A NSW Auditor General’s Report has found that the NSW Government and its agencies grossly underestimated the cost and number of people that would install systems under the Solar Bonus Scheme.

By October 2010, the estimated cost of the Scheme, if it continued the way it was going, would have reached $3.988 billion. More than ten times the original estimate of $362 million. In response to the increased cost, the gross tariff for new applicants was reduced from 60 to 20 cents reducing the estimated cost to $1.954 billion.

It was a statutory requirement that when 50 mega watts of installed capacity was reached, the Government would review the Scheme. By the time the review was completed the installed capacity had reached 101 mega watts.

On 31 October 2011, the Auditor-General, Mr Peter Achterstraat, released Volume Three Report to Parliament on the 2010-11 NSW Total State Sector Accounts. The audited budget surplus was $1,340 million. The Auditor-General issued a qualified independent auditor’s opinion as the State could not identify the full extent and value of its land and infrastructure holdings for the eighth year in a row. The government needs to address its processes for identifying, valuing and recording land and related assets it controls as a matter of priority so it can effectively manage the full extent of its land and infrastructure holdings.

There have been tangible improvements in the time it takes NSW Government agencies to engage consultants through the Government’s Prequalification Scheme. The Scheme was introduced in February 2008 to improve agencies’ procurement of consultants. More than 300 service providers have been prequalified and over $300 million worth of consultancy services have been provided. Ideally agencies should know what assignments each consultant has won, for what services, what their rates are and how well they have performed. Agencies should then be free to contact other agencies before engaging a consultant.

Parliamentary reference - Report number #216 - released 28 September 2011

To date the Two Ways Together Plan (the Plan) has not delivered the improvement in overall outcomes for Aboriginal people that was intended. Stronger partnerships between the government and Aboriginal people are only beginning to emerge. The disadvantage still experienced by some of the estimated 160,000 Aboriginal people in NSW is substantial. For example, the unemployment rate for Aboriginal people is at least three times higher than the rate for all NSW residents and hospital admissions for diabetes are also around three times higher.

Parliamentary reference - Report number #213 - released 18 May 2011

Decisions to relocate government agencies to non-metropolitan areas are not made purely for cost reasons. They can also serve government policy objectives, such as promoting regional economic development.

Regardless of the policy objectives that may exist, I would expect that decisions on individual agency relocations would be based on sound business cases. Those business cases would show how the relocation achieves any relevant government objectives, what costs (or savings) would be involved, logistical considerations such as obtaining appropriate accommodation and staff, and any impacts on levels service to the public.

In my view, the existence of government policy objectives does not remove the need for individual decisions to be made in a transparent, rational and accountable manner. Responsible public servants should provide the appropriate information to government to allow it to judge how best to implement its policies.

Parliamentary reference - Report number #147 - released 14 December 2005

The annual Budget is one of the most important and visible statements about a government’s financial intentions.

Once a Budget is released, it is important to monitor variations from the projections it contains. This is done for two reasons -

• first, to ensure that individual agencies are properly managing their budget allocations and that any genuine emerging need for additional funding is met.
• second, to ensure that any changes to the State’s overall financial position are understood and corrective action is undertaken.

This audit dealt primarily with the second of these objectives.

Budget monitoring involves both agencies and Treasury working together to quickly identify factors that might impact the budget, to clearly understand the implications for their budget position and to take any remedial action needed.

Poor monitoring may reduce the confidence that stakeholders have in the government’s financial management. It may mean that government decisions made in- year or for the following budget (for example on tax measures or spending increases/savings) are based on an incorrect understanding of the State’s true financial position.

I hope that this Report provides some useful insights that will assist in better monitoring.

Parliamentary reference - Report number #141 - released 28 July 2005

Periodically we review the extent to which agencies have implemented the recommendations they accept from our earlier audits. This gives Parliament
and the public an update on the extent of progress made.

Intellectual property (IP) can have value to the agency concerned and may have the potential for wider commercial use. Poor management of IP can impose risks, including the risk of lost opportunities. Because it is not ‘tangible’ like a building or plant and equipment, the need for properly managing IP may be overlooked.

In this follow-up audit, we examine changes following our October 2001 report on how well public sector agencies were managing intellectual property.

Parliamentary reference - Report number #133 - released 30 March 2005

Periodically we review the extent to which agencies have implemented the recommendations they accept from our earlier audits. This gives Parliament and the public an update on the extent of progress made.

Given the size of the NSW public sector, the potential for fraud could run into billions of dollars if not properly managed. It is an area of risk that warrants close and ongoing attention. Over the last decade, we have responded by issuing three performance audits and a comprehensive guide to better practice on this topic.

In conducting my financial audits, there is now an Auditing Standard that requires me to seek annual assurances from every agency concerning the adequacy of their arrangements for fraud control. This latest performance audit provides a further report card on the extent to which the NSW public sector is managing its fraud risks.

This Report also provides updated guidance on improving arrangements for fraud control both at a whole-of-government level and at the agency level.

I commend the Report for close and careful attention by every agency.

Parliamentary reference - Report number #130 - released 9 February 2005

The Audit Office has recently completed a performance audit of the information published in the annual reports of eight public sector agencies. Although there is much guidance material on preparing annual reports, the performance audit found that the quality of published performance information in annual reports often falls short of what is considered best practice.

The aim of this Guide is to assist agencies to prepare annual reports that provide performance information that demonstrates accountability for the expenditure of public monies.

Parliamentary reference - Report number #77 - released 29 November 2000

Agencies have made some notable attempts to nominate objectives and define measures of performance and report against them each year. However, the quality of the performance information varies and in most cases falls short of what is accepted as best practice. The result is diminished accountability, transparency and openness.

Agencies still have problems reporting outcomes and results and frequently regress to reporting activities and plans. Few annual reports discussed setbacks and failures (particularly in the same detail as successes) or compared performance to goals or targets. And none of the agencies benchmarked their achievements against the results of operators in other jurisdictions or the private sector.

Parliamentary reference - Report number #76 - released 29 November 2000