Report snapshot

About this report

This audit assessed the effectiveness of the regulation of gaming machines in clubs and hotels, with a focus on harm minimisation requirements.

In NSW, the Independent Liquor and Gaming Authority (ILGA) and the Department of Creative Industries, Tourism, Hospitality and Sport (the Department) share responsibility for regulating gaming machines in clubs and hotels.

Findings 

More than half of all gaming machines in Australia are located in NSW.

The Department and ILGA regulate gaming machines in a structured and consistent manner but are not supporting harm minimisation outcomes effectively.

The Department has a regulatory strategy that sets out its priorities clearly. It has communicated this to stakeholders. However, the strategy does not have a sufficient focus on the areas that are considered high-risk for gambling harm and does not set targets for reducing harm associated with gaming machines. Gaming machine losses and the social costs of gambling harm continue to be disproportionately concentrated in socio-economically disadvantaged communities.

ILGA and the Department have clear processes for assessing applications to operate gaming machines. However, ILGA does not proactively review licence conditions after they are granted.

Most venues that have the largest number of gaming machines have not had their licence conditions reviewed in recent years and are operating gaming machines with licence conditions that may not be consistent with contemporary approaches to harm minimisation.

A legislated forfeiture scheme that aims to reduce the number of gaming machines in NSW has existed since 2001. The number of gaming machines operating in NSW has decreased gradually, noting there has been an increase in the number of gaming machines in NSW since 2021–22.

Recommendations 

The report made recommendations including:

• the Department should increase the focus of its regulatory strategy on improving harm minimisation outcomes and ensure the gaming machine forfeiture scheme is achieving its legislative objectives
• ILGA should commence periodic reviews of licence conditions for venues operating gaming machines and increase clarity to industry and other stakeholders about the reasons for its decisions.

Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.

About this report

This report examined whether the NSW Police Force has been efficient and effective in managing and supporting the psychological wellbeing of the police workforce.

Findings 

In 2023, the NSW Police Force funded a range of additional wellbeing initiatives to support police. In 2024, a standalone command was established to deliver these initiatives and manage the health and wellbeing of the workforce.

Over the five years from July 2019 to June 2024, the NSW Police Force had increasing numbers of psychological injury claims, escalating compensation costs, and increasing psychological injury medical exits. Since October 2024, there has been a reduction in the number of psychological injury notifications.

The NSW Police Force monitors and reports on psychological injuries to the workforce, but does not monitor, analyse or report on the root causes of these injuries. As a result, the NSW Police Force is not efficiently or effectively preventing future psychological injuries to the police workforce. Work is currently in progress to improve psychological risk reporting.

NSW Police Force wellbeing initiatives provide counselling and support for police after traumatic incidents. The initiatives do not address other psychological risk factors such as fatigue, role overload, or burnout. 

Some police commands have higher workload volumes than others, and the NSW Police Force does not have a staffing allocation model to distribute police to locations under the greatest workload pressure.

In the five years from 2020 to 2025, the NSW Police Force invested $34 million on proactive wellbeing services for police, and an additional $60 million on the administrative costs of running the Health Safety and Wellbeing Command. 

The cost of compensation for police psychological injuries amounted to approximately $1.75 billion from July 2019 to June 2024.

Recommendations 

The NSW Police Force should, by July 2026:

1. develop and implement a workforce allocation model that matches police numbers to command-level workload demands and changing workload levels
2. fully implement the health and safety incident notification system and regularly report on the causal factors that lead to psychological incidents and injury claims
3. investigate and report on the factors that contribute to police role overload and burnout, and adjust policy settings, practices and controls accordingly
4. implement a strategy, process, and evaluation framework, that links police wellbeing initiatives and resources to evidence-based psychological risk factors.

 Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.

About this report

Financial audit results of the NSW public universities’ financial statements for the year ended 31 December 2024.

Findings

Unmodified audit opinions were issued for all ten universities.

Six universities reported net deficits in 2024, compared to eight in 2023. Nine universities’ net results improved from 2023.

The main driver of revenue growth in 2024 was a 25.5% increase in fees and charges revenue from overseas students, due to increased enrolments of 18.9%. Revenue from domestic students increased by 12%, however, enrolment numbers remain below 2020 levels.

