Third Public Sector Performance Report 2007
Report 7 - June 2007
This third Public Sector Performance Report for 2007 brings to notice
legislative compliance and financial management and control issues.
Management of Land Tax and Metropolitan Region Improvement Tax
Background
Land Tax and Metropolitan Region Improvement Tax (MRIT) account for 16
per cent of the $2.38 billion in property taxes collected in 2005-06.
The Office of State Revenue (OSR), which is part of the Department of
Treasury and Finance (DTF), is responsible for administering these taxes.
Latest OSR estimates are that these taxes will collect $462 million from
127 000 taxpayers in 2006-07. This represents eight per cent of total
estimated State taxation revenue in 2006-07.
What the examination found...
- Approximately 10 per cent of land tax assessments issued for the 2006-07
assessment year had to be re-assessed. This high rate is principally
caused by data inaccuracies in the Revenue Collection Information System
(RCIS) database used to generate assessments.
- In addition to the above, in 2006-07, OSR issued 2 159 adjusted assessments
for prior tax years. The net impact was a reduction of $1.7 million
in tax raised. In 2005-06 OSR issued 6 109 adjusted assessments for
prior tax years with a net increase in tax raised of $1.2 million. Adjusted
assessments principally arise from correcting data inaccuracies in RCIS.
- Addressing the data inaccuracies is a slow process. OSR estimates clearance of the current backlog will take 18 months.
- Audit testing identified a three per cent error rate in the granting
of exemptions from land tax. Although this error rate is low, it nevertheless
suggests the likely loss of significant revenue as a result of un-issued
land tax assessments.
- OSR has implemented a Land Data Integrity Project to address the underlying
cause of the data inaccuracies. The project, which is expected to be
completed in 2007-08 aims to address incompatibilities, quality, timing
and format issues in the data sourced from external agencies.
- Land tax and MRIT debts are collected on a timely basis. Tax liabilities
including late payments are managed effectively with less than 0.1 per
cent of the average $368 million in revenue raised each year being written
off.
- MRIT is being used for the purposes intended in the Planning and Development Act 2005.
Legal Aid in Western Australia
Background
The Legal Aid Commission of Western Australia (the Commission) has responsibility
for ensuring the general community has access to legal advice, and to
legal representation in the case of those who are socially or economically
disadvantaged. The Commission provides a range of services including general
information and advice, a duty lawyer service in various Courts, and legal
representation. In 2005-06, 170 000 individual services were provided
at a cost of $37 million. Grants for legal representation represented
only about five per cent of the total number of Commission's services
but accounted for almost half of its annual expenditure.
What the examination found...
- Grants of aid for legal representation are made in a timely manner.
- Grants of aid generally comply with the relevant legislation and guidelines
though improvements are needed to some aspects of the administrative
process. The main ones are:
- adequate verification of applicants eligibility under income and
asset tests
- regular quality reviews of decisions to grant aid for legal representation
to ensure appropriate decisions are made by assessors.
- regular reviews by grant managers of case progress and of continued
eligibility for funding.
- The Commission has a satisfactory understanding of the demand placed
on its services. However, like all other Australian Legal Aid Commissions,
it lacks information as to whether this 'expressed demand' is representative
of total need for legal assistance.
The Administration of Grants
Background
Western Australian public sector agencies issue grants valued in the
hundreds of millions of dollars annually. In 2005-06, the Department of
Culture and the Arts (DCA) provided funding of $12.4 million to 18 not-for-profit
organisations to support their artistic and cultural programs. The Department
awarded a further $6.6 million in specific purpose grants to individuals
and groups. The Pilbara Development Commission (PDC) administers two components
of the State's Regional Investment Fund (RIF): the Pilbara Priority Partnership
Fund commonly known as the Pilbara Fund (PF) and the Pilbara Regional
Development Scheme (PRDS). In 2005-06 $5.8 million was distributed from
the Pilbara Fund and almost $400 000 from the Pilbara Regional Development
Scheme. Grants went to support projects aimed at improving sustainable
social and economic development in the region.
What the examination found...
- DCA and the PDC are adequately administering their grant programs.
- However, weaknesses exist in some aspects of the administration process, specifically:
- a lack of documentation to demonstrate that applicants' eligibility
for funding was assessed
- funding agreements and other documentation that contained errors and inconsistencies
- inadequate review of acquittal reports or follow-up of late reports. Acquittal reports provide evidence that funds are spent
appropriately.
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