Financial auditing
This year we delivered 187 audit opinions.
We aim to deliver audit opinions under the Financial Management Act in time for annual reports to be tabled by an agency within 90 days of the end of the financial year as required by the Act. We consistently achieve between 99 and 100% for this measure (Table 17). This year we achieved 100%, it took an average of 65.5 days to issue our financial audit opinions and we delivered 58% of our audit opinions earlier than last year.
Our financial audit work includes the certification of financial and statistical information produced by departments and statutory authorities. This assists agencies to discharge conditions of Commonwealth funding, grants or legislation and to meet the requirements of funding agreements in a timely manner. In 2016-17, we issued 263 certifications, 235 relating to Royalties for Regions projects.
Our reports tabled in 2016-17
During 2016-17, we tabled 26 reports in Parliament across our 4 audit topic categories. We aim to deliver timely, relevant and quality reports on public sector performance and accountability. These reports assist in achieving our vision and outcome of an informed Parliament and work that makes a difference and helps to improve the public sector.
On the following pages is a brief summary of the reports tabled this year which are available on our website at www.audit.wa.gov.au/reports.
Website statistics provide an indication of the degree of interest in our reports, and we use these to inform our topic selection process. Of the top 10 accessed reports this financial year, 6 were from 2016-17 the other 4 from previous years (Table 19).
Across government benchmarking audit
KPI category – Governance
Tabled – 7 July 2016
This audit assessed whether 8 agencies had controls and procedures in place to ensure compliance with requirements at various stages of the grant process, including the awarding and approval of grants, monitoring of grant
milestones and acquittal of grants. Most agencies were generally administering grants satisfactorily. Three displayed good practice across all our lines of inquiry and 5 had some opportunities for improvement.
Financial and Performance Information in Annual Reports
Across government benchmarking audit
KPI category – Governance
Tabled – 21 July 2016
This audit assessed whether agency information relating to the financial statements, key performance indicators (KPIs) and, where applicable, section 40 financial estimates was reported accurately and consistently throughout the annual report. We looked at the 2014-15 annual reports of 50 agencies and found errors, omissions or non-compliance in 18. An agency is responsible for ensuring the financial statements and KPIs published in its annual report are the audited version and that the annual report clearly identifies what is audited information and what is not.
Opinion on Ministerial Notifications
Opinion on ministerial notifications
KPI category – Governance
Tabled – 11 August 2016
The Auditor General considered decisions by 3 Ministers to withhold information from Parliament due to Cabinet confidentiality were not reasonable and therefore not appropriate. Some of the information was publicly accessible and could have been provided to Parliament. We recommended the Department of Treasury and Department of the Premier and Cabinet provide guidance to assist agencies with future requests for such information.
Information and Communication Technology (ICT) in Education
Narrow scope performance audit
KPI category – Service delivery
Tabled – 17 August 2016
The audit looked at how the Department of Education plans, manages, advises and supports the use of ICT in public schools. The Department has a vision but no implementation plan leaving individual schools unsure about what ICT changes are coming. We also found that funding constraints and limited access to ICT expertise leaves some schools struggling. We recommended the Department rethink how it engages with schools and what it can do to help them.
Ord-East Kimberley Development
Broad scope performance audit
KPI category – Economic development
Tabled – 7 September 2016
The audit looked at how effectively the Department of Regional Development has implemented the Ord-East Kimberley Development Plan and whether the intended socio-economic benefits were achieved.
We found there has been mixed results with infrastructure built, irrigation in place, farming commenced and employment delivered during construction but sustained social and economic benefits are not yet evident. A lack of planning and scoping has resulted in cost increases and delays in timelines. Future development remains unclear and needs to be addressed by the government.
Opinion on Ministerial Notifications
Opinion on ministerial notifications
KPI category – Governance
Tabled – 6 October 2016
This inquiry dealt with the decision by the Minister for Corrective Services not to provide information to the Legislative Council Standing Committee on Public Administration about the Court Security and Custodial Services Contract. The Auditor General was unable to form an opinion as he could not obtain sufficient evidence.
Opinion on Ministerial Notifications
Opinion on ministerial notifications
KPI category – Governance
Tabled – 13 October 2016
The Auditor General found the decision by the Premier, in his role as Minister for Tourism, not to provide information to Parliament regarding 16 Western Australian Tourism Commission sponsorship agreements was reasonable and appropriate.
Western Australian Waste Strategy: Rethinking Waste
Narrow scope performance review
KPI category – Social and environment
Tabled – 19 October 2016
The audit assessed whether strategies to reduce the state’s reliance on landfill for dealing with household, construction, demolition, commercial and industrial waste had been successful. We found although there has been improvement in the management of waste since 2012, none of the 2015 WA Waste Strategy targets for waste diversion from landfill were met. The diversion of waste from landfill is a shared responsibility and requires action from state and local governments, industry and the wider community. Government needs to lead by example and provide good practice waste management planning and guidance.
