Fourth Public Sector Performance Report 2007
Report 9 - September 2007
This Fourth Public Sector Performance Report for 2007 brings to notice
legislative compliance and financial management and control issues.
Management of Asbestos-Related Risks by Government Agencies
Background
While asbestos was banned completely in 2003, asbestos products may be
present in many buildings, particularly those built before 1990. When
asbestos products are in good condition there is little risk posed to
people’s health. However, if asbestos products become damaged or
degraded, there is a risk if people inhale airborne asbestos fibres.
The Occupational Safety and Health Regulations 1996 requires all persons
in control of a workplace to identify the presence and location of asbestos
and to assess risk. In 2004 all Government agencies were directed to establish
an Asbestos Register and a Management Plan by December 2005. Our examination
involved an assessment of asbestos management activities at eight agencies
with large building portfolios.
What we found...
- None of the eight sampled agencies had complete or up-to-date asbestos
registers at the time of audit. Three of the agencies lacked any register.
While the absence of an asbestos register does not mean that buildings
are unsafe, without a register agencies cannot determine the extent
of asbestos related health risks to staff or the broader community.
Agencies are also potentially liable for fines of up to $50 000 for
not complying with the OSH Regulations. Of the two sampled agencies
with the largest building portfolio:
- Department of Education and Training had almost completed its
register at the time of audit. This covered about 784 buildings
including 759 schools.
- Department of Housing and Works (DHW) did not have comprehensive
registers for its pre 1990 public housing stock (approximately 19
000 houses). DHW advised that it has a system containing some information
and conducts inspections of all public rental properties where obvious
asbestos containing materials are examined.
- None of the sampled agencies had complete or up-to-date management
plans. Three agencies had no plans. Of the agencies with plans, none
had timelines for action, management options and reasons for decisions
as required by the regulations. This includes priorities and dates for
reviewing risk assessments.
- Seven of the eight sampled agencies have undertaken asbestos removal
programs in the last eleven years, five of which were major programs.
However, only two of these removal programs arose from established asbestos
risk profiles.
Tracking Timber Logged From South-West Native Forests
Background
Approximately 630 000 tonnes of log timber worth $44 million was harvested
from south-west native forests in 2006-07. The Forest Products Commission
(FPC) is responsible for the harvesting and sale of this log timber. We
looked at how FPC records and tracks south-west native forest log timber
harvested by its contractors. The review arose out of a public complaint
alleging that some customers were receiving log timber outside of the
terms of their contracts and of failings in FPC’s system for recording
deliveries.
What we found...
- The extent of theft of log timber is unknown. Although FPC’s
system for recording the delivery of log timber to customers conforms
with the Forest Management Regulations 1993, it does not enable the
tracking of individual harvested logs which would be required to determine
theft. Its system is based on truck loads of log timber delivered to
customers as recorded on Delivery Notes. FPC has assessed the likelihood
of theft as moderate and considers that its system has efficiency benefits.
- FPC has a reasonable framework for compliance monitoring but the extent
of monitoring is low. The Regulations require FPC to ‘…endeavour
to ensure that…’ a minimum of five per cent of delivery
notes are checked for accuracy. FPC checked 4.8 per cent of delivery
notes in 2006-07, though in south-west native forests only 2.6 per cent
were checked. The activities are intended to provide assurance that
contractual obligations are met and to dissuade the theft of log timber.
Establishing Contractual Arrangements with Private Business
Background
Many Government agencies engage in business activities with private sector
organisations for profit-making purposes, though for most it is not a
normal function. In January 2007 the Standing Committee on Estimates and
Financial Operations requested that we review two such arrangements entered
into by the Western Australian Sports Centre Trust (the Trust). The largest
of these involved a series of five agreements to stage rock music concerts
at Arena Joondalup. Nine concerts were staged between 1999 and 2006, generating
a trading profit of just over three million dollars. This report outlines
the result of our review of these rock concert agreements.
What we found...
- The Trust did not follow fundamental governance practices prior to
entering into the first or subsequent agreements to stage the rock concerts.
Specifically, it did not:
- conduct and/or document due diligence checks of the other party
to the agreement
- undertake and document adequate financial and risk analysis.
- obtain legal advice in the drafting of the agreements
- submit the draft agreements to the Board for its approval.
- The financial returns to the Trust from several of the concerts have
not reflected that it has borne nearly all the risks under the agreements.
- The Trust has at no time considered whether it could obtain more
favourable terms and outcomes under a like arrangement with other partners.
Such a step would have been prudent.
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