Audit Results Report on Universities and TAFE Colleges and other audits completed since 1 November 2004

Report No 3 - May 2005

This Report summarises the results of fi nancial statement, controls and performance indicator audits for:

• four universities, ten TAFE colleges and ten of their subsidiaries
• 22 agencies with a 30 June 2004 reporting date, completed after the 1 November 2004 cut-off for Report 9, November 2004
• two other audits with a 31 December reporting date and two final audits.

Commentary on issues identified during these audits and on progress by agencies with implementation of the Australian Equivalents to International Financial Reporting Standards (IFRS) is also provided.

Universities and TAFE Colleges

Clear (unqualified) audit opinions were issued for all universities, TAFE colleges and their subsidiaries for the 2004 year.

All substantive issues identifi ed during the audits were satisfactorily resolved.

A range of other matters noted were not signifi cant enough to warrant a qualification. These matters included the need to strengthen controls over:

• computer access and security
• payroll
• purchasing and accounts payable (particularly suppliers' master file changes)
• corporate credit cards
• appointment of certifying officers.

Management also needs to address:

• updating and periodic testing of business continuity and disaster recover plans
• improving asset management procedures to ensure assets are controlled and reported appropriately
• updating documentation for computer systems, and accounting, human resources and payroll systems
• reducing employees' outstanding annual and long service leave balances
• appointing the Auditor General as auditor of any subsidiaries created as separate legal entities, consistent with FAAA requirements.

In addition, the Department of Education and Training (DET) needs to address the deficient authorisation of fee for service training programmes at colleges.

Management Issues

Timeliness and Quality

Timeliness in submitting certified financial statements and performance indicators for audit improved slightly overall. Continued attention is however required with 11 of the 14 agencies submitting on the last two working days before the statutory deadline. The others submitted or provided the necessary certifications after the due date. However, although certifi cations were late, the availability of working papers and experienced staff at Curtin University of Technology and Murdoch University assisted in the timely completion of their audits. A further positive development was the early provision of performance indicators by Edith Cowan University and the University of Western Australia which enabled earlier commencement of their audits. Similarly the Great Southern TAFE is to be commended for providing advanced draft fi nancial statements well before the statutory deadline.

Improvement in the overall quality of the financial statements and performance indicators and related working papers was noted. Also, availability of experienced staff assisted in the timely or earlier completion of the audits.

Continued commitment is however required to further improve this routine annual process as well as to effect a smooth transition to IFRS and adoption of other changed accounting arrangements. For colleges there is a particular need for improved liaison with the DET to improve consistency in approach.

Information Technology (IT) Controls

IT control weaknesses were found at all four universities and the seven colleges subjected to IT review during 2004. There is a need to address the identifi ed control weaknesses to improve computer access and security to networks and databases, monitoring of system access attempts, computer policies, procedures and system documentation and business continuity and disaster recovery planning and testing.

Australian Equivalents to International Financial Reporting Standards (IFRS)

Implementation of IFRS is the biggest change the accounting profession in Australia has had to address in many years. Agencies satisfactorily planned for IFRS implementation though agency management now needs to actively drive and accelerate the process to meet the specified 2005 and 2006 timelines. Audit review of agencies' opening balance sheets prepared using IFRS disclosed that while substantial progress has been made, many signifi cant and further tasks remain.

Finalisation of 2004 Audit Cycle

Twenty two audits of agencies with a 30 June 2004 reporting date have been completed since 1 November 2004 (Report 9, November 2004). Unqualifi ed audit opinions were issued for all except the Metropolitan Public Hospitals Board. The Board was again qualifi ed as the controls exercised over postal remittances relating to Special Purpose Accounts were not adequate and assurance could not be provided that all postal remittances have been receipted and properly brought to account.

Other Audit Work

Unqualified audit opinions have also been issued for:

• Legal Contribution Trust, six monthly financial statements ending 31 December 2004
• Anzac Day Trust for the year ended 31 December 2004
• final audits of the Potato Growing Industry Trust Fund Advisory Committee and Poultry Industry Trust Fund Committees which were abolished on 31 January 2005.

Half yearly reviews of fi nancial reports for the period ended 31 December 2004 were completed for Keystart Bonds Limited, Water Corporation and Western Power Corporation.

Management assertions were confi rmed in 15 certifi cations issued for fi nancial and statistical data produced by agencies to discharge conditions of Commonwealth funding agreements, grants or legislation. These were issued in a timely manner to assist agencies to receive ongoing funding or to apply for future funding under existing or new agreements.

Click here for the Full Report in Adobe PDF (200kb PDF)

Problems downloading this report? Email our webmaster

Home Page | About the Office | Reports To Parliament | Performance Indicators | Other Publications
Media Statements | Work in Progress | Contact OAG | Resource Links | Annual Report | Job Vacancies

Information Copyright © 1996-2008 Office of the Auditor General
Disclaimer/Copyright | Privacy Declaration