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Published

Actions for Local Government 2023

Local Government 2023

Local Government
Asset valuation
Cyber security
Financial reporting
Fraud
Information technology
Internal controls and governance

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.

 

Pursuant to the Local Government Act 1993 I am pleased to present my Auditor-General’s report on Local Government 2023. My report provides the results of the 2022–23 financial audits of 121 councils, eight county councils and 12 joint organisations. It also includes the results of the 2021–22 audits for two councils and two joint organisations which were completed after tabling of the Auditor-General’s report on Local Government 2022. The 2022–23 audits for eight councils, one county council and one joint organisation remain in progress due to significant accounting issues.

This will be my last consolidated report on local councils in NSW as my term as Auditor-General ends in April. Without a doubt, the change in mandate to make me the auditor of the local government sector has been the biggest challenge in my term. Challenging for councils as they adjust to consistent audit arrangements and for the staff of the Audit Office of NSW as they learn about the issues facing NSW councils.

The change in mandate aimed to improve the quality of financial management and reporting across the sector. This will take time. But this report does show some ‘green shoots’ with more councils submitting financial reports to the Office of Local Government by 31 October and more councils having Audit, Risk and Improvement Committees. 

I also want to acknowledge that councils face significant challenges responding to and recovering from emergency events whilst cost and resourcing pressures have been persistent.

The findings from our audits identify opportunities to further improve timeliness and quality of financial reporting and integrity of systems and processes. The recommendations in this report are also intended to improve financial management and reporting capability, encourage sound governance, and boost cyber resilience.

 

Margaret Crawford PSM
Auditor-General for New South Wales

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

This chapter outlines audit observations related to the financial reporting audit results of councils, county councils and joint organisations.

A strong system of internal controls enables councils to operate effectively and efficiently, produce reliable financial reports, comply with laws and regulations, and support ethical government.

This chapter outlines the overall trends in governance and internal controls across councils, county councils and joint organisations in 2022–23.

Financial audits focus on key governance matters and internal controls supporting the preparation of councils’ financial statements. Breakdowns and weaknesses in internal controls increase the risk of fraud and error. Deficiencies in internal controls, matters of governance interest and unresolved issues are reported to management and those charged with governance through audit management letters. These letters include our observations with risk ratings, related implications, and recommendations.

Appendix one – Response from the Office of Local Government within the Department of Planning, Housing and Infrastructure

Appendix two – NSW Crown Solicitor’s advice

Appendix three – Status of previous recommendations

Appendix four – Status of audits

Appendix five – Councils received qualified audit opinions for non-recognition of rural firefighting equipment

 

© 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.

Published

Actions for Cyber security in local government

Cyber security in local government

Local Government
Cyber security
Information technology
Internal controls and governance
Management and administration
Risk

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.

Local councils in New South Wales (NSW) provide a wide range of essential services and infrastructure to their communities and are increasingly reliant on digital technologies for this.

Councils use various information systems and software to manage significant amounts of information and data relevant to their corporate functions, infrastructure and service delivery. This may include sensitive information about residents, customers and staff.

Audit Office of New South Wales reports to Parliament have highlighted gaps in councils' cyber security risk management approaches since 2020. The Local Government 2023 report, tabled in March 2024, found that 50 councils were yet to implement cyber security governance frameworks and related internal controls.

The threat from cyber security incidents continues to rise. Such incidents can harm local government service delivery and may include the theft of information, denial of access to critical technology, or even the hijacking of systems for profit or malicious intent.

It is important that councils are effectively identifying and managing cyber security risks to:

  • protect their information, data and systems
  • be prepared to detect, respond to and recover from cyber security incidents 
  • ensure confidence in the services they are providing for their communities.

This report outlines important findings and recommendations from a performance audit of three councils: City of Parramatta Council, Singleton Council and Warrumbungle Shire Council. This audit report has deidentified findings for each council, but the specific findings have been directly shared with each council to enable them to remediate and improve cyber safeguards. The findings and recommendations in this report are likely to be relevant to most local councils in NSW and councils are encouraged to ensure they have sufficient cyber safeguards.

This audit assessed how effectively the selected councils identified and managed cyber security risks. The audit considered whether the councils:

  • effectively identify and plan for cyber security risks
  • have controls in place to effectively manage identified cyber security risks
  • have processes in place to detect, respond to, and recover from cyber security incidents.

This audit also included the Department of Customer Service and the Office of Local Government (OLG) within the Department of Planning and Environment (DPE) due to their roles in providing guidance and support to local government.1

Cyber Security NSW, part of the Department of Customer Service, supports local councils to improve their cyber resilience through a range of services and guidance, including the Cyber Security Guidelines – Local Government issued in December 2022.

The OLG is responsible for strengthening the sustainability, performance, integrity, transparency and accountability of the local government sector.

Conclusion

The three councils are not effectively identifying and managing cyber security risks. As a result, councils' information and systems are exposed to significant risks, which could have consequences for their communities and infrastructure.

Ineffective cyber security risk management can result in unmitigated risks to the security of information and assets which, if compromised, could impact the councils' local communities, service delivery and public infrastructure.

Poor management of cyber security can lead to consequences including theft of information or money, service interruptions, costs of repairing affected systems, and reputational damage.

Each council undertook activities to improve their cyber security during the audit period, but there were significant gaps in the councils' risk management processes and controls meaning the councils are not effectively identifying and managing cyber security risks.

Key findings include:

  • None of the councils are effectively using risk management processes to identify and manage cyber security risks.
  • None of the councils have assessed the business value of their information and systems to inform cyber security risk identification and management, nor have they assigned cyber security responsibilities for all core systems.
  • Two of the three councils do not have a formal plan to improve their cyber security, resulting in an uncoordinated approach to cyber security activities and related expenditure. The council that does have a plan has not formally considered the resourcing required to fully implement the plan.
  • None of the councils have implemented effective governance arrangements to ensure accountability for managing cyber security risks, and their reporting to ARICs did not link activities to risk mitigation.
  • None of the councils have effective cyber security policies and procedures for managing cyber security risks and to support consistent cyber security practices.None of the councils have a clear and consistent approach to monitoring the effectiveness of controls to mitigate identified cyber security risks.
  • All three councils are not effectively identifying or managing third party cyber security risks.

None of the councils have up to date plans and processes to support effective detection, response and recovery from cyber security incidents.

Councils need to be prepared to identify when a cyber incident occurs, and be able to respond to cyber incidents to contain any compromises and minimise the impact. This is even more important for councils with low levels of maturity in their preventative cyber security controls.

Key findings include:

  • None of the councils have a cyber incident response plan to ensure an effective response to and prompt recovery from cyber incidents, and their business continuity and disaster recovery planning documentation is not up to date.
  • None of the councils have clearly defined roles and responsibilities for detecting, responding to (including through appropriate reporting) and recovering from cyber incidents.
  • None of the councils maintain a register of cyber incidents to record information about the sources and types of incidents experienced and relevant responses, to support post-incident evaluation.

Cyber Security NSW and the OLG recommend that councils adopt requirements set out 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.

Cyber Security NSW and the OLG recommend that local councils implement the Cyber Security Guidelines for Local Government. However, while the roles of both Cyber Security NSW and the OLG involve identifying and responding to specific sector risks, neither is monitoring the uptake of the Guidelines by local councils to identify whether they are enabling better cyber security risk management.

Cyber Security NSW and the OLG did not ensure that their roles, responsibilities and actions relevant to cyber security management were coordinated and complementary during the audit period. Cyber Security NSW's Local Government Engagement Plan was updated in November 2023 to include information about its approach to stakeholder collaboration to support a cyber secure NSW Government, including through engagement with the OLG.


1 The OLG was part of DPE up to 1 January 2024, when DPE was abolished and the OLG became part of the Department of Planning, Housing and Infrastructure (DPHI).

Local councils in New South Wales (NSW) provide a wide range of essential services and infrastructure to their communities. In doing so, councils use a range of information technology (IT) systems, assets, and digital services.

This audit follows several audit reports by the Audit Office of New South Wales that have considered how effectively NSW Government entities, including local councils have managed cyber security risks (see Appendix three).

