The Construction Industry Training Board (the Board), is a body corporate established under the Construction Industry Training Fund Act 1993.
The Board’s principal responsibility is to manage the Construction Industry Training Fund. This involves the imposition and collection of a levy on construction projects and the coordination of appropriate training plans and programs for the building and construction industry.
The Board also acts as a principal adviser to the relevant South Australian and Federal Ministers on any matter relating to training in the building and construction industry.
The Board’s organisational structure is shown in the following diagram.
Industry levies were $8.1 million, an increase of $1.4 million, 20.7 percent.
Training and related expenditure was $7.4 million ($6.3 million).
Subsection 16(2) of the Construction Industry Training Fund Act 1993 specifically provides for the Auditor-General to audit the accounts of the Board in respect of each financial year.
The audit program covered all major business cycles and was directed primarily towards obtaining sufficient evidence to enable an audit opinion to be formed with respect to the financial statements and internal control.
During 2001-02 specific areas of audit attention included:
levy collection, including compliance with legislative requirements
expenditure, including accounts payable, corporate credit card usage and salaries and wages
training expenditure, including the sufficiency of the procedures associated with the acquittal of funds paid.
An audit management letter outlining the scope and findