Strive for efficiencies while delivering audit mandate

The Office’s legislative obligation to undertake audits of the public sector will challenge its capacity to stay within our approved salaries budget over the forward estimates. However, the Office is cognisant of the
state’s overall economic environment and associated fiscal challenges. Accordingly, we are making serious and concerted efforts to achieve the target, in addition to identifying opportunities to reduce other costs.

Number of ministerial notifications

There is a significant number of ministerial notifications referred to our Office. Under legislation, the Auditor General is required to express an opinion as to whether it is reasonable and appropriate for a
Minister not to provide information to Parliament. While we do manage our resources to accommodate this work, it is difficult to anticipate when and how many of these notifications will come to us and the scale of the work involved. This can affect our resourcing and delivery of other audit work.

Accounting and auditing standards

Changes to accounting and auditing standards continue to affect the Office’s business environment. These changes add to the complexity of audit tasks across the Office and directly affect the level of work
conducted by audit staff.

Expansion of mandate – local government

The government has approved the drafting of amendments to the Local Government Act 1995 to make the Auditor General responsible for financial and performance audits of the state’s 139 local governments.
In the coming months we expect to work closely with the Department of Local Government and Communities as well as local governments to ensure we are ready for the new role – if it goes ahead.

Access to Cabinet documents and legal professional privilege

The Auditor General Act 2006 is still relatively contemporary audit legislation but it does have some deficiencies that are impacting the efficiency and effectiveness of our audits. In particular, access
constraints to documents protected by Cabinet-in-confidence or legal professional privilege. The ability to gather sufficient and appropriate evidence is a fundamental audit requirement and in worst case scenarios
can prevent the issuing of an audit opinion.

Restructure of the Health sector

With the restructure of the Health sector from 1 July 2016 six statutory authorities will be established, which will have a significant impact on audit activities. Although most of these authorities have previously
operated under different organisational structures, substantial effort is required to evaluate the controls and data of the new agencies, and to audit the additional financial statements, controls and key performance indicators.