Full details of our financial performance are presented in the financial statements section of this report. The following summarises financial performance actual versus target for 2017-18.
The variation in total income other than income from state government and additional FTE was due to audit work undertaken in local government and associated resourcing that was not in the target. A reduction in expenditure on capital projects resulted in an increase in cash balances and the level of cash holdings increasing compared to the target.
Further explanations are contained in Note 9.8 Explanatory statement to the financial statements.
Key effectiveness performance
Our effectiveness indicator shows the extent to which we have informed Parliament about public sector accountability and performance, against 4 specified categories. Full details of the categories and our performance are available in our Certification of KPIs.
While we were 1 report short to meet our target for this year, we delivered well over our 3-year target. As explained in greater detail on page 117, we set 3-year targets for each report type. This year was the final year in our 3-year target range, which encompassed 2015-16 to 2017-18.
During 2017-18, we reported on a number of opinions on ministerial notifications that resulted in an increase in the number of governance reports tabled. The reallocation of audit resources to these reports resulted in a lower number of economic development and social and environment reports tabled.
Key efficiency performance
Our efficiency indicators measure the cost of our audits relative to government expenditure. Full details of our key efficiency indicators including 5-year trend data are available here.
The increase in attest (financial) audit cost per million dollars of gross government expenditure was due to the additional local government financial audits performed that were not included in the original target.
The performance audit cost per million dollars of gross government expenditure was 11.4% below the target. Our desired strategy was not achieved largely because funding for performance audits has not matched our target to direct 30% of overall audit effort towards performance audits. The actual result was 26%.
The favourable variance between actual and target for the average number of days to issue financial opinions is due to agencies preparing financial statements and key performance indicators in a timelier manner and efficiency improvements in the audit process.
Additional indicator of our performance
Although not audited, we include this indicator because it is important in understanding our operational performance.
While we aim to meet our report targets, we are also at times required to reallocate resources to other audits. During 2017-18, the reallocation of audit resources resulted in a lower number of broad and narrow scope performance audit reports tabled.
Our strategic direction
We are now 2 years in to our Strategic Plan 2016-2020, which was endorsed by Executive in February 2016. Importantly, this plan is dynamic and where necessary – in response to our changing environment, emerging concerns or opportunities – we review the actions, measures and targets
to ensure they remain relevant and current so we can be confident that the areas of focus will deliver the required outcomes.
Our strategic plan rotates around 4 key areas of the business that we have identified as important to achieve our vision and mission.
Our People working with Our Tools with the right Approach will deliver Our Products which will fulfil our Outcome:
Work that makes a difference and helps to improve the public sector.
- We have identified that we need our people to be motivated, innovative, collaborative, accountable, valued, skilled and knowledgeable.
- Our tools are vital in supporting our people achieve our goals. We believe our tools need to be robust, efficient, user-friendly, flexible, agile, reliable and compliant.
- Our approach needs to be consistent, fair and balanced, independent, transparent, pragmatic, professional and contemporary.
Together these 3 areas working at an optimum will ensure our products are recognised as value for money, timely, relevant, accurate, quality and innovative.
We have 3 key internal plans which are integrated with our strategic plan to ensure that all areas of the business are working in the same direction to deliver common goals. These are the Workforce Development Plan, Information Technology Plan and Communications Plan.
The new Auditor General and our Executive team are working towards a full review of our existing Strategic Plan to take into account evolving priorities for the OAG. This includes the 2018-19 activities highlighted throughout this report as well as the key priority areas of:
- local government audit reform
- monitoring the risks to accountability and transparency and service delivery in a period of significant state sector reform
- increased efficiency-focused performance audits to identify potential savings
- securing the impact of the work of the OAG through better practice guidance to assist the broader public sector and improve the work of state and local government audit committees.
In order to provide our key client, the Parliament of Western Australia, with work that is current, relevant and of value, it is important that we consider and where required, adapt to meet the changing public sector environment. The nature of service delivery and expectations on state and local government is changing and we want to be sure our strategic planning process takes into account factors such as:
- significant changes across the sector such as the state government’s Machinery of Government reforms and the health and education sector reforms
- key reviews, such as the Service Priority Review and Inquiry into Government Programs and Projects
- the current fiscal environment.
We are aiming to have completed the review of our strategic plan by the end of 2018.