This report summarises the results of the annual audits of agencies, for the year ending 30 June 2016.

Seven agencies received qualified audit opinions on their financial statements, controls or key performance indicators (KPIs), a similar number to the previous year.

This year there was a slight decrease in the number of financial control weaknesses, including significant issues, identified by our audits and reported to management for corrective action.

Several agencies continue to struggle to keep their KPIs relevant to their current mandate and operations, and the evolving information needs of users. Some also experienced difficulty obtaining a representative response to stakeholder surveys used for their KPIs.

In this report we have included brief details on selected significant agency transactions that we noted during our audits as well as selected key financial ratios and information commonly used for assessing financial performance or analysing the financial health of agencies. I have also supplemented the information contained within the Annual Report on State Finances with other high level information that some readers might find useful.

The report also provides details of recent changes to auditing and accounting standards. One of these requires agencies to disclose material transactions with related parties in the notes to their audited financial statements, beginning with the 2016-17 reporting year. Related parties in a public sector context include key management personnel of the agency, Ministers, and their close family members. The Departments of Treasury and Premier and Cabinet are developing procedures to help agencies identify relevant transactions between agencies and related parties.

In several previous reports to Parliament, I have given the view that the requirement for small agencies to prepare financial reports complying with International Financial Reporting Standards (IFRS) including all disclosure requirements, is unnecessary. With some 60 agencies accounting for only 1% of total government operating expenditure, we support reducing costs associated with preparing and auditing the annual financial statements of these small agencies.