Refine search Expand filter

Report snapshot

Report snapshot

Report snapshot: Universities 2023

About this report

Financial audit results of the NSW public universities’ financial statements for the year ended 31 December 2023.

Audit findings

Unmodified audit opinions were issued for all ten universities.

Eight universities reported net deficits. Three of these improved on their 2022 results.

Total fees and charges returned to pre-pandemic levels, with 40.5% earned from overseas students from three countries.

Employee related expenses increased 10.2% in 2023 mainly due to an additional 2,830 full time equivalent staff, in response to increased teaching and research activities.

Key issues

The number of findings reported to management has increased to 111 matters in 2023 up from 88 in 2022.

These included one high risk finding and 62 moderate risk findings, a 72% increase from last year.

Gaps identified in universities governance processes included delays in responding to findings and recommendations; staff not attesting compliance with codes of conduct annually; and not capturing and recording staff conflicts of interests within central registers.

Seven of the ten universities have cyber security risks above what they determine as an acceptable risk. Four universities did not have a cyber security uplift program.

Recommendations

Universities should address all recommendations made in the report (see Appendix one for a summary of these).

In particular, there should be a focus on prioritising remediation of wage underpayments to affected employees; ensuring a centralised conflict of interest register is maintained for all staff; considering emerging risks in university risk registers; ensuring controlled entities are considered when determining internal audit plans; and focusing efforts to improve cyber security risk management and cyber resilience capability.

Fast facts

There are ten public universities in NSW, with 53 controlled entities in Australia and 25 overseas controlled entities.

  • $12.5b total revenue in 2023, an increase of $1.5 billion (13.4%) from 2022
  • 88,592 overseas students enrolments (EFTSL) in 2023, an increase of 9,469 EFTSL (12%) from 2022
  • 1 high risk finding identified (six in 2022)
  • $12.6b total expenses in 2023, an increase of $1.4 billion (11.3%) from 2022
  • 194,932 domestic students enrolments (EFTSL) in 2023, a decrease of 5,141 EFTSL (2.6%) from 2022
  • 32 reported issues were repeat issues

Further information

Please contact Claudia Migotto, Acting Deputy Auditor-General on 9275 7347 or by email.

Report snapshot

Report snapshot: Oversight of the child protection system

About this report 

This audit assessed the effectiveness of the Department of Communities and Justice (DCJ) in planning, designing, and overseeing the NSW child protection system. 

The audit used 'follow the dollar' powers to assess the performance of five non-government organisations (NGOs), that were contracted to provide child protection services. More information about how we did this is included in the full report.

Findings

The NSW child protection system is inefficient, ineffective, and unsustainable.

Despite recommendations from numerous reviews, DCJ has not redirected its resources from a ‘crisis 
driven’ model, to an early intervention model that supports families at the earliest point in the child protection process.

DCJ's organisational structure and governance  arrangements do not enable system reform. 

DCJ has over 30 child protection governance committees with no clarity over how decisions are made or communicated, and no clarity about which part of DCJ is responsible for leading system improvement. 

DCJ's assessments of child protection reports are labour intensive and repetitive, reducing the time that caseworkers have to support families with services.

DCJ has limited evidence to inform investments in family support services due to a lack of data about the 
therapeutic service needs of children and families. This means that DCJ is not able to provide relevant services 
for families engaged in the child protection system. DCJ is not meeting its legislated responsibility to ensure that families have access to services, and to prevent children from being removed to out of homecare. 

DCJ does not monitor the wellbeing of children in out of home care. This means that DCJ does not have the information needed to meet its legislative responsibility to ensure that children 'receive such care and protection as is necessary for their safety, welfare and well-being’. 

In August 2023, there were 471 children living in costly and inappropriate environments, such as hotels, motels, and serviced apartments. The cost of thisemergency accommodation in 2022–2023 was $300million. DCJ has failed to establish ‘safe, nurturing, stable and secure’ accommodation for children in these environments. 

Since 2018–19, the number of children being returned to their parents from out of home care has declined. During the five years to 2022–23, families have had limited access to restoration services to support this process. 

Recommendations

The audit made 11 recommendations to DCJ. They require the agency toidentify accountability for system reform, and to take steps to ensure that children and families have access to necessary services and support.

Fast facts

  • 404,611 child protection reports to the NSW Helpline 2022–2023 
  • 112,592 children suspected as being at risk of significant harm 2022–2023 
  • 14,473 children in out of home care as at 30 June 2023 
  • $3.1b spent across all child protection services in 2022–2023 
  • $1.9b spent on out of home care services in 2022–2023 
  • $0.4b spent on family support services in 2022–2023 

Further information

Please contact Ian Goodwin, Deputy Auditor-General on 9275 7347 or by email.

