11 December 2002
REPORT PUTS SPOTLIGHT ON PUBLIC SECTOR FINANCIAL MANAGEMENT AND ACCOUNTABILITY
ISSUES
From concerns over exhibition revenue at the Art Gallery to disquiet
over the less than cost-effective leasing of a Fisheries Department patrol
vessel, the WA Auditor General’s last report for 2002, tabled in
Parliament today, throws the spotlight on a broad range of accounting,
control and audit issues across the public sector.
Primarily, Auditor General Des Pearson’s “Report on Ministerial
Portfolios” details the results of 183 financial statement and 140
performance indicator audits completed to the end of November at government
agencies, however it also draws to the attention of Parliament a number
of significant financial management, performance indicator and accountability
issues.
As a result of the audits the opinions of 15 agencies were qualified
in relation to either financial statements, controls or compliance with
relevant laws, the more significant of these being:
- The Board of the Art Gallery of WA received a qualified audit opinion
as controls over the collection, banking and reconciliation of exhibition
revenue were inadequate and an opinion could not be given on the completeness
and reliability of over $2.6 million of exhibition revenue.
Further, controls over the recording of revaluations of art works
were inadequate and an opinion could not be given on the increase
in the valuation of art works of $8.2 million.
- The Department of Transport and the Department for Planning and Infrastructure
had their opinions qualified for not having an effective reconciliation
process for their bank accounts.
Planning and Infrastructure had a balance of over $3 million in outstanding
reconciling items, with the result that an opinion could not be formed
as to whether cash assets of over $36 million and cash of $2.2 million
were fairly presented in the financial statements.
A similar situation existed at Transport with about $5 million unreconciled
and thus uncertainty whether cash assets of nearly $18 million and
cash of $133,000 were fairly presented.
- The Rottnest Island Authority was qualified for the second year over
control inadequacies in the case of landing fees. The Authority relied
on information provided by third parties to determine the landing fee
revenue due, but did not have the controls in place to verify the accuracy
or completeness of that information.
- The Department of Industry and Technology was qualified as it did
not have the authority to charge suppliers to government agencies fees
of nearly $2million; further they did not have the authority to retain
those fees which were used to partially offset the cost of managing
common use contracts.
The audit review of the Fisheries Department’s decision-making processes
as to whether to lease or buy a replacement patrol vessel, concludes that
when all factors are taken onto account the decision to lease could finish
up costing Fisheries a minimum of $210,000 more than if they had bought
the vessel outright, with all leasing costs to be recovered from Western
Rock Lobster fishery licence holders.
The report notes that despite advice from the Department of Industry
and Technology (and confirmed by Treasury) that purchasing the boat had
become the most economical option after initial figures had indicated
a marginal benefit from leasing, Fisheries proceeded with the lease arrangement.
Other matters reported by the Auditor General included:
- At the Real Estate and Business Agents Supervisory Board and the Settlement
Agents Supervisory Board significant ‘back interest’ from
agents’ trust accounts was paid to the Boards ($202,000 and $68,000
respectively) during the 2001-02 financial year which should have been
paid in prior periods.
This had occurred because agents’ accounts had been opened with
banks as normal accounts rather than the required trust accounts or
agents had changed banks but not informed the Board.
- The Department of Health’s performance indicators were qualified
as the Department’s effectiveness indicators were not comprehensive
and did not address all of the Department’s outcomes.
Additionally, the efficiency indicators did not include approximately
$250 million of the Department’s total expenditure of $521 million.
- There has been no significant improvement in Information Technology
Controls since last year in relation to password and computer access
and security controls; and approval and review of system modifications.
Ends/.
Media Contact: Peter Villiers, Manager Reporting and Communications
Tel: (08) 9222 7558. Mobile: 0417 936 171 Fax: (08) 9322 5664
4th Floor Dumas House 2 Havelock Street West Perth
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