Audit Results Report – Annual 2015-16 Financial Audits
Financial audit
KPI category – Governance
Tabled – 9 November 2016
This report is the summary of the results of the annual audits of 167 agencies and 238 certification opinions. We found many agencies are performing satisfactorily in relation to their financial reporting and controls but there is room for improvement. All agencies should take note and act on the recommendations in the report.
Opinion on Ministerial Notifications
Opinion on ministerial notifications
KPI category – n/a*
Tabled – 9 November 2016
This inquiry found the decision by the Minister for Regional Development not to provide Parliament with the Bunbury Waterfront Project business case was reasonable and appropriate.
* Does not count as a report for KPI requirements
Opinion on Ministerial Notifications
Opinion on ministerial notifications
KPI category – n/a*
Tabled – 23 November 2016
The Auditor General found the decision by the former Minister for Transport not to provide the Standing Committee on Estimates and Financial Operations with information was not reasonable, and therefore not appropriate, as it was already publicly available. The information requested was a written ministerial directive to engage Chronos Advisory and the associated procurement advice from the Department of Transport.
Opinions on Ministerial Notifications
Opinion on ministerial notifications
KPI category – Governance
Tabled – 7 December 2016
The Auditor General found the decisions by 14 Ministers not to provide the strategic asset plans of 41 agencies to Parliament due to Cabinet confidentiality were not reasonable, and therefore not appropriate. Strategic asset plans are not prepared solely for consideration by Cabinet and may contain both confidential and public information.
Malware in the WA State Government
Information systems
KPI category – Governance
Tabled – 7 December 2016
Cybersecurity attacks are becoming more frequent, sophisticated and dangerous and government agencies are not immune. We found the 6 agencies audited were under constant threat and there was a high volume of attacks that had breached at least the first security
layer. Weak or missing security controls, allows malware to enter the network and attempt to infect computers. Agencies can reduce the risk through basic and cost-effective solutions. Skilled professionals and executive and staff awareness of malware risks also play key roles.
Improving Immunisation Rates of Children in WA
Narrow scope performance audit
KPI category – Service delivery
Tabled – 21 December 2016
This audit assessed the effectiveness of the delivery by WA Health of immunisation services to children and adolescents. We found the approach is effective and WA is meeting the national immunisation target of 90% for children aged 0 to 5 years. Health needs to identify any groups at risk of preventable diseases and tailor programs for them.
Measuring Tax Collection Performance
Narrow scope performance audit
KPI category – Governance
Tabled – 22 December 2016
This audit assessed how well the Office of State Revenue (OSR) is collecting state taxes.
We found OSR generally performs well in its collections of state taxes and against the
government’s tax estimates but it could collect more tax from taxpayers who do not meet their obligations. The OSR can do more to measure the efficiency of its activities and in estimating the tax gap.
Assessment of Progress to Improve Payment Security for Government Construction Subcontractors
Narrow scope performance audit
KPI category – Governance
Tabled – 22 December 2016
This audit assessed progress to improve the security of subcontractor payments on state government construction projects and compliance with the Building and Construction Industry Training Fund and Levy Collection Act 1990. We found the key processes that help ensure security of payments have improved and a number of reforms are currently underway. We made a number of recommendations that will build on the reform.
Vocational Education and Training for Year 11 and 12 Students in Public Schools
Broad scope performance audit
KPI category – Service delivery
Tabled – 22 December 2016
The audit assessed the efficiency and effectiveness of the school education system in providing quality vocational education and training (VET) that meets the needs of senior
school students. We found that schools and the Department of Education had expanded the delivery of VET in schools and met the needs of students. We recommended that better support for schools would reduce risks to schools.
Opinion on Ministerial Notifications
Opinion on ministerial notifications KPI category – n/a*
Tabled – 30 March 2017
This inquiry found the decision by the former Police Minister not to provide information to Parliament about police visits to specified properties, was reasonable and appropriate.
Opinion on Ministerial Notification
Opinion on ministerial notifications
KPI category – Governance
Tabled – 6 April 2017
This inquiry found decisions by the former Minister for Commerce not to provide information to Parliament about changes to the Workers’ Compensation and Injury Management Act 1981 were reasonable and appropriate.
Tender Processes and Contract Extensions
Across government benchmarking audit
KPI category – Governance
Tabled – 11 April 2017
This audit assessed the policies and practices for tendering and extension of existing contracts at
8 agencies. We found that, in general, agencies were satisfactorily managing tender processes and conflicts of interest, but need to improve how they manage contract extensions.
Controls Over Purchasing Cards
Across government benchmarking audit
KPI category – Governance
Tabled – 11 April 2017
This audit assessed the policies and practices for managing purchasing cards at 9 agencies and found no instance of purchasing cards being used inappropriately. Although there are shortcomings that need to be addressed, there is general improvement since our last audit of this area in 2014. The potential for improper or unauthorised use of purchasing cards means agencies need to ensure appropriate controls are in place and that they are continually vigilant against misuse.
