This report summarises the results of the annual audits of the 4 public universities and their subsidiaries for the 31 December 2016 reporting year, and the 5 TAFEs from their commencement on 11 April 2016 to 31 December 2016. The report also contains the results of a small number of other annual audits.

We issued clear audit opinions for all universities and TAFEs on their financial statements, controls and key performance indicators (KPIs).

Expenditure, payroll and human resources, IT operations and security of information systems continued to be the main areas of control weaknesses we identified at the universities and TAFEs in 2016. Over a third of the control weaknesses were issues unresolved from the prior year, and an increased proportion were of sufficient concern to require action as soon as practicable.

We have included in this report a brief summary of the restructure of the TAFE sector and details of the main reporting challenges faced by the new TAFEs in their first reporting period.

The report also presents information on universities’ overseas ventures, online courses, non‑metropolitan campuses and local subsidiaries. Our audits did not identify any particular concerns regarding these operations, but I trust that including this information in a single report will provide Parliament with information that is useful for assessing the overall performance of the tertiary education sector. For similar reasons, we have also included selected financial indicators and key performance information for the TAFEs and universities.

Also worth noting is that all 4 universities achieved our best practice status for good financial controls and reporting practices.

The ongoing efforts by universities and TAFEs to ensure the integrity of their financial controls and external reporting is vital for them to successfully manage the financial aspects of proposed and other higher education reforms.

This report completes the 2016 annual audit cycle. I wish to thank my staff and the staff in the audited agencies who contributed to the audit process.