Audit Results Report by Ministerial Portfolios at 19 November
2007 - Opinions on Ministerial Notifications - Performance Examination
of Administration of Natural Resource Management Grants
Report 11 - November 2007
This Report is presented in three parts.
- The first part covers attest audit activity to 19 November 2007. Audit
findings from the annual attest audits of financial statements and performance
indicators prepared by agencies for the 2006-07 year are summarised.
- The second part explains opinions formed under section 24(2)(c) of
the Auditor General Act 2006 (AG Act), this being a new provision that
came into operation on 1 February 2007. It also includes the opinions
formed up until 19 November 2007.
- The final part of the report is the results of a performance examination
of the Administration of Natural Resource Management Grants in Western
Australia.
Audit Results Report 2006-07
Audit Opinions
- One hundred and seventy-two audit opinions were issued by 19 November,
168 related to the 2006-07 financial year. Two Financial Management
Act 2006 (FM Act) agencies are still not ready for their 2006-07 audit
and a further five have not submitted performance indicators for audit.
- Four agencies received a qualified opinion. One of the four agencies,
the Eastern Goldfields Transport Board, received a qualified opinion
on its financial statements, controls and performance indicators. Of
the other three agencies, one received a qualified opinion on controls
and two on performance indicators.
Management Issues
- Fifty-eight of 135 agencies audited on controls had significant and/or
moderate financial management control weaknesses brought to their attention.
- Thirty-seven of 45 agencies that were subject to information system
audits had significant and/or moderate information control weaknesses
brought to their attention. Security weaknesses remain the biggest concern,
making up over 60 per cent of the total findings, over half of which
are easily implemented access controls. Such controls are fundamental
to good security.
Better Practice Agencies
- Forty agencies were rated as better practice agencies in 2007, an
18 per cent improvement on the prior year. Sixty-one agencies (41 per
cent) were rated as poor, a slight improvement on the 45 per cent rated
as poor last year. Our assessment is based on the quality and timeliness
of financial statements and general good financial practice.
- Many agencies continue to provide financial statements, performance
indicators and supporting working papers for audit that are of poor
quality and/or untimely.
- Only 98 of the 131 FM Act agencies (75 per cent) with a 30 June reporting
date tabled their annual report in Parliament within the required 90
days of the financial year end. In the prior year 86 per cent of agencies
tabled on time.
Corporate Governance and Reporting Issues
Eighteen agencies have the legislative requirement to prepare
their Statement of Corporate Intent (SCI) for tabling by their Minister
in Parliament. Only one, the Western Australian Treasury Corporation achieved
this prior to the commencement of the year to which the SCI relates. However,
five others including the four electricity corporations complied with
their legislation and reached agreement with their Minister prior to the
start of the financial year and then tabled their SCI within 14 days.
This was a considerable improvement on the prior year.
Opinions on Ministerial Notifications
From 1 February 2007, two new Acts, the AG Act and the FM
Act became operative. The FM Act requires Parliament and the Auditor General
to be given written notice where a Minister decides that it is reasonable
and appropriate not to provide requested information to Parliament. Further,
section 24(2)(c) of the AG Act requires the Auditor General to form an
opinion on the reasonableness and appropriateness of a Minister’s
decision not to provide information to Parliament. This opinion is to
be reported to Parliament.
This report contains the opinions arising from the notifications
as well as an explanation of how these opinions are formed.
In the period 1 February to 19 November 2007, 42 ministerial
notifications under section 82 of the FM Act were received relating to
41 Parliamentary Questions asked of Ministers in the Legislative Assembly
and one asked in the Legislative Council. In each case the Auditor General’s
opinion is that the Minister’s decision not to provide the requested
information to Parliament was reasonable and therefore appropriate.
Performance Examination of the Administration of Natural
Resource Management Grants in Western Australia (WA)
Since March 2003, the State and Commonwealth governments
have jointly invested hundreds of millions of dollars into Natural Resource
Management (NRM) projects in WA under two bilateral agreements. Approximately
60 per cent of this money is directed through six regionally based NRM
groups. The rest is managed directly by the State. We last looked at this
area in 2004 and recommended that the governance processes of the groups
needed to be strengthened. This new examination has sought to establish
whether appropriate governance arrangements now exist and to review the
progress in implementing the bilateral agreements.
What the examination found...
- The NRM groups we examined are providing a community leadership role
for NRM in their regions. This includes identifying NRM priorities and
coordinating projects and funding. They have also established satisfactory
governance arrangements to manage the large public NRM investment in
their regions.
- It is now timely to review the program logic of the strategies and
investment plans and to review the targets and planned activities to
ensure they are still relevant, achievable and cost effective.
- It is not currently possible to determine whether the $382 million
spent since March 2003 is achieving objectives or represents value for
money. The monitoring, evaluation and reporting frameworks needed for
such assessments have only recently been developed and are still being
implemented.
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