Audit Results Report – Annual 2017-18 Financial Audits of State Government Entities

Selected significant financial transactions and financial ratios


This section of the report provides information on selected significant financial transactions made in 2017-18 that we noted during our audits. It also includes selected key financial ratios and information commonly used for assessing financial performance or analysing the financial health of entities. We report this information to provide insight to important issues considered during the audits.

Some of the information below may also be reported in each entity’s tabled annual report but we have summarised it here for the convenience of Parliament. By including these items in this report, we are not implying that we have a residual audit-related concern with these transactions.

Selected significant financial transactions


  • In 2017-18 the Child and Adolescent Health Service took over operational responsibility for the new Perth Children’s Hospital and capitalised building, furniture, fittings and equipment, and intangibles, totalling $1.23 billion. Princess Margaret Hospital assets, valued at $59.5 million, were transferred back to the Department of Health.
  • Optus Stadium opened in January 2018 resulting in a $1.1 billion increase in property, plant and equipment for Western Australian Sport Centre Trust (VenuesWest). The stadium was funded under a public private partnership between the State Government and ProjectCo (the private provider). VenuesWest received an equity contribution of $656.8 million being the State’s contribution, with the remainder being received under a finance lease with ProjectCo.
  • Western Power’s information technology related assets were increased this year by $49 million when 3 IT management systems covering assets, customers and workflow became operational. The Department of Fire and Emergency Services also reported a $9.9 million (314%) increase in its intangible assets due to the continued development of the Computer Aided Despatch (CAD) incident management platform. This has since become operational, from August 2018.
  • Land and buildings at the Department of Education were revalued down by $390.4 million. Included in this was a $29.7 million write down in the valuation of school buildings under the public private partnership arrangement.
  • At 30 June 2018, the Department of Transport reported $8 million non-current assets classified as held for sale, being the Welshpool Vehicle Examination Centre property. This property became surplus during 2017-18.
  • Perth Theatre Trust added to its assets when it received land valued at $1.7 million from the City of Albany for the Albany Entertainment Centre and $21 million from the transfer of the Goldfields Arts Centre building and land from the Department of Training and Workforce Development.
  • South West Development Commission’s property, plant and equipment increased by 23.3%, $2.4 million, to $12.5 million, mainly attributed to undertaking the Transforming Bunbury’s Waterfront (Stage 1) Dolphin Discovery Centre capital works project.
  • The Western Australian Greyhound Racing Association transferred the Mandurah racetrack to Racing and Wagering Western Australia in July 2018. The racetrack was valued at $8.2 million.
  • WA Country Health Services assets under construction totalled $319 million, including $147 million for the Karratha Health Campus development and $105 million for major upgrades at 6 district hospitals under the Southern Inland Health Initiative programme.


  • Western Australian Treasury Corporation increased its borrowings by $3.4 billion (6.6%) to $54.7 billion.


  • The Public Transport Authority of Western Australia reported spending $222 million of Commonwealth government funding on the ongoing Forrestfield-Airport Link project from the Specific Purpose Account. A capital commitment for the main contract of $618 million was reported at 30 June 2018 in the Annual Report on State Finances.
  • The METRONET project also commenced during 2017-18, with $20.2 million of the initial $30.2 million contributed by State and Commonwealth governments, spent at 30 June 2018. Payments of $19.1 million were for infrastructure planning such as the Yanchep Rail Extension and Thornlie-Cockburn Link and $0.8 million for METRONET office operating expenses. A further $18.9 million was drawn from the Metropolitan Regional Improvement Fund for land purchased for the METRONET rail project and park and recreation. The Annual Report on State Finances also reports an additional grant of $513 million for METRONET projects, following successful negotiation announced in the 2018-19 Commonwealth Budget.
  • During 2017-18, $871.2 million was disbursed from the Royalties for Regions Fund. This was $192 million or 28% more than the previous year. Projects funded were for infrastructure, business and economic development and other regional initiatives. At 30 June 2018 the balance of the Fund was at the maximum, $1 billion, as set out in the Royalties for Regions Act 2009.
  • During 2017-18 the Department of Justice paid $26.7 million to 228 employees who accepted voluntary severance as part of the Government’s Voluntary Targeted Separation Scheme.
  • Total superannuation benefits paid to members and beneficiaries by the Government Employees Superannuation Board (GESB) was $417.7 million (11%) lower than budget. GESB attributes this mainly to member uncertainties about possible redundancies due to Machinery of Government and budget changes that impact on member decisions about accessing their benefits.
  • Mental Health Commission paid $702.2 million, $31.9 million or 4.8% more than the previous year, for its WA Health service agreement, reflecting an activity and cost growth for public mental health services. Commonwealth grants provided to the Commission for National Health Reform Funding of specialised mental health services increased by $29.9 million or 18.3% to $193.2 million in 2017/18.
  • Disability Services Commission expenditure on services provided by funded entities increased by $91.2 million or 13.1%, due to additional participants when Western Australia joined the National Disability Insurance Scheme (NDIS) from 1 July 2017. In December 2017, the State Government’s decision to join the nationally delivered NDIS resulted in a $70.8 million increase in Commonwealth funding for the transition. From 1 July 2018 participants commenced being phased into the Commonwealth National Disability Insurance Agency which now delivers the NDIS in Western Australia.
  • The Legal Aid Commission of Western Australia’s legal services expenses increased by 14% or $3.3 million to $26.6 million. The Commission attributes this largely due to higher than expected expensive case costs for both State and Commonwealth criminal matters, higher levels of court applications and the steady increase in the complexity of matters requiring legal representation.
  • Supplies and services expenses of the Botanic Gardens and Parks Authority increased by 26%, $1.4 million, to $6.7 million. This increase was attributed to completion of the Rio Tinto Naturescape Stage II project.


