10 November 2004
IMPROVED ACCOUNTABILITY PROCESS FOR $400 MILLION IN COMMONWEALTH/STATE NATURAL RESOURCE MANAGEMENT FUNDING A PRIORITY, SAYS A-G.
Concern has been expressed by WA Auditor General Des Pearson over the progress made in strengthening accountability arrangements for some $400 million in Commonwealth and State bilateral natural resource management funding.
The funds, primarily to tackle a range of natural resource problems such as salinity, are to be received and distributed by six WA regional natural resource management groups over the next four years.
To date, the groups have received $7.1million in foundation funding to help develop regional natural resource management strategies and investment plans and $6.4 million to fund priority projects across the regions, with management of the funding process by the Department of Agriculture being adequate, says Mr Pearson.
However, with a significant increase in funding imminent (each group will be responsible for funding projects ranging from $3 million to $23 million each year for the next four years – a total of around $400 million) far more rigorous arrangements are necessary.
Yet to be resolved issues relating to governance structures, the capacity of the groups to meet higher governance standards, and the need for the Department to obtain greater assurance that public moneys are spent appropriately, must be given high priority, states Mr Pearson, and current governance arrangements within the groups need to be strengthened to reflect the increase in funding.
Mr Pearson’s concerns are outlined in his Report on Ministerial Portfolios, tabled in Parliament today.
Principally, the report summarises the results of 169 financial statement and controls audits and 127 performance indicator audits completed to November 1 at agencies across the public sector, and details sector-wide or specific concerns arising from those audits.
It shows that the number of agencies receiving a qualified audit opinion on either financial statements and controls or performance indicators fell significantly in 2003-04 (from 12 in total last year to only 3).
The opinions of two agencies were qualified in relation to controls or financial statements:
- The Rottnest Island Authority was qualified for the fourth consecutive year over control inadequacies in the case of landing fees – the Authority relying on information provided by third parties to determine the landing fee revenue due, but not having the controls in place to verify the accuracy or completeness of that information.
- The Government Employees Superannuation Board was qualified for the second consecutive year because it could not reconcile its bank account to the general ledger during the year, as there was a significant number of unexplained reconciling items.
In regard performance indicators, only one agency was qualified – the Department of Education Services, as its new effectiveness indicators on non-university providers of higher education awards were not reported as the data was not collected for the 2003-04 reporting period.
Whilst agency timeliness in the submission of financial statements improved markedly on last year their quality remained a concern to Mr Pearson, the report noting that a significant proportion of agencies continued to submit poor quality financial statements and performance indicators, containing numerous technical and typographical errors, misstatements, and irrelevant, inconsistent or missing note disclosures.
In addition, poor quality supporting working papers and the unavailability of key agency staff due to leave and other commitments at critical stages of the audit process complicated the audit task and required additional audit resources and time to complete audits.
However, the number of ‘better practice’ agencies identified by the Auditor General as submitting good quality statements did rise to 26, an improvement of 10 on last year.
Sector-wide compliance and control issues identified included:
- Significant IT security access control weaknesses and inadequate disaster recovery or business continuity plans continued to be evident at many agencies.
- Payroll procedures require improvement at most of the agencies reviewed, with higher priority given to payroll controls including review of payroll reports by cost centre managers to provide assurance of the accuracy and validity of each payroll distribution.
- Statements of Corporate Intent for the Water Corporation, Western Power and the eight port authorities were again not tabled in a timely manner to enable the Parliament to consider their contents.
Ends/.
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