The Audit Office of New South Wales has reported on how councils have managed cyber security risks since 2020. In the Local Government 2023 report, tabled in March 2024, gaps in cyber security frameworks and related internal controls were reported in 50 councils.

This chapter includes a summary of thematic key findings for the selected councils.

Cyber Security NSW is responsible for supporting local councils to improve their cyber resilience through a range of services and guidance and published its Local Government Engagement Plan in 2023 (discussed below).

The Office of Local Government (OLG) is responsible for strengthening the sustainability, performance, integrity, transparency and accountability of the local government sector. It does this through a range of activities including monitoring sector-wide and council-specific risks, issuing guidance, engaging with councils to build capacity and supporting the Minister for Local Government’s discretionary intervention powers.

Appendix one - Response from entities Cyber security in LG

Appendix two - Glossary-  Cyber security in local government

Appendix three – Overview of Audit Office of New South Wales reports that consider cyber security - Cyber security in local government

Appendix four – Cyber Security Guidelines – Local Government foundational requirements- Cyber security in local government

Appendix five – About the audit- Cyber security in local government

Appendix six – Performance auditing -Cyber security in local government

 

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 #392- released 26 March 2024

Published

Actions for Driver vehicle system

Driver vehicle system

Transport
Finance
Cyber security
Information technology
Internal controls and governance
Project management
Service delivery

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.

The DRIver VEhicle System1 (often known as DRIVES) is the Transport for NSW (TfNSW) system which is used to manage over 6.2 million driver licences and over seven million vehicle registrations in New South Wales.

DRIVES first went live in 1991 and has been significantly extended and enhanced over the past 33 years. DRIVES is a significant NSW Government information system — containing personal information such as home addresses for most of the NSW adult population, sensitive health information such as medical conditions, and biometric data in photographs.

Service NSW, part of the Department of Customer Service, is the NSW Government's 'one stop shop' for services to NSW citizens and businesses. It uses DRIVES when it delivers many transport-related services to NSW citizens such as licence renewals and checks the identity information stored in DRIVES as part of other services delivered to NSW citizens, such as a 'working with children check'.

DRIVES supports TfNSW's regulatory functions and the collection of more than $5 billion in revenue annually for the NSW Government. The system is also used by many organisations outside of the NSW Government including commercial insurers and national regulators, as well as individual citizens who access DRIVES for services such as 'Renew my registration' or 'Book a driver knowledge test'.

TfNSW owns and manages DRIVES. It intends to replace DRIVES with a modernised system to improve its cost, performance, and security.

The objective of this performance audit was to assess whether TfNSW is effectively:

  • managing the current system, and 
  • planning to transition DRIVES to a modernised system.

The auditee is TfNSW. We have consulted with the Department of Customer Service as a key stakeholder during the audit process.

This part of the report considers whether Transport for NSW (TfNSW) is effectively managing the current system. It considers DRIVES’:

  • role in NSW Government service delivery
  • ease of use and appropriateness for a modern system
  • mechanisms to ensure the service is available for users.

This part of the report considers whether Transport for NSW (TfNSW) is effectively planning to transition DRIVES to a modernised system. It makes findings on the:

  •  effort to develop a business case to fund the replacement of DRIVES
  • issues which have contributed to the slow progress of the replacement program.

Published

Actions for Internal controls and governance 2023

Internal controls and governance 2023

Whole of Government
Compliance
Cyber security
Information technology
Internal controls and governance
Management and administration
Regulation
Workforce and capability

What this report is about

This report analyses the internal controls and governance of the 25 largest agencies in the NSW public sector, excluding state owned corporations and public financial corporations, for the year ended 30 June 2023.

Findings

Internal control trends

The proportion of control deficiencies identified as high-risk this year decreased to 4.5% (8.2% in 2022).

Repeat findings of control deficiencies represent 38% of all findings (48% in 2022). 

Information technology

Over half of the agencies reviewed have deficiencies in managing user access to their information systems. Over a third of agencies had deficiencies in their controls over privileged user accounts within their information technology environments. 

Cyber security

Over 80% of assessments for maturity levels against the NSW Cyber Security Policy have reported one or more self-assessed Mandatory Requirements are not practiced on a consistent and regular basis.

Essential Eight cyber controls have not improved, and they need to. 