  • Main Roads’ Commonwealth grants increased by $509.2 million (193%) to a total of $772.6 million. Infrastructure projects including the Murdoch Drive extension, Reid Highway (Altone Road to West Swan Road) and Roe Highway/Wanneroo Road interchanges received a one off payment of $226 million under the National Partnership Agreement. A further $274 million was also received for ongoing projects that met their milestones, including the Great Northern Highway and Northlink WA.
  • Regulatory fines of $101.2 million from photographic traffic infringements were collected by the Police Service in 2017-18, compared to $102 and $109.6 million in the previous 2 years by the Road Safety Commission. The Police Service also collected $19.2 million in towage and storage recoups, an increase of 45.5% on the $13.2 million collected the previous year.
  • Developer contributions to the Water Corporation decreased by $21 million (10.4%) mainly due to a decline in construction activity levels in Perth, South West and North West. Bunbury Water Corporation also reported a 66% reduction in similar revenue. In contrast, the Busselton Water Corporation reported a 59.3%, $1.2 million, increase in developers’ headworks and mains contributions relating to the City of Busselton airport and other local developments during 2017-18.
  • Western Power reported a 20.7%, $37.1 million, reduction in developer and customer contributions. However, in regional Western Australia Horizon Power reported increases of $104.7 million for developer and customer contributions. Overall, Horizon Power’s revenue increased by 40.4% to $479.7 million in 2017-18.
  • Western Australian Land Authority’s land sales totalled $194.6 million, an 18.1% or $29.9 million increase on the previous year. Landcorp recorded these land sales mainly in the metropolitan areas of Jolimont and Alkimos, industrial areas of Kwinana and Baldivis and regional areas of Broome.
  • The Department of Fire and Emergency Services collected $356 million from the emergency services levy, up $15.1 million or 4.4% on the previous year. Its user charges for Direct Brigade Alarm monitored premises increased by 13.2% to $12.1 million in 2017‑18.
  • Grants and Contributions revenue of the Department of Transport increased by $12.8 million (185%) primarily due to $6.0 million for funding Bike Boulevard (Safe Active Streets) and the Public Transport Authority providing a further $4.5 million for the Burswood Jetty and $0.8 million for the METRONET Project office.
  • Forest Products Commission received a $4.5 million grant allocation from the Royalties for Regions Fund for the purchase of land in Myalup.
  • Investment revenue of the Government Employees Superannuation Board (GESB) was $465.5 million (27%) higher than budget mainly due to higher than expected investment performance. The full year investment performance was 8.5% compared to a budget of 6.5% which was provided by GESB’s asset consultant.
  • The Insurance Commission of Western Australia’s investment income of $446.7 million was $139.5 million or 45.4%, better than budget, although 4.6% lower than last year. This compared to investment income of $468.4 million last year. This resulted largely from higher than expected returns in Australian and global equities, and property investments. At year end, the Commission’s investment assets totalled $5.3 billion.
  • Building and Construction Industry Training Board levy receipts were $6.1 million (19.7%) lower than the previous year, reflecting the slowing down of residential housing construction and less commercial projects compared to the higher activity level in 2016‑17. Grants and subsidies to programs and training also reduced (by 22%, $5.2 million), reflecting the decline in apprentices and students training in the construction industry.
  • Gaming and Wagering Commission collected an additional $4.4 million in racing bet levy, increasing the total by 8.3% to $57.9 million.
  • Metropolitan Redevelopment Authority recorded $46 million in sales revenue compared to $106 million, the previous year’s very high result. The 2017-18 sales included two lots within their Central Redevelopment Area and others in the Midland Redevelopment Area.
  • Total revenue of the Zoological Parks Authority increased by 4.4% for 2017-18 to $14.7 million with admissions 1.8% and memberships 3.6% higher. A $326,000 increase (38.5%) in grants, sponsorships and fundraising also added to the total. These included new corporate sponsorship from BHP, renewal of a City of South Perth partnership agreement, and a Commonwealth Grant to support the Western Ground Parrot.
  • User charges and fees of the Western Australian Museum increased by 71.7% to $2.86 million, attributed to their Dinosaur Discovery and the Escape from Pompeii exhibitions. Similarly, user charges and fees of the Art Gallery of Western Australia increased by 71.6% to $983,000, mainly due to increased ticket sales and functions revenue from their exhibition of the Corsini Collection: Masterpieces from Florence.
  • The Department of Health collected an additional $108.4 million in Commonwealth grants and contributions. Of this increase, $52.7 million was due to additional activity based funding for 2015-16 and 2016-17 that was adjusted and received in 2017-18.
  • Royalties for regions funding received by the Department of Primary Industries and Regional Development of $137.3 million was $51.9 million or 37.8% below the budgeted funding. The lower amount of funding received reflects underspends across a number of royalties for regions projects and deferral of funding to future years.

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