Report 7: 2017

Audit Results Report – Annual 2016 Financial Audits

Audit opinions for universities, TAFEs and others

  • We issued clear audit opinions on the financial statements, controls and KPIs of the 4 public universities and the 5 TAFEs and on the financial statements of the 9 university subsidiaries and request audits for the period ended 31 December 2016.
  • We reported Matters of Significance in the KPI opinions of the 5 TAFEs.
  • In addition, we also issued 13 audit opinions to a range of other agencies and for 24 certifications.

Management of the universities and TAFEs are responsible for keeping proper accounts and records to enable the timely and accurate preparation of financial reports. An effective internal control system should operate to alert management to irregularities in procedures and assist them to prevent, detect and investigate errors and fraud.

The Auditor General is required to issue an audit opinion to the responsible Minister for each university and TAFE. The opinion relates to:

  • financial statements – assurance that the financial statements and supporting notes are materially complete, accurate, reliable and comply with relevant legislation and applicable accounting standards
  • controls – assurance that the internal control systems and procedures in manual and electronic environments are adequate and ensure that financial transactions comply with legislative requirements
  • key performance indicators – assurance that the KPIs are relevant, appropriate, based on reliable data and fairly present the performance of the agency in achieving its desired outcomes.

Clear opinions issued for universities and TAFEs

For the year ended 31 December 2016, we issued clear audit opinions on the financial statements, controls and KPIs of all universities and university subsidiaries. We also issued clear audit opinions for the 5 new TAFEs for their first reporting period from 11 April to 31 December 2016.

Some universities use subsidiary companies to conduct activities on their behalf. The audit opinions we issued for these subsidiaries relate to financial statements only as they are not required to submit KPIs. The financial results of the subsidiaries are included in the consolidated financial statements of their controlling/parent university. Annual reports of subsidiaries are not required to be tabled in Parliament.

Table 1 - Audit opinions issued for universities, TAFEs

 

Matters of Significance reported in TAFE opinions

Where we consider a matter relating to the financial statements or KPIs is significant but not warranting a qualified audit opinion, we may include a Matter of Significance (MoS) paragraph with the audit opinion. This is usually to highlight a significant matter that is undisclosed or may not be apparent in the financial statements or KPIs.

Our opinions for the 5 TAFEs, for their first reporting period from 11 April to 31 December 2016, included two MoS in relation to their KPIs:

  1. The Under Treasurer exempted the TAFEs from the requirements of Treasurer’s Instruction 904 Key Performance Indicators to disclose budget targets for their KPIs and from reporting their key efficiency indicator – ‘overall cost per student curriculum hour’. The exemption was approved because of the partial year reporting period and the unavailability of campus level data.
  2. The second MoS drew attention to the key effectiveness indicator ‘Achievement of Profile Delivery’, highlighting that the indicator was calculated using actual and planned Student Curriculum Hours (SCH) for the full year. We agreed with TAFE management’s assessment that using full year data to calculate this indicator for the reporting period 11 April to 31 December 2016 did not materially affect the accuracy of the indicator.

We did not report any MoS for the universities.

Thirteen other audit opinions were issued

In addition to the tertiary education sector audits reported above, we issued a further 13 opinions for statutory authorities, cemetery boards and final audits since 1 November 2016. One agency, the Anzac Day Trust, had a Matter of Significance paragraph included in its opinion to highlight the delay in appointing trustees following expiration of the previous trustees’ term. Refer to Appendix 1 on page 32.

This report concludes our reporting on agencies’ audits for the 2016 year.

Twenty-four audit certifications were issued

Throughout the year, we conduct audit work to certify financial and statistical information produced by agencies. The audit opinion enables agencies to meet conditions of State or Commonwealth funding or specific grant requirements or legislation. The opinion also enables agencies to receive ongoing funding under existing agreements or to apply for new funding.

Our November 2016 Audit Results Report detailed 238 certifications issued by 1 November 2016, including 219 under the Royalties for Regions program – predominantly for the 30 June 2016 period. Since then we have issued a further 24 certifications including 14 under the Royalties for Regions program – refer Appendix 2 on page 33.

 

 

 

 

 

 

 

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