislative frameworks, including the Native Title Act 1993 (Cth) and the Crown Land Management Act 2016 (NSW). In mid-2020, DPE created an Aboriginal Land Strategy Directorate within its Crown lands division, increased staffing in land claim assessment functions, and set a target to increase the number of land claims to be granted in 2021–22. In the six months to December 2021, DPE granted more land claims (207 claims) than in most years prior. DPE has also assisted some LALCs to identify priority land claims for assessment. But the overall number of claims processed per year remains well below the historical (five-year) average number of claims lodged (2,506 claims). As such, DPE has not yet established an appropriately resourced workforce to assess the large number of undetermined land claims and engage effectively with Aboriginal Land Councils and other parties in the process. There also are notable gaps in DPE’s procedures that impact the transparency of the process, especially with respect to timeframes and the prioritisation of land claims for assessment. DPC (the Office of the Registrar of the Aboriginal Land Rights Act, ORALRA) has not secured or applied resources that would assist the Registrar to use discretionary powers, introduced in 2015, not to refer certain land claims to DPE for assessment (those not on Crown land). This could have improved the efficiency and coordination of end-to-end land claim processes. DPC (ORALRA) is also not effectively managing data and ensuring the functionality of the statutory Register of Aboriginal land claims. This contributes to inefficient coordination with DPE and NSWALC, and creates a risk of inconsistent information sharing with LALCs, government agencies, local councils and other parties. More broadly, responsibilities for sharing information about the location and status of land under claim are not well defined across agencies. These factors contribute to risks to Crown land with an undetermined land claim, which case law has found to establish inchoate property rights for the claimant Aboriginal Land Council.4 It can also lead to uncertainty around the ownership, use and development of Crown land, with financial implications for various parties. |
Since 1983, 53,861 Aboriginal land claims have been lodged with the Registrar.25
The Land and Environment Court of New South Wales has stated there is an implied obligation on the Crown Lands Minister to determine land claims within a reasonable time.26
As at 31 December 2021, DPE has processed less than a third (31 per cent) of these land claims: 14,273 were determined by the Crown Lands Minister (that is, granted or refused, in whole or part) and 2,562 were withdrawn. This amounts to 16,835 claims processed, including the negotiated settlement of 15 claims through three Aboriginal Land Agreements. As a result, DPE reports that approximately 163,900 hectares of Crown land has been granted to Aboriginal Land Councils since 1983 up to 31 December 2021.
There are 38,257 land claims awaiting determination, which cover about 1.12 million hectares of Crown land.
The 2017 report on the statutory review of the Act noted that the land claims ‘backlog’ was one of the ‘Top 5’ priorities identified by LALCs during consultations. The importance of this issue is consistent with findings from our consultations with LALCs in 2021 (see Exhibit 7).
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LALCs raised concerns about delays in the Aboriginal land claim process, including waiting decades for claims to be assessed and years for land to be transferred once granted. The large number of undetermined claims has been described by LALCs as disrespectful, and as reflecting under-resourcing by governments. LALCs reported that these delays undermine the compensatory intent of the Act, including by creating uncertainty for their plans to support the social and economic aspirations of their communities. |
Delays in delivering on the statutory requirement to determine land claims, and limited use of other mechanisms to process claims in consultation or agreement with NSWALC and LALCs, undermines the beneficial and remedial intent of Aboriginal land rights under the Act. It also:
- impacts negatively on DPE’s ability to comply with the statutory requirement to determine land claims, because often the older a claim becomes the more difficult it can be to gather the evidence required to assess it
- creates uncertainty around the ownership, use and development of Crown land, which can have financial impacts on Aboriginal Land Councils, government agencies, local councils and developers.
Risks that arise in the context of undetermined claims are discussed further in section 3.3.
26 Jerrinja Local Aboriginal Land Council v Minister Administering the Crown Lands Act [2007] NSWLEC 577 at 125. The Court stated, ‘While a reasonable time may vary on a case-by-case basis, a delay of 15 to 20 years in determining claims does not accord with any idea of reasonableness’.
NSW Treasury describes public sector governance as providing strategic direction, ensuring objectives are achieved, and managing risks and the use of resources responsibly with accountability.
Consistent with the NSW Treasury’s Risk Management Toolkit (TPP-12-03b), governance arrangements for Aboriginal land claim processes should ensure their effective facilitation and administration. That is, arrangements are expected to contribute to and oversee the performance of administrative processes and service delivery towards outcomes, and ensure that legal and policy compliance obligations are met consistent with community expectations of accountability and transparency.
DPC and DPE are responsible for governance and, in partnership with NSWALC, operational and information-sharing activities required to coordinate Aboriginal land claim processes. LALCs, statutory officers, government agencies, local councils, and other parties (such as native title groups and those with an interest in development on Crown land) need to be engaged so that these processes are coordinated effectively with risks managed – consistent with the intent of the Act, and other legislative requirements.
Policy commitments to Aboriginal people and communities made by the NSW Government in the OCHRE Plan and Closing the Gap priority reforms establish an expectation for culturally informed governance.
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LALCs expressed a strong desire to have their voices heard so that outcomes in the Aboriginal land claim process are informed by LALC aspirations and consistent with the intent of the Act. The importance of respect and transparency were consistently raised. The following quotes are from our consultations with LALCs during this audit which illustrate the inherent cultural value of land being returned, as well as the importance of its social and economic value and potential. There’s batches of land in and around town. This land is significant…We want to get the land activated to encourage economic development, and promote the community…our job is to step up to create infrastructure, employment, maintenance and services and lead by example. One of the best things we were able to do is develop a long term 20-year plan and where Crown Land could directly see where land was transferred to us and it was going to things like education, housing, health and other social programs… There has been a claim lodged on a parcel of land that has long lasting cultural significance, a place that is very special to the Aboriginal community members and holds a lot of history. If the claim lodged was successful this land would be used to strengthen the cultural knowledge of the local youth, through placing signage that depicts stories that have been passed down by the Elders, cultural talks and tours and school group visits. This land, although not large in size, has a significant number of cultural trees and artefacts. Aboriginal families and members of the LALC that have lived in our town are very protective of the site and others surrounding it, respecting the importance of the cultural history of the site. There is one, which is a cultural one. We received a land claim that contained a cultural site. This is the high point: we were given back lands that contained rock engravings, carvings. A real diamond for us, especially as an urban based land council. At the heart of the ALRA is the ability to claim Crown Land…The slow determination of claims gets in the way of us doing what we want to do, which is focus on our communities and address our real needs which are about health, wellbeing and culture. If we could realise these rights, we can address all sorts of socio-economic needs. We would become an economic benefit to the state…If it was operating well there could be more caring for Country too. |
Source: Excerpts from NSW Audit Office interviews with LALC representatives, facilitated by Indigenous consultants.
The Crown Lands Minister, supported by DPE, is required to determine whether Aboriginal land claims meet the criteria to be ‘claimable Crown lands’ under section 36(1) of the Act. DPE staff within its Crown Lands division are responsible for assessing land claims and preparing recommendation briefs to the Crown Lands Minister, or their delegate, on determination outcomes. That is, on whether to grant or refuse the claim.38 DPE staff also make decisions about which land claims within the large number of undetermined claims should be processed first.
Appendix one – Response from agencies
Appendix two – About the audit
Appendix three – Performance auditing
Banner image used with permission.
Title: Forces of Nature
Artist: Lee Hampton – Koori Kicks Art
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 #365 - released 28 April 2022.