Governance framework

Deficiencies were noted in agencies' governance and risk management frameworks, namely: outdated risk management policies, lack of risk appetite statements, and internal audit functions not being externally evaluated.  

Payroll and work health and safety (WHS)

Overtime expenses increased by 40% between 2020 and 2023, compared to salaries and wages which increased by 16% over the same period.

Five agencies have WHS policies that do not reflect current WHS regulations.

Recommendations

Several important recommendations were made for agencies to prioritise efforts to improve cyber security controls and cyber resilience measures.

It was also recommended that agencies periodically review their risk management maturity and implement action plans, and ensure their WHS policies and procedures reflect current legislation requirements including the need to manage psychosocial risks.

 

Internal controls are processes, policies and procedures that help agencies to:

  • operate effectively and efficiently
  • produce reliable financial reports
  • comply with laws and regulations
  • support ethical government.

This chapter outlines the overall trends for agency controls and governance issues, including the number of audit findings, the degree of risk those deficiencies pose to the agency, and a summary of the most common deficiencies found across agencies.

For consistency and comparability, we have adjusted the 2022 results to incorporate additional audit findings that were reported after the date of the Internal controls and governance 2022 report. Therefore, the 2022 figures will not necessarily align with those reported in our 2022 report.

Section highlights

  • The Audit Office identified 12 high-risk findings, compared to 23 last year, with eight repeated from last year. Eleven of the high-risk findings related to financial controls while one related to other (governance) controls.
  • The proportion of repeat deficiencies has decreased from 48% in 2021–22 to 38% in 2022–23. 

 

This chapter outlines our audit observations, conclusions and recommendations arising from our review of agency controls to manage key financial systems.

Section highlights

  • Over half of the agencies reviewed have deficiencies in managing user access.
  • Thirty-six per cent of agencies had deficiencies in their controls over privileged accounts.
  • Weaknesses were identified in how agencies manage service providers or other organisations which have access to their systems and data.
  • Inadequate records were kept to demonstrate approvals for key system implementation milestones, including successful data migration testing and approval for go-live.
  • Thirty-two per cent of agencies had not implemented segregations of duties over key payroll functions. 

 

This chapter outlines our audit observations, conclusions and recommendations arising from our review of agencies' cyber security.

Section highlights

  • Eighty-three per cent of maturity assessments have reported one or more Mandatory Requirements below level three, which is the level at which the requirement is self-assessed and considered to be practiced on a consistent and regular basis.
  • Essential Eight maturity levels have remained unchanged or have declined, and may not be suitable for the level of risk agencies face.
  • All 25 agencies reviewed have a cyber incident response plan and all but two newly created agencies tested their plan.
  • Systems to detect cyber incidents across agencies could improve.
  • There is a risk of under reporting cyber incidents at six agencies that kept insufficient records to support their cyber incident classifications.
  • Overall, agencies need to increase their focus and prioritise efforts to ensure effective cyber security and resilience measures are in place. 

 

Governance in the context of the NSW public service refers to the structures, processes, and mechanisms by which government departments and agencies are held to account when they make decisions and implement policies and programs in the service of the public interest. It also includes the principles and practices that guide how these agencies work together.

This chapter outlines our audit observations, conclusions and recommendations from our review of agencies' governance frameworks and practices, with consideration of NSW Treasury issued policies and best practices. It focuses on two key areas: governance arrangements and risk management.

Section highlights

  • Whilst agencies have generally adopted governance and risk management frameworks that align with Treasury issued policies and best practices, we noted deficiencies, including:
    • 20% of governing boards operated without a board charter
    • 16% of agencies had risk management policies that were beyond their scheduled review date
    • 16% of agencies did not have a risk appetite statement
    • 28% of agency internal audit functions have not been externally evaluated in the last five years.
  • Agencies should perform periodic assessments/reviews of their risk maturity and implement action plans where required. 

 

This chapter outlines our audit observations, conclusions and recommendations arising from our review of agencies' payroll controls and management of work health and safety (WHS).