Report snapshot

Report snapshot: Safeguarding the rights of Aboriginal children in the child protection system

About this report

The Department of Communities and Justice (DCJ) is responsible for safeguarding the rights of Aboriginal children, families, and communities when they encounter the child protection system. These rights are known as the Aboriginal and Torres Strait Islander Principles (the Principles), which are set out in legislation.

DCJ provides early intervention, prevention and out of home care services and also subcontracts non-government organisations to provide these services.

This audit assessed whether DCJ, and five funded non-government organisations that provide out of home care services, are effectively safeguarding the rights of Aboriginal children in the child protection system.

Findings

DCJ cannot demonstrate its compliance with the Principles. DCJ has not embedded the Principles in its governance,
accountability arrangements, policy and day-to-day casework practice.

Insufficient governance and accountability arrangements have contributed to DCJ's failure to deliver on Aboriginal strategies and reforms in the last five years.

DCJ has not developed holistic family preservation models based on Aboriginal ways of healing.

DCJ is aware that its structured decision-making tools, used to make significant casework decisions, adversely affect Aboriginal children and their families. However, DCJ continues to use the tools.

DCJ has no quality assurance mechanisms over its child protection system and casework practice. 

As system steward, DCJ has not provided non-government organisations with means to satisfy the Principles.

Recommendations

The audit recommends that DCJ:

  • establish governance and accountability arrangements that provide oversight of the safeguards and outcomes for Aboriginal children and families
  • develop and implement a quality assurance framework to ensure compliance with safeguards for Aboriginal children at all points in the child protection system
  • fulfil its commitment to develop and implement a healing framework for child protection services
  • commission family preservation services consistent with the principles of self-determination and participation set out in 
    the Principles

Fast facts

  • 7% of children in New South Wales are Aboriginal
  • 45% of children in out of home care were Aboriginal as at June 2023
  • 1 in 8 Aboriginal children seen by caseworkers enter out of home care
  • 6,500 Aboriginal children were in out of home care as at June 2023
  • 65% average per cent of Aboriginal children who entered out of home care via emergency removal powers over the last five years
  • 57 years estimated time it will take DCJ to transfer case management of Aboriginal children in out of home care to Aboriginal Community Controlled Organisations.

Further information

Please contact Claudia Migotto, Acting Deputy Auditor-General on 9275 7347 or by email.

Report snapshot

Report highlights: Workers compensation claims management

What this report is about

Workers compensation schemes in NSW provide compulsory workplace injury insurance. The effective management of workers compensation is important to ensure injured workers are provided with prompt support to ensure timely, safe and sustainable return to work.

Insurance and Care NSW (icare) manages workers compensation insurance. The State Insurance and Regulatory Authority (SIRA) regulates workers compensation schemes. NSW Treasury has a stewardship role but does not directly manage the schemes.

This audit assessed the effectiveness and economy of icare’s management of workers compensation claims, and the effectiveness of SIRA’s oversight of workers compensation claims. 

Findings

icare is implementing major reforms to its approach to workers compensation claims management - but it is yet to demonstrate if these changes are the most effective or economical way to improve outcomes.

icare’s planning and assurance processes for its reforms have not adequately assessed existing claims models or analysed other reform options.

icare's activities have not focused enough on its core responsibilities of improving return to work and maintaining financial sustainability.

SIRA has improved the effectiveness of its workers compensation regulatory activities in recent years. Prior to 2019, SIRA was mostly focused on developing regulatory frameworks and was less active in its supervision of workers compensation schemes.

NSW Treasury's role in relation to workers compensation has been unclear, which has limited its support for performance improvements.

Recommendations

icare should:

  • ensure that its annual Statement of Business Intent clearly sets out its approach to achieving its legislative objectives
  • monitor and evaluate its workers compensation scheme reforms
  • develop a quality assurance program to ensure insurance claim payments are accurate.

NSW Treasury should:

  • work with relevant agencies to improve public sector workers compensation scheme outcomes
  • engage with the icare Board to ensure icare's management is in line with relevant NSW Treasury policies.

SIRA should:

  • address identified gaps in its fraud investigation
  • develop a coordinated research strategy.

Fast facts

  • 4.7m approximate number of workers in NSW covered by compulsory workers compensation schemes
  • 48% increase in total workers compensation payments to injured private sector workers from 2018–19 to 2022–23
  • 8% annual premium increases planned for private sector employers over the next three years
  • 110,000 approximate number of workers compensation claims in 2022–23
  • 64% increase in total workers compensation payments to injured public sector workers from 2018–19 to 2022–23
  • 40% public sector workers with psychological injury claims returning to work by 13 weeks versus 54% in 2018–19

Further information

Please contact Ian Goodwin, Deputy Auditor-General on 9275 7347 or by email.