In 2024, revenue growth of 14.9% exceeded the 9.4% growth rate of expenses. However, universities are still recovering from the shortfalls experienced in 2022 and 2023 following financial disruptions caused by the COVID-19 pandemic.

Half of the universities show indicators of financial risk in the form of liquidity ratios of less than one and having less than three months of cash reserves to fund operating and financing activities.

The number of reported audit findings has decreased from 111 in 2023 to 98 this year. Most control deficiencies related to information technology / cyber security, governance, and payroll.

Universities are not consistently following their own procedures for recording cyber incidents, data breaches and privacy breaches.

Data breaches that required mandatory notification resulted in unauthorised access and disclosure of personal information, and mainly caused by phishing attacks and human error.

Recommendations

Universities should:

• finalise mitigating actions to address the risk of future wage underpayments and prioritise repayments to affected staff
• adequately prepare themselves to comply with the climate disclosure requirements under NSW Treasury’s reporting framework
• clearly document the requirements for business cases and post-completion reviews for capital projects
• comply with established processes when recording cyber security incidents and data breaches
• require staff to complete cyber security training regularly, include simulated phishing attacks and provide students with basic cyber security training
• create a central artificial intelligence (AI) inventory, establish and implement an AI policy and consider the benefits of establishing an AI strategy.

Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.

About this report 

This audit assessed the effectiveness of the governance arrangements for the implementation of the 2020 National Agreement on Closing the Gap (the National Agreement) in NSW.

The stated objective of the National Agreement is to overcome entrenched inequality faced by Aboriginal and Torres Strait Islander people. It is an agreement between all Australian governments.

The implementation of the National Agreement in NSW is led by the Premier’s Department and the NSW Coalition of Aboriginal Peaks (NSW CAPO). NSW CAPO is a group of Aboriginal Community-Controlled Organisations that advocate for the rights and wellbeing of Aboriginal people in NSW.

Findings

The governance arrangements are not operating effectively.

Formal shared governance bodies have been established, but the governance structure does not provide clear accountability for the delivery of National Agreement initiatives or drive the behaviours needed to achieve the National Agreement’s stated outcomes.  

The Premier’s Department and NSW CAPO agreed to work together to implement the National Agreement, but they have not formed a genuine partnership.

Recommendations 

The report made four recommendations that aim to:

1. increase the accountability of NSW Government agencies for implementing the Priority Reforms of the National Agreement
2. ensure the Premier’s Department and NSW CAPO are working in genuine partnership
3. improve the planning and oversight of the implementation of the National Agreement in NSW
4. improve the transparency of NSW CAPO’s work conducted under the National Agreement.

Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.

About this report 

This audit examined whether activities relating to Cancer Institute NSW’s (the Cancer Institute) 2023–24 anti-tobacco and vaping control campaigns were carried out effectively, economically and efficiently, and in compliance with the Government Advertising Act 2011 (the Act), the Government Advertising Regulation 2018 (the Regulation), other laws, and the NSW Government Advertising Guidelines.

Findings

The Cancer Institute’s anti-tobacco and vaping control campaigns complied with the requirements of the Act, the Regulation and largely complied with the Advertising Guidelines.

The vaping control campaign’s evaluation indicates that the campaign was effective in reducing the uptake of vaping among young people in NSW. 

The anti-tobacco campaign achieved positive results but did not meet two of its key outcome targets. However, these were set prior to a reduction in the campaign’s budget and so it is not clear whether the campaign was undertaken effectively.

The Cancer Institute ensured that the audiences for both campaigns were targeted through appropriate media channels and with inclusive messaging. 

The Cancer Institute conducted a cost-benefit analysis for each campaign and demonstrated that the campaigns likely represented value for money.

Both campaigns were undertaken economically. The Cancer Institute directly negotiated with a provider to develop the creative materials for its vaping control campaign, but took steps to ensure that value for money was still achieved.

Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.

About this report

The NSW and Commonwealth governments announced the Special Disaster Assistance (SDA) grant program to support primary production businesses affected by significant flood events in areas of NSW in August and September 2022.