Accuracy of WA Health’s Activity Based Funding Data
Narrow scope performance audit
KPI category – Governance
Tabled – 11 April 2017
This audit assessed if WA Health has suitable processes and controls for recording, collating and submitting activity data and that this data was accurate. We found an error rate of 5.2%, which does not appear high given the complexity of activity coding and nature of the errors.
Opinions on Ministerial Notifications
Opinions on ministerial notifications
KPI category – Governance
Tabled – 13 April 2017
The Auditor General found decisions by the former Minister for Forestry and the former Attorney General not to provide information to Parliament were reasonable and appropriate. The information requested was about the potential shortfall in pine resources by volume and value, and the billable hours for the Bell Group litigation proceedings.
Audit Results Report – Annual 2016 Financial Audits
Financial audit
KPI category – Governance
Tabled – 11 May 2017
This report summarises the results of the annual audits of the 4 public universities and their subsidiaries, and the 5 TAFE colleges for 2016, as well as a small number of other audits. The report completes the 2016 annual audit cycle.
Management of Medical Equipment
Broad scope performance audit
KPI category – Service delivery
Tabled – 11 May 2017
This audit assessed whether the management of medical equipment at 8 public hospitals is efficient and effective. We found medical equipment failure rarely has a serious impact on patient care, but that efficiency gains are missed because asset management of the equipment is not effective.
Opinion on Ministerial Notification
Opinions on ministerial notifications
KPI category – n/a*
Tabled – 8 June 2017
The Auditor General found a decision by the former Minister for Health not to provide Parliament with the business case for the Quadriplegic Centre was reasonable and appropriate, as it was Cabinet-in-confidence. He found Health had appropriately advised the Minister it should remain confidential and noted that in responding to the request, the Minister said consideration would be given to providing the information at a later date.
* Does not count as a report for KPI requirements
Across government benchmarking audit
KPI category – Governance
Tabled – 21 June 2017
This audit assessed whether 8 agencies are paying suppliers on a timely basis in accordance with the requirements and principles of the Treasurer’s Instructions. We found that 8% of payments were more than 30 days after the invoice date, with no valid reason for the delay. While these delays are not acceptable, it was an improvement compared to our 2014 audit of timely payments, which found that 10% were late. However, in this audit late payments were later than those in our 2014 audit.
Opinion on Ministerial Notification
Opinions on ministerial notifications
KPI category – Governance
Tabled – 29 June 2017
The Auditor General found decisions by the former Minister for Water not to provide Water for Food business cases to Parliament were not reasonable and therefore not appropriate. This is because a significant amount of the information was already publicly available. However, the Minister followed an appropriate process in that her decisions were consistent with the advice she was provided and the advice was from a proper source and sufficiently convincing. The
Department of Water’s advice to the Minister was nevertheless incorrect in that it failed to advise the Minister that much of the business case was already publicly available and that these components could be released.
Information Systems Audit Report
Informations systems audit
KPI category – Governance (x2)
Tabled – 29 June 2017
The annual IS Audit Report looked at the controls around 5 key business applications as well as general computer controls across 46 government agencies. The 5 applications were all working effectively but each had weaknesses. More
than half of the 46 agencies are not meeting our controls benchmark in 3 or more of the control categories. Most of the issues raised are relatively simple and inexpensive to correct and there are lessons for all agencies in the management of IT systems.
Making a difference – report successes
Our outcome is work that makes a difference and helps to improve the public sector. Positive change to government activity and practice is a reflection of the impact our work is having and of our progress in meeting our desired outcome.
Some examples where our work has informed, influenced, or directly resulted in change includes:
- changes to State Supply Commission policies by the Department of Finance as a consequence of Health Department’s Procurement and Management of its Centralised Computing Services Contract (January 2016)
- improvements in the living conditions of Aboriginal people in Western Australia through Resilient Families, Strong Communities: A roadmap for regional and remote communities as recommended in Delivering Essential Services to Remote Aboriginal Communities (May 2015)
- the Light Industry Program to reduce groundwater and drainage contamination from light industrial and commercial activities into priority river catchments was introduced following our report, Health of the Swan Canning River System (August 2014)
- major education and public awareness campaign to target safe cycling and respect among road users, and better connections between suburbs and main cycle routes as outlined in Safe and Viable Cycling in the Perth Metropolitan Area (October 2015)
Theatre Efficiency Reform Program introduced by Health WA including new theatre schedules at Sir Charles Gairdner Hospital to improve the use of operating theatres in response to Operating Theatre Efficiency (November 2015).
Parliament follow up of our reports
We acknowledge and appreciate the important role PAC plays in its follow up of recommendations made in our tabled performance reports. PAC requires agencies to explain in writing what action they have taken to address our recommendations and can require senior management to appear at a hearing to provide further information. PAC may also choose to seek comment from the responsible minister.
PAC issued its latest Review of Auditor General Reports in November 2016. It also published Doing ICT Better (September 2016) with a view to determining how the public sector could obtain better outcomes from the planning and management of its ICT requirements. The PAC reports are available on the Parliament website www.parliament.wa.gov.au.