Report snapshot

Report highlights: Local Government 2023

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.

Fast facts 

  • 70% Unqualified audit opinions issued for 30 June 2023 financial statements
  • 33% missed the statutory deadline to lodge financial statements
  • 91 high-risk management letter findings identified

Further information

Please contact Aaron Green, Assistant Auditor-General on 9275 7347 or by email.

Report snapshot

Report highlights: Cyber security in local government

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.  

Fast facts 

  • 2 of 3 councils do not have a formal plan to improve their cyber security
  • 3 of 3 councils do not have up to date plans and processes to support detection, response to and recovery from cyber incidents
  • 3 of 3 councils are not effectively managing cyber security risks in relation to third parties

Further information

Please contact Claudia Migotto, Assistant Auditor-General on 9275 7347 or by email.

Report snapshot

Report highlights: Regulation insights

What this report is about

In this report, we present findings and recommendations relevant to regulation from selected reports between 2018 and 2024.

This analysis includes performance audits, compliance audits and the outcomes of financial audits.

Effective regulation is necessary to ensure compliance with the law as well as to promote positive social and economic outcomes and minimise risks with certain activities.

The report is a resource for public sector leaders. It provides insights into the challenges and opportunities for more effective regulation.

Audit findings

The analysis of findings and recommendations is structured around four key themes related to effective regulation:

  • governance and accountability
  • processes and procedures
  • data and information management
  • support and guidance.

The report draws from this analysis to present insights for agencies to promote effective regulation. It also includes relevant examples from recent audit reports.

In this report, we also draw out insights for agencies that provide a public sector stewardship role.

The report highlights the need for agencies to communicate a clear regulatory approach. It also emphasises the need to have a consistent regulatory approach, supported by robust information about risks and accompanied with timely and proportionate responses.

The report highlights the need to provide relevant support to regulated parties to facilitate compliance and the importance of transparency through reporting of meaningful regulatory information.

Fast facts 

  • 19 audits included in the regulation insights analysis
  • 6 years of audits tabled by the Auditor-General for New South Wales
  • 4 key themes for regulation insights

Further information

Please contact Claudia Migotto, Assistant Auditor-General on 9275 7347 or by email.

Report snapshot

Report highlights: Design and administration of the WestInvest program

What this report is about

WestInvest is a $5 billion funding program announced in September 2021 to provide ‘local infrastructure to help communities hit hard by COVID-19’ in 15 local government areas (LGAs) selected by the government. It was divided into three parts: $3 billion for NSW government agency projects; $1.6 billion for competitive grants to councils and community groups; and $400 million for non-competitive grants to councils.

Following the change of government at the 2023 election, the program was renamed the Western Sydney Infrastructure Grants Program. Funding decisions made for the community and local government grants were retained, but multiple funding decisions for the NSW government projects were changed.

The audit objective was to assess the integrity of the design and implementation of the program and the award of program funding.

Findings

The design of the program lacked integrity because it was not informed by robust research or analysis to justify the commitment of public money to a program of this scale.

The then government did not have sufficient regard to the implications for the state's credit rating. A risk to the credit rating arose because the government may have been perceived to be using proceeds from major asset sales to fund new expenditure, rather than pay down its debt.

Decisions about program design were made by the then Treasurer's office without consultation with affected communities. The rationale for these decisions was not documented or made public.

For the NSW government projects, funding allocations did not follow advice from departments. Many funded projects did not meet the objectives of the program.

The two other rounds of the program were administered effectively, except for some gaps in documentation and quality assurance. The program guidelines did not require an equitable or needs-based distribution of funding across LGAs and there was a significant imbalance in funding between the 15 LGAs. 

Recommendations

Our recommendations for the administration of future funding programs included:

  • considering whether competitive grants are the best way to achieve the program's purpose
  • completing program design and guidelines before announcements
  • ensuring adequate quality assurance.

We also recommended that when providing advice for submissions by Ministers to Cabinet, agencies should ensure that departmental advice is clearly identified and is distinct from other advice or political considerations.

Fast facts

  • $1.1b funding was allocated to NSW government projects that were rated as moderate or low merit
  • 118 projects were funded through competitive grants
  • 79% of funding available through community project grants was given to projects submitted by local councils

Further information

Please contact Ian Goodwin, Deputy Auditor-General on 9275 7347 or by email.