Section highlights

  • Agencies should improve their controls around payroll masterfile maintenance, such as enforcing segregation of duties in system access levels and ensuring changes to data are reviewed by an independent officer.
  • On average, overtime expenses represented three per cent of total salaries and wages in 2023 and have increased by 40.2% since 2020, compared to salaries and wages which increased by 16.3% over the same period.
  • Five agencies have outdated WHS policies, which do not reflect changes to WHS regulations. Sixteen per cent of agencies have not included psychosocial hazards in their WHS procedures or risk assessment process. 

 

Published

Actions for Treasury 2023

Treasury 2023

Treasury
Compliance
Cyber security
Financial reporting
Information technology
Internal controls and governance
Management and administration
Procurement
Regulation
Risk
Service delivery
Shared services and collaboration

What this report is about

Result of the Treasury portfolio of agencies’ financial statement audits for the year ended 30 June 2023.

The results of the audit of the NSW Government’s consolidated Total State Sector Accounts (TSSA), which are prepared by NSW Treasury, will be reported separately in our report on ‘State Finances 2023’.

The audit found

Unqualified audit opinions were issued on all general purpose financial statement audits.

Qualified audit opinions were issued on two of the 24 other engagements prepared by portfolio agencies. These related to payments made from Special Deposit Accounts that did not comply with the relevant legislation.

The number of monetary misstatements identified in our audits increased from 29 in 2021–22 to 39 in 2022–23.

The new parental leave policy impacted agencies across all portfolios. NSW Treasury should perform annual assessments to identify changes in legislation and regulation and provide timely guidance to the sector.

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 agencies’ financial statements is required.

The key audit issues were

Five high-risk issues were reported in 2022–23. Three were new findings on contract management, accounting treatments for workers compensation renewal premium adjustments and the management and oversight of a Special Deposit Account. Two repeat issues referred to the need to improve quality review processes over financial reporting and the timely approval of administration costs.

Portfolio agencies should prioritise and action recommendations to address internal control deficiencies.

 

This report provides Parliament and other users of the Treasury 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 Treasury portfolio of agencies (the portfolio) for 2023.

Section highlights

  • Unqualified audit opinions were issued on all Treasury portfolio agencies’ 2022–23 financial statements.
  • Two qualified audit opinions were issued on special purpose financial reports, relating to whether payments from the Electricity Retained Interest Corporation – Ausgrid (ERIC-A) Fund and the Electricity Retained Interest Corporation – Endeavour (ERIC-E) Fund, complied with the relevant legislation.
  • The total number of errors (both corrected and uncorrected) in the financial statements increased from 29 in 2021–22 to 39 in 2022–23.
    Reported corrected misstatements increased from 15 in 2021–22 to 25 with a gross value of $7.1 billion in 2022–23. Reported uncorrected misstatements increased from 13 in 2021–22 to 14 in 2022–23, with a gross value of $277.6 million in 2022–23.

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 Treasury portfolio.

Section highlights

  • Five high-risk issues were reported in 2022–23. Three were new findings on contract management, accounting treatments for workers compensation renewal premium adjustments and the management and oversight of a Special Deposit Account.
  • A further 35 moderate risk findings were reported in 2022–23, of which ten were repeat findings.
  • Some agencies have again spent monies without an authorised delegation.
  • The quality of information provided for audit purposes needs to improve.

 

Appendix one – Misstatements in financial statements submitted for audit

Appendix two – Early close procedures

Appendix three – Timeliness of financial reporting

Appendix four – Financial data

Appendix five – Acquittals and other opinions

 

© 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.

Published

Actions for Health 2023

Health 2023

Health
Whole of Government
Asset valuation
Compliance
Financial reporting
Information technology
Internal controls and governance
Project management
Regulation
Risk
Shared services and collaboration
Workforce and capability

What this report is about

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

The audit found

Unmodified audit opinions were issued for all Health portfolio agencies' financial statements. 

The number of monetary misstatements increased in 2022–23, driven by key accounting issues, including the first-time recognition of paid parental leave and plant and equipment fair value adjustments. 

The key audit issues were 

NSW Health identified errors regarding the recognition and calculation of long service leave entitlements for employees with ten or more years of service that had periods of part time service in the first ten years, resulting in prior period restatements. 

Comprehensive revaluation of buildings at the Graythwaite Charitable Trust found errors in the previous year's valuation, resulting in prior period restatements. 

