Report highlights: Customer Service 2021
What the report is about
The results of Customer Service cluster agencies' financial statement audits for the year ended 30 June 2021.
What we found
Unmodified audit opinions were issued for all Customer Service cluster agencies. The number of monetary misstatements decreased from 48 in 2019–20 to 46 in 2020–21. Seven out of eight agencies did not complete all mandatory early close procedures.
What the key issues were
Upon the implementation of AASB 1059 'Service Concession Arrangements: Grantors', the Department of Customer Service (the Department) recognised a service concession asset, the land titling database, totalling $845 million for the first time at 1 July 2019.
The Department reported several retrospective corrections of prior period errors. The 2020–21 audits identified three high-risk and 59 moderate risk issues across the cluster. The high risk issues were related to:
- the Department of Customer Service – internal control qualifications and control deviations in GovConnect service providers
- the Department of Customer Service – significant control deficiencies in information technology change management controls
- Rental Bond Board – uncertainties in the accounting treatment of rental bonds.
The percentage of repeat issues we report to management and those charged with governance in management letters increased from 29 per cent in prior year to 42 per cent in 2020–21 while the number of items decreased from 94 to 93.
The magnitude and number of internal control exceptions in GovConnect service providers increased resulting in additional audit procedures to address the risks of fraud and errors in the financial statements.
What we recommended
The Department should improve the validation process of key valuation assumptions and inputs provided by the private operator NSW Land Registry Services. It should revisit its accounting treatment of new land titling records.
The Department should ensure GovConnect service providers prioritise the remediation of control deficiencies in information technology services.
The Department should continue to improve controls in cyber security management.
Cyber Security NSW and NSW Government agencies need to prioritise improvements to their cyber security resilience as a matter of urgency.
The New South Wales Government Telecommunications Authority should improve its fixed assets management and financial reporting process to accommodate its growing fixed assets profile.
The Customer Service cluster aims to plan, prioritise, fund and drive digital transformation and customer service across every cluster in the NSW Government.
Please contact Ian Goodwin, Deputy Auditor-General on 9275 7347 or by email.