NSW Audit Office - Awareness - Issue 2004 01 - February 2004

AWARENESSccounting and Auditing Developments Issue 1 FEBRUARY 2004
AUDIT OFFICE 1AUDIT OFFICE UPDATE
UPDATE
AUDITOR-GENERAL’S REPORT TO PARLIAMENT 2003, VOLUME SIX ACCOUNTING 6
UPDATEThis report was released on the 4 December 2003. Significant issues in this
volume include:
URGENT ISSUES 7
GROUP UPDATECompliance Review of Accountability and Reporting Requirements
for State Owned Corporations (SOCs)
INTERNATIONAL 9
The SOC Act requirement to table documents in Parliament within 14 sitting UPDATE
days does not always facilitate accountability on a timely basis.
MISCELLANEOUS 10
Compliance Review of the Engagement and Use of Consultants PUBLICATIONS
Some agencies are not meeting documentation, conflict of interest, performance
LEGISLATIVE 11evaluation and reporting requirements for engaging and using consultants.
UPDATE
Attorney General’s Department
TREASURY 12
The costs per case finalised for the Supreme and District courts were UPDATE
substantially lower, but for local courts significantly higher than the national
average. PREMIER’S 14
DEPARTMENT
Office of the Protective Commissioner-Common Fund UPDATE
Funding of the operations of the Office was not equitably borne by all clients.
AUDIT OFFICE 15
The Office does not adequately record client assets not held in the investment BETTER PRACTICE
funds. GUIDES
Since the externally managed investment funds were established on 2 April
2002, the value of the funds has fallen by $48.2 million.
NSW Fisheries
The Marine Parks Authority has on occasions produced an annual report for
tabling in Parliament that includes financial information not prepared according
to Australian Accounting standards and not audited by us. Because of this, there
is a risk that readers of the report may gain an incorrect understanding of the
Authority’s financial position.
WorkCover Scheme Statutory Funds
The accumulated deficit increased to $2,982 million at 30 June 2003 ($2,801
million at 30 June 2002). Proposed changes to the Scheme are estimated to
result in savings of $2,000 million over 5 years.
Awareness is published by The Audit Office of New South Wales, 234 Sussex Street,
Sydney NSW 2000, GPO Box 12, Sydney NSW 2001 Telephone 9285 0155 Fax 9285 0001
Email Terry.Hogan@audit.nsw.gov.au Website www.audit.nsw.gov.au
CONTENTSDepartment of Education and Training
The full financial transactions of schools were included in the Department’s financial report for
the first time. However due to inadequacies in accounting records and absence of an integrated
accounting system, the recorded school transactions are imprecise.
Corrective Services
The proportion of the NSW adult population serving correctional orders has climbed from 2 per cent
above the national average in 1997-98 to 6 per cent above in 2001-02.
The NSW performance in a number of key areas compares unfavorably with the national average,
including prisoner assault, and average inmate costs. It is performing better in escapes from
open perimeters, in completing community orders, and in the cost of these areas. The biggest
improvement was in lowering the rate of unnatural deaths.
State Transit Authority
Only 39 per cent of Sydney and 3 per cent of Newcastle bus routes are profitable. All ferry routes
are unprofitable.
SAS Trustee Corporation –Pooled Fund
Unfunded liabilities increased from $12.7 billion at 30 June 2002 to $16.5 billion at 30 June 2003.
Costs as a percentage of funds under management are substantially below the average expense
ratio for public sector funds.
Sydney Water
Sydney Water wrote off $51.2 million of Customer Information Billing System expenditure during
the year.
The Board has approved a detailed action plan and timetable for improving how it manages risk and
delivers major projects. As well, the Audit and Risk Management Committee’s charter now includes
overseeing large projects.
We continue to have some concern about Sydney Water’s ability to fund the replacement of its
system assets given its current pricing structures.