New parental leave legislation increased employee liabilities for portfolio agencies. The Ministry of Health corrected the consolidated financial statements to record parental leave liabilities for all agencies within the Health portfolio.   

A repeat high-risk issue relates to processing time records by administrators that have not been reviewed prior to running the pay cycle.   

Thirty per cent of reported issues were repeat issues. 

The audit recommended 

Portfolio agencies should ensure any changes to employee entitlements are assessed for their potential financial statements impact under the relevant Australian Accounting Standards. 

Portfolio agencies should address deficiencies that resulted in qualified reports on:   

  • the design and operation of shared service controls
  • prudential non-compliance at residential aged care facilities.

 

This report provides Parliament and other users of the Health 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 Health portfolio of agencies (the portfolio) for 2023.

Section highlights

  • Unqualified audit opinions were issued for all portfolio agencies required to prepare general purpose financial statements.
  • The total number of errors (including corrected and uncorrected) in the financial statements increased compared to the prior year.
  • The Ministry of Health retrospectively corrected an $18.9 million adjustment in its financial statements relating to long service leave entitlements for certain employees.
  • Graythwaite Charitable Trust retrospectively corrected a $4.2 million adjustment in its financial statements related to prior period valuations. 

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 observations and insights from our financial statement audits of agencies in the Health portfolio.  

 Section highlights 

  • The 2022–23 audits identified one high-risk and 57 moderate risk issues across the portfolio.
  • The high-risk matter related to the forced-finalisation of time records.
  • The total number of findings increased from 67 to 111 in 2022–23.
  • Thirty per cent of the issues were repeat issues. Most repeat issues related to internal control deficiencies or non-compliance with key legislation and/or central agency policies.
  • Forced-finalisation of time records, accounting for the new paid parental leave provision and user access review deficiencies were the most commonly reported issues.
  • Qualified Assurance Practitioner's reports were issued on:
    • the design and operation of controls as documented by HealthShare NSW
    • the Ministry's Annual Prudential Compliance Statements in relation to residential aged care facilities.

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.

 

 

Published

Actions for Transport 2023

Transport 2023

Transport
Whole of Government
Asset valuation
Compliance
Financial reporting
Information technology
Infrastructure
Internal controls and governance
Management and administration
Procurement
Risk

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.

Published

Actions for Procurement of services for the Park'nPay app

Procurement of services for the Park'nPay app

Finance
Local Government
Information technology
Internal controls and governance
Procurement
Project management

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

  1. making and retaining complete and accurate records, particularly on decisions to commit or expend public money
  2. ensuring department staff understand how to exercise their financial delegations and procurement processes
  3. ensuring that only staff with appropriate delegations are committing or approving the spending of public money
  4. consistency with the contract extension provisions of the NSW Government Procurement Policy Framework, particularly regarding ensuring value for money
  5. protocols to guide the interactions between department staff and Minister and Minister's staff
  6. 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

 

Published

Actions for Planning and Environment 2023

Planning and Environment 2023

Planning
Environment
Industry
Asset valuation
Compliance
Financial reporting
Information technology
Infrastructure
Internal controls and governance
Management and administration
Risk
Shared services and collaboration

What this report is about

Results of the Planning and Environment portfolio financial statement audits for the year ended 30 June 2023.

The audit found

Unqualified audit opinions were issued for all completed Planning and Environment portfolio agencies. Seven audits are ongoing.

The Catholic Metropolitan Cemeteries Trust (CMCT) did not comply with its obligations under the Government Sector Finance Act 2018 (GSF Act) to prepare and submit financial statements for audit.

The Department of Planning and Environment (the department) has not yet provided their assessment of the financial reporting requirements for the 579 Category 2 Statutory Land Managers (SLMs) for 2022–23.

One-hundred-and-nineteen Commons Trusts are non-compliant with the GSF Act as they have not submitted their financial statements for audit.

We issued unqualified opinions on the Water Administration Ministerial Corporation's 2020–21, 2021–22 and 2022–23 financial statements.

The number of monetary misstatements identified in our audits decreased from 59 in 2021–22 to 51 in 2022–23, however the gross value of misstatements increased.