This audit assessed whether the NSW Rural Assistance Authority (RAA) and the NSW Reconstruction Authority (Reconstruction Authority) implemented the SDA - storms and floods AGRN 1030 and AGRN 1034 program in line with the principles and mandatory requirements outlined in the Grants Administration Guide, and in line with the program guidelines.

This audit was conducted following a request from the Special Minister of State that the Auditor-General conduct a recurring performance audit of emergency relief grants under section 27B(3)(c) of the Government Sector Audit Act 1983.

Findings

The RAA and the Reconstruction Authority followed the program guidelines and met most of the requirements of the Grants Administration Guide in administering the program.

However, the RAA did not implement appropriate controls to mitigate the risk of fraud for applicants who received only the upfront payment of $25,000. It did not require evidence of how these funds would be spent, or validate claims of estimated damage, before distributing the payments. The total value of these payments was approximately $40 million.

The RAA conducted an effective process to determine each applicant’s eligibility for the program and implemented appropriate fraud controls for higher-value grants.

The Memorandum of Understanding between the RAA and the Reconstruction Authority has not been updated since 2015. Neither agency conducted a cost-benefit analysis to assess value for money or planned an evaluation of the program. There were also gaps in the way that the RAA managed program risks.

Recommendations

Both audited agencies should:

• update the Memorandum of Understanding to better define responsibilities for grants administration.

The NSW Rural Assistance Authority should:

• improve its risk management of grant programs by:
  • defining its risk tolerance
  • ensuring appropriate controls to reduce fraud risks are in place
• ensure that conflict of interest declarations are collected from all assessment and claims staff
• update its cost estimate model
• develop additional performance measures for future grant programs.

The NSW Reconstruction Authority should:

• complete the cost-benefit analysis and outcome evaluation for the program.

Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.

About this report

The Northern Beaches Hospital is a private hospital that also provides public hospital services. The hospital was built in 2018 and is operated by a private operator, Healthscope, in a public-private partnership with the NSW Government.

Healthscope is contracted to operate the public portion of the hospital until 2038.

This audit assessed how effectively and efficiently the Northern Beaches Hospital public-private partnership delivers public hospital services.

Conclusion

The Northern Beaches Hospital public-private partnership is not effectively delivering the best quality integrated health services and clinical outcomes to the Northern Beaches community and the State – the standard required under the arrangement and the key objective of the project deed.

The partnership is at risk of failure, with Healthscope requesting in November 2023, and again in December 2023, that the return of the public portion of the Northern Beaches Hospital be brought forward by 14 years. In its requests, Healthscope noted the risk to the viability of the Northern Beaches Hospital, citing insufficient funding, a lack of integration into the wider health network, and strained stakeholder relationships.

NSW Health effectively manages the contract with Healthscope day-to-day on behalf of the State, ensuring that public hospital activity at the Northern Beaches Hospital is provided at a lower cost than if the State operated the hospital. However, the public-private partnership structure creates tension between commercial imperatives and clinical outcomes.

The Northern Beaches Hospital has recorded concerning results for some hospital-acquired complications and has not taken sufficient actions to address some identified clinical safety risks.

The project deed, which governs the partnership, does not support the hospital’s integration into the local health district and broader health network. This has an impact on patient journeys and access to services for patients in the Northern Beaches. Additionally, Healthscope has no obligation or commitment to implement NSW Health initiatives – such as the Safe Staffing Levels initiative.

The Northern Beaches Hospital has achieved accreditation to ensure it meets national quality standards for hospital care but some quality and safety concerns remain.

Recommendations

The report made three recommendations:

1. The NSW Government and NSW Health note the findings of the report and consider whether the Northern Beaches Hospital public-private partnership is the appropriate model to deliver the best quality integrated health care in the Northern Beaches region
2. Healthscope should resolve:
   a) safety and quality issues
   b) system issues
   c) reporting issues
3. NSW Health should consider issues raised for this public-private partnership for any future arrangement.

Further information

Please contact Akriti Mehra, Acting Chief of Staff, on 9275 7347 or by email.

About this report 

The report presents the results of the local government sector financial audits for the year ended 30 June 2024.