Further information
Barry Underwood, Acting Director, Governance and Communications on 92850020 or barry.underwo
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2 3The Audit Office of New South WalesFOLLOW-UP OF PERFORMANCE AUDITS: NSW POLICE. ENFORCEMENT OF STREET
PARKING. STAFF ROSTERING,TASKING AND ALLOCATION
Periodically we review the extent to which agencies have implemented the recommendations they
accepted from earlier audits.
Where agencies accept our recommendations, there is an expectation they will implement them in
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improve on their performance, may diminish.
This audit examined changes by NSW Police following two earlier reports:
Enforcement of street parking (November 1999)
Staff rostering, tasking and allocation (January 2000)
Audit opinion
NSW Police accepted all nine recommendations in the earlier reports. Some changes have been
made, however there are still matters raised in the reports that need to be addressed.
Enforcement of Street Parking
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NSW Police. The audit focussed on the adequacy of guidelines on enforcement; arrangements for
enforcing the law; and management of the function. The 1999 audit found that arrangements were
not as efficient and effective as they could be, and needed to be reviewed.
We have found that since the 1999 audit, progress has been made to address the issues raised.
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street parking from NSW Police to local councils in 2002.
There is, however, one recommendation that has not been advanced to the extent we believe
is warranted. Legislation needs to be reviewed in respect of multiple infringements, penalty
structures and fine strategies for drivers from overseas.
Staff Rostering, Tasking and Allocation
The 2000 audit examined the efficiency and effectiveness of staff rostering, tasking and allocation
systems and practices at metropolitan Local Area Commands (LACs). Rostering and tasking systems
and flexible staff allocation practices are critical to the successful deployment of officers to
proactive policing.
The original audit found that information systems did not adequately support intelligence-based
rostering and tasking by LACs. In addition, proactive policing was not clearly defined resulting in
different interpretations by LACs, thereby preventing service-wide measurement and analysis of
impacts.
At the time of the 2000 audit, NSW Police was planning a wide range of information technology
initiatives to improve the use of intelligence data in deciding the most effective ways to deploy
police. Our original audit concluded these enhancements would help NSW Police better target
proactive, high-visibility policing, and improve the overall efficiency and effectiveness of crime
reduction strategies.
2 3The Audit Office of New South Wales The Audit Office of New South WalesThis audit found that a service-wide rostering system has been introduced, along with a system
to allocate and record proactive tasks. However, neither system interfaces with intelligence
databases. In addition, NSW Police has not addressed the issue of what activities constitute
proactive policing.
NSW Police has not adequately monitored the implementation of these recommendations. In our
opinion, most of the issues raised in the 2000 report still need to be addressed. In view of this, we
propose to conduct a further follow-up in 2004-05.
Further Information
Jane Tebbatt, Principal Performance Auditor Phone: 02 9285 0074 E-mail: jane.tebbatt@audit.nsw
.gov.au.
The report was tabled in Parliament on 10 December 2003 and can be accessed at
www.audit.nsw.gov.au.
PERFORMANCE AUDIT REPORT-CODE RED: HOSPITAL EMERGENCY DEPARTMENTS-
DEPARTMENT OF HEALTH, NSW AMBULANCE SERVICE
This audit follows an earlier study where we examined data on Nepean Hospital’s ‘code red’ status.
We found a number of instances where Ambulance Service records differed from hospital records.
We then announced our intention to carry out a wider review.
Code red is part of the Emergency Department Network Access Scheme (EDNA) introduced in
July 2002. When a hospital goes red it means that there are no spare beds and ambulances must
divert patients with less serious conditions to neighbouring hospitals. It is designed to ensure that
patients get faster access to care and that ambulances and their crews are not delayed at the
emergency department and unavailable to respond to other calls.
The scheme aims to spread demand more evenly across the network. Therefore it can only be fully
effective if neighbouring hospitals have the capacity to treat diverted patients without themselves
going code red.
In this audit we visited 3 metropolitan hospitals. We wanted to find out whether they followed the
Dep