AUDIT RESULTS REPORT: Universities and TAFE Colleges;
Other
audits completed since 16 October 2006; and Legislative Changes
and Audit Practice Statement
Report No 4 -
March 2007
Audit findings from the annual attest audits of financial statements
and performance indicators prepared by agencies are summarised for Parliament
in two reports each year.
This Report covers agencies with a 31 December
2006 reporting date, and includes the finalisation of other 2006 audits
not previously reported.
The Report also contains:
- key reforms resulting
from the new Auditor General Act 2006.
- an update of our Audit Practice
Statement that details the extent and character of the public sector
audit function.
Key Findings
- All four universities, four of their subsidiaries
and nine of the 10 TAFE colleges with a reporting date of 31 December
2006 received clear opinions. One TAFE college received a qualified
opinion on its financial statements and on its controls.
- Two agencies
with a 30 June 2006 reporting date have been issued with opinions on
financial statements, controls and/or performance indicators since
16 October 2006. One opinion on performance indicators was qualified.
- Flaws in the Government Employees Superannuation Board’s (GESB)
investment switching process allowed a small number of members to gain
financial advantage. The GESB has used $3.8 million of reserves to
offset the disadvantage suffered by other members.
- Weaknesses in information
system security arrangements continue with many being contrary to the
most basic information system security practices. Agencies acknowledge
these weaknesses each year but invariably fail to take a holistic approach
that will prevent emergence of related security weaknesses.
- The Department
of Education and Training (DET) has serious weaknesses in its financial
management and governance arrangements that need to be addressed. These
relate to its:
- asset management procedures
- financial management and
controls in schools
- internal audits of schools and the internal
audit services it provides to TAFE colleges.
- The computer applications
for managing student records at Curtin and Edith Cowan universities
were found to be reliable. These applications are critical to the
operational effectiveness of the universities.
- Certification of
payroll reports by cost centre managers is a fundamental control
that was not consistently followed at two universities and six
TAFE colleges.
- This control failure repeatedly occurs in universities
and TAFE colleges.
- The Professional Standards Council has not submitted
certified financial statements and performance indicators for
audit since the period ending 31 December 2002. This situation
is unsatisfactory and requires resolution.
- DET and two TAFE colleges
failed to provide adequately prepared financial statements and
supporting working papers by the agreed date, thereby affecting
the timeliness and cost of the audits.
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