Audit results

Unqualified audit opinions were issued for 124 (of 128) councils, 8 (of 9) county councils and 11 (of 13) joint organisations. 

Disclaimers of opinion were issued for Glen Innes Severn Council and the New England Weeds Authority.  

Qualified audit opinions were issued for Snowy Valleys Council and Moree Plains Shire Council. 

Timeliness improved as 88% of councils lodged their audited financial statements by the statutory deadline of 31 October (67% in the previous year).

Findings

Financial sustainability is a concern for some councils

There were 35 councils that met none or just one of the three key financial sustainability benchmarks. Sixteen councils have insufficient cash and investments, not subject to external restrictions, to meet three months of their expenses (excluding depreciation and interest). 

Revenue growth lags expenditure growth after adjusting for inflation, resulting in negative growth in real terms. 

About 40% of councils did not break even in 2023–24. 

Cyber security remains a risk 

Cyber security controls have improved, especially regarding cyber governance. However, control gaps were identified in cyber security training and risk management of third-party systems.  

Recommendations 

• The Department of Planning, Housing and Infrastructure should reduce councils’ financial reporting burden, and remove non-value-adding disclosures from financial statements.
• Councils should perform more robust month-end processes, quality reviews of financial statements and supporting working papers before they are submitted for audit.

Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.

About this report 

The land titles registry is a collection of registers established under the Real Property Act 1900 and related legislation. It is the source of truth for land and property ownership in NSW and underpins significant economic activity. 

The registry is owned by the NSW government. From 1 July 2017, a private operator has operated and maintained the registry under a 35-year concession granted by the NSW government. 

The Office of the Registrar General is the regulator of the private operator’s activity under the concession. It is a business unit in the Department of Customer Service. 

This audit examined the effectiveness of the regulator in overseeing and monitoring the operation and maintenance of the registry to ensure its integrity and security. 

Conclusion 

The Office of the Registrar General has implemented an effective system and supporting processes to oversee and monitor the integrity and security of the land titles registry. 

However, the audit found opportunities for the Office of the Registrar General to improve how it conducts its regulatory functions. 

Recommendations 

The audit recommended that the Office of the Registrar General should: 

1. develop and publish its approach to exercising its regulatory functions and powers 
2. publish a regulatory charter to ensure greater regulatory transparency 
3. review the skills and capabilities required to regulate the land titles registry 
4. ensure greater clarity on the rights to use data, and the application of privacy legislation 
5. ensure compliance with the NSW Cyber Security Policy, including the requirements relating to third parties 
6. perform an audit of the subscriber compliance process.

Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.

About this report

Bus services in metropolitan Sydney are provided by private operators under contract to the NSW government. Transport for NSW (TfNSW) determines bus timetables, routes, stops, and frequency, while the operators deliver the specified bus services.

This audit assessed the effectiveness of TfNSW’s design and management of metropolitan Sydney bus service contracts. The audit focused on the nine regions where services are provided under the Greater Sydney Bus Contract (GSBC).

Conclusion

TfNSW is not effectively managing bus contracts to ensure that operators are meeting contracted obligations and customer needs. It has not responded strategically to major changes in commuter, work and travel patterns on metropolitan bus services.

TfNSW identified significant gaps in its strategic contract management capacity since 2022 but has not sufficiently addressed these. As a result, it has not undertaken essential medium to long-term strategic activities required to effectively manage the GSBCs. It has not conducted a holistic, systematic review of service levels across all regions to fully address the impacts of the post-COVID-19 period, and other changes such as new infrastructure and travel options like the Sydney Metro M1 line.

First stop on time running has stabilised since January 2023. However, operators are not consistently meeting their performance obligations for on time running, cancelled trips and customer complaints.

There are gaps in TfNSW’s contract management specific procedures and delegations. These gaps mean that the risks of inappropriate exercise of delegations, non-compliance with contractual requirements and/or inappropriate use of public funds are not fully addressed.

Recommendations

The audit recommends that TfNSW improve the capacity of its bus contracts management team. It should also close the gaps in its contract management specific procedures and delegations, and start regularly auditing operator responses to customer complaints.

TfNSW should implement strategic planning, including enhanced data analytics, aimed at improving bus operator performance.

Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.