Report snapshot

Report highlights: Effectiveness of SafeWork NSW in exercising its compliance functions

What this report is about

This report assesses how effectively SafeWork NSW, a part of the Department of Customer Service (DCS), has performed its regulatory compliance functions for work health and safety in New South Wales.

The report includes a case study examining SafeWork NSW's management of a project to develop a real-time monitoring device for airborne silica in workplaces.

Findings

There is limited transparency about SafeWork NSW's effectiveness as a regulator. The limited performance information that is available is either subsumed within DCS reporting (or other sources) and is focused on activity, not outcomes.

As a work health and safety (WHS) regulator, SafeWork NSW lacks an effective strategic and data-driven approach to respond to emerging WHS risks.

It was slow to respond to the risk of respirable crystalline silica in manufactured stone.

SafeWork NSW is constrained by an information management system that is over 20 years old and has passed its effective useful life.

While it has invested effort into ensuring consistent regulatory decisions, SafeWork NSW needs to maintain a focus on this objective, including by ensuring that there is a comprehensive approach to quality assurance.

SafeWork NSW's engagement of a commercial partner to develop a real-time silica monitoring device did not comply with key procurement obligations.

There was ineffective governance and process to address important concerns about the accuracy of the real-time silica monitoring device.

As such, SafeWork NSW did not adequately manage potential WHS risks.

Recommendations

The report recommended that DCS should:

  • ensure there is an independent investigation into the procurement of the research partner for the real‑time silica detector
  • embed a formal process to review and set its annual regulatory priorities
  • publish a consolidated performance report
  • set long-term priorities, including for workforce planning and technology uplift
  • improve its use of data, and start work to replace its existing complaints handling system
  • review its risk culture and its risk management framework
  • review the quality assurance measures that support consistent regulatory decisions.

Fast facts

  • 60: average number of compliance notices issued by inspectors with fewer than two years' experience
  • 50: average number of compliance notices issued by inspectors with more than five years' experience
  • 352: number of inspector roles in August 2023 versus 370 funded positions
  • 8%: average proportion of administrative responses to complaints that are followed up against an informal target of 20%
  • 38%: proportion of complaints about falls from heights triaged as 'serious' in 2023 versus 70% in 2013

Further information

Please contact Ian Goodwin, Deputy Auditor-General on 9275 7347 or by email.

Report snapshot

Report highlights: Flood housing response

What this report is about

Extreme rainfall across eastern Australia in 2021 and 2022 led to a series of major flood events in New South Wales.

This audit assessed how effectively the NSW Government provided emergency accommodation and temporary housing in response to the early 2022 Northern Rivers and late 2022 Central West flood events.

Responsible agencies included in this audit were the Department of Communities and Justice, NSW Reconstruction Authority, the former Department of Planning and Environment, the Department of Regional NSW and the Premier’s Department.

Audit findings

The Department of Communities and Justice rapidly provided emergency accommodation to displaced persons immediately following these flood events.

There was no plan in place to guide a temporary housing response and agencies did not have agency-level plans for implementing their responsibilities.

The NSW Government rapidly procured and constructed temporary housing villages. However, the amount of temporary housing provided did not meet the demand.

There is an extensive waitlist for temporary housing and the remaining demand in the Northern Rivers is unlikely to be met. The NSW Reconstruction Authority has not reviewed this list to confirm its accuracy.

Demobilisation plans for the temporary housing villages have been developed, but there are no long-term plans in place for the transition of tenants out of the temporary housing.

Agencies are in the process of evaluating the provision of emergency accommodation and temporary housing.
 
The findings from the 2022 statewide lessons process largely relate to response activities.

Audit recommendations

The NSW Reconstruction Authority should:

  • develop a plan for the provision of temporary housing
  • review the temporary housing waitlist
  • determine a timeline for demobilising the temporary housing villages
  • develop a strategy to manage the transition of people into long-term accommodation
  • develop a process for statewide recovery lessons learned.

All audited agencies should:

  • finalise evaluations of their role in the provision of emergency accommodation and temporary housing
  • develop internal plans for implementing their roles under statewide plans.

Fast facts

  • 1,440 people housed in emergency accommodation in the Northern Rivers at its peak in April 2022
  • 11 temporary housing sites constructed
  • 546 temporary dwellings placed on villages in the Northern Rivers
  • 93 people housed in emergency accommodation in the three weeks following the Central West flood event
  • 59 pods installed on private property in the Central West by May 2023
  • 124 caravans placed on private property in the Central West by May 2023

Further information

Please contact Ian Goodwin, Deputy Auditor-General on 9275 7347 or by email.