The key audit issues were

The former Resilience NSW and NSW Reconstruction Authority (the Authority) re-assessed the accounting implications arising from contractual agreements relating to temporary housing assets associated with the Northern Rivers Temporary Homes Program. This resulted in adjustments to recognise the associated assets and liabilities.

We continue to identify significant deficiencies in NSW Crown land information records.

The department has not been effective in addressing the differing practices for the financial reporting of rural firefighting equipment vested to councils under section 119 (2) of the Rural Fires Act 1997.

The number of findings across the portfolio reported to management increased from 132 in 2021–22 to 140 in 2022–23. Thirty per cent of issues were repeated from the prior year.

Seven high-risk issues were identified. These related to the findings outlined above, deficiencies in quality reviews of asset valuations, internal control processes and IT general controls.

The audit recommended

Recommendations were made to the department and portfolio agencies to address these deficiencies.

This report provides Parliament and other users of the Planning and Environment 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 Planning and Environment portfolio of agencies (the portfolio) for 2023.

Section highlights

  • Unqualified audit opinions were issued on all completed 30 June 2023 financial statements audits of portfolio agencies. Seven audits are ongoing.

  • We have been unable to commence audits of the Catholic Metropolitan Cemeteries Trust (CMCT). NSW Treasury's position remains that the Catholic CMCT is a controlled entity of the State for financial reporting purposes. This means CMCT is a Government Sector Finance (GSF) agency and is obliged under Section 7.6 of the Government Sector Finance Act 2018 (GSF Act) to prepare financial statements and submit them to the Auditor-General for audit. To date, CMCT has not met its statutory obligations under the GSF Act.

  • The Department of Planning and Environment has not yet provided their assessment against the reporting exemption requirements in the Government Sector Finance Regulation 2018 (GSF Regulation) for the estimated 579 Category 2 Statutory Land Managers (SLMs) or 119 Commons Trusts for 2022–23 and no Category 2 SLM or Commons Trust has submitted its 2022–23

    financial statements for audit. Consequently, the lack of compliance with reporting requirements by these 698 agencies presents a challenge to obtaining reliable financial data for these agencies for the purposes of consolidation to the Total State Sector Accounts.

  • The audits of the Water Administration Ministerial Corporation's (WAMC) financial statements for the years ended 30 June 2021 and 30 June 2022 were completed in June 2023 and unqualified audit opinions issued. The 30 June 2023 audit was completed and an unqualified audit opinion was issued on 12 October 2023.

  • The number of reported corrected misstatements decreased from 46 in 2021–22 to 36, however the gross value of misstatements increased from $73 million in 2021–22 to $491.8 million in 2022–23.

  • Portfolio agencies met the statutory deadline for submitting their 2022–23 early close financial statements and other mandatory procedures.

  • A change to the NSW paid parental leave scheme, effective October 2023, created a new legal obligation that needed to be recognised by impacted government agencies. Impact to the agencies' financial statements were not material.

 

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 portfolio.

Section highlights 

  • The number of findings across the portfolio reported to management increased from 132 in 2021–22 to 140 in 2022–23 and 30% were repeat issues (34% in 2021–22).

  • The 2022–23 audits identified seven high-risk and 76 moderate risk issues across the portfolio. Four of the high-risk issues were repeat issues, one was a repeat issue with the risk rating reassessed to high-risk in the current year and two were new findings in 2022–23.

  • The former Resilience NSW and NSW Reconstruction Authority had previously assessed that they did not control the temporary housing assets associated with the administration of the Northern Rivers Temporary Homes Program, under relevant accounting standards. A re-assessment of the agreements was made subsequent to the submission of the Authority’s 2022–23 financial statements for audit, which determined that the Authority was the appropriate NSW Government agency to recognise these assets and associated liabilities not previously recognised by the Authority or the former Resilience NSW.

  • There continues to be significant deficiencies in Crown land records. The department should continue to implement their data strategy and action plan to ensure the Crown land database is complete and accurate.

