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

Fraud control in the NSW public sector needs to be better. Some agencies have approached the issue with vigour and initiative, and improvement since 1993 is evident in the major audit clients of The Audit Office. However, the overall achievement of NSW agencies in implementing fraud control strategies leaves much room for improvement.

There is a need for stricter requirements, better monitoring and improved central support to ensure that fraud control is properly addressed. This Report makes some suggestions in this regard, and highlights some issues for further research and guidance. There is a need to change management perceptions on the issue of fraud control. To this end, The Audit Office fully supports recent initiatives by the Chief Executives Committee (in constituting an Ethics Working Party) and NSW Treasury (in seeking to introduce a risk management approach to the public sector). These initiatives place fraud control into a broader context of effective ethical management, which is where it belongs.

Parliamentary reference - Report number #48 - released 25 March 1998