30 August 2006
WESTERN POWER REDUNDANCY PAYMENTS REGULAR BUT VERY
GENEROUS, SAYS AUDITOR GENERAL
Auditor General Des Pearson’s much-anticipated probe into the
Western Power redundancy payments reveals that whilst the Board acted
within its powers, the provisions of the written executive contracts
were “significantly exceeded” and this resulted in more generous
payments than the contracts provided for.
Mr Pearson’s findings are detailed in his Second Public Sector
Performance Report, tabled in Parliament today, which also contains one
performance examination (Informing the Public: Providing Information
on the Timeliness of Services), and a follow-up examination of the report
Setting Fees – Extent of Cost Recovery tabled in September 2004.
In examining the circumstances surrounding the Western Power executive
payouts Mr Pearson covers the areas of accountability, communication,
records, and contracts – providing specific examples.
Issues raised include:
- During the final audit of Western Power requests for information
took too long to resolve and the responses often lacked clarity and
generated more questions, thus failing the test of openness that should
exist between auditee and auditor.
- The Board and Executive of Western
Power considered that adequate communication with the Minister existed
throughout the break-up of Western Power – Mr Pearson did not
find adequate evidence to support this view.
- Western Power records in relation to the terminations examined were
not complete, with much of the rationale for decisions taken not recorded.
- Audit
had previously raised with Western Power the poor quality of its records
in relation to an executive termination payout – it
was of concern that similar issues arose again so soon.
- There were
variations or extensions made to the existing contracts that had the
effect of increasing the termination payment to the executives concerned.When
the Board decided the level of the payout, in each case the option
exercised significantly exceeded the written contract provisions and
records do not detail any consideration of alternatives.
- Western Power’s
justification for the approach it adopted was that as the Minister
had approved a redundancy payment for one executive there was an “ethical
imperative” for another, and that
the treatment of the third executive was based on “existing custom and
practice”.
- The view of the Board members is that there
was no variation in the contracts but that the payments were actually
a fulfilment of the “written
and unwritten conditions” of the contracts.
The Follow-up of the September 2004 report Setting Fees – Extent
of Cost Recovery also included a review of the fee setting policies and
practices at six more agencies.
Findings included:
- The departments (Planning and Infrastructure and Consumer and Employment
Protection) that were significantly over recovering fees in 2004 have
reduced them by between 18 per cent and 50 per cent, whilst the Metropolitan
Cemeteries Board has not reduced the over recovering fee and is unlikely
to do so.
- Of the six agencies reviewed, only the Department of the
Attorney General’s probate fees significantly over recovered
costs (by almost 200 per cent) with no clear justification available
for this level of over recovery.
- Agencies are now required to certify
to the Department of Treasury and Finance (DTF) that their fee setting
practices are materially accurate and the fees reasonably reflect
costs, however DTF does not test the reliability of these certifications
as part of its oversight role.
The Performance Examination Informing the Public: Providing Information
on the Timeliness of Services reviewed the quality of timeliness information
publicly provided by seven agencies for a sample of nine key services:
police, fire, ambulances, water, electricity, buses, metropolitan and
country trains, and taxis.
Findings included:
- For the services reviewed, the Western Australian
public are generally well served in terms of the quality of timeliness
information provided to them compared to other Australian states.
- The
agencies reviewed could improve the usefulness of the timeliness information
by:
- providing the range of times it takes to deliver services
- identifying
times and localities where performance differs
- explaining how targets
are set and the reasons for not meeting them
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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