  • Since 2017, the Audit Office has recommended that the department, through OLG should address the differing practices for the financial reporting of rural firefighting equipment vested to councils under section 119 (2) of the Rural Fires Act 1997. The department has not been effective in resolving this issue. In 2023, twenty-six of 108 completed audits of councils received qualified audit opinions on their 2023 financial statements (43 of 146 completed audits in 2022). Six councils had their qualifications for not recognising vested rural firefighting equipment removed in 2022–23.

 

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.

Published

Actions for Enterprise, Investment and Trade 2023

Enterprise, Investment and Trade 2023

Finance
Asset valuation
Compliance
Cyber security
Financial reporting
Information technology
Infrastructure
Internal controls and governance
Management and administration
Procurement
Project management
Regulation
Risk

What this report is about

Results of the Enterprise, Investment and Trade portfolio of financial statement audits for the year ended 30 June 2023.

What we found

Unqualified audit opinions were issued for all completed Enterprise, Investment and Trade portfolio agencies.

An 'other matter' paragraph was included in the Jobs for NSW Fund's 30 June 2022 independent auditor's report to reflect the non-compliance with the Jobs for NSW Act 2015 (the Act). The Act requires the board to consist of seven members that include the Secretary of the Treasury, the Secretary of the Premier's Department, and five ministerial appointments. The board has consisted of two secretaries since 24 May 2019 when the independent members resigned. The remaining five members have not been appointed by the ministers as required by section 5(2) of the Act.

Financial statements were not prepared for the Responsible Gambling Fund, a special deposit account. Financial statements should be prepared unless NSW Treasury releases a Treasurer's Direction under section 7.8 of the GSF Act that will exempt the SDA from financial reporting requirements.

What the key issues were

The number of issues reported to management decreased from 65 in 2021–22 to 44 in 2022–23. Forty-six per cent of issues were repeated from the prior year.

Two high-risk issues were identified across the portfolio. One was a repeat issue where the Jobs for NSW Fund did not comply with legislation. The other high-risk issue was first identified in 2022–23 when the Department for Enterprise, Investment and Trade incorrectly recorded grants that did not meet the requirements of Australian Accounting Standards.

What we recommended

The Department should develop a robust model to ensure it only provides for grants that meet the eligibility criteria.

This report provides Parliament and other users of the Enterprise, Investment and Trade 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 Enterprise, Investment and Trade portfolio of agencies (the portfolio) for 2023.

Section highlights

  • Unqualified audit opinions were issued on all completed portfolio agencies’ 2022–23 financial statements.
  • An ‘other matter’ paragraph was included for the Jobs for NSW Fund’s 30 June 2022 financial report to reflect non-compliance with the Jobs for NSW Act 2015.
  • The Act requires the board to consist of seven members that include the Secretary of the Treasury, the Secretary of the Department of Premier and Cabinet (or their nominees) and five ministerial appointments, one of whom is to be appointed as Chair of the board. The board has consisted of the two secretaries since 24 May 2019 when the independent members resigned. The remaining five members have not been appointed by the ministers as required by section 5(2) of the Act.
  • An ‘emphasis of matter’ paragraph was included in the Jobs for NSW Fund’s 30 June 2022 financial report to draw attention to the financial report being prepared for the purpose of fulfilling the Jobs for NSW Fund’s financial reporting responsibilities as requested by the Treasurer’s delegate.
  • The total number of errors (including corrected and uncorrected) in the financial statements increased by 12% compared to the prior year.
  • The Responsible Gambling Fund (Special Deposit Account) did not prepare financial statements for the year ended 30 June 2023. Financial statements should be prepared unless NSW Treasury releases a Treasurer’s Direction under section 7.8 of the GSF Act that will exempt the Fund from financial reporting requirements. 

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 Enterprise, Investment and Trade portfolio.

Section highlights

  • The audits identified two high-risk and 20 moderate risk issues across the portfolio. Of these, one was a high-risk repeat issue and ten were moderate-risk repeat issues.
  • One of the high-risk matters related to the Jobs for NSW Fund audit for the year ended 30 June 2022.
  • The other high-risk matter related to overstating grants relating to the Jobs Plus Program as the criteria to pay the grant was not met at 30 June 2023.
  • The total number of findings decreased from 65 to 44 with 2022–23 findings mainly related to deficiencies in accounting for property, plant and equipment and agencies having outdated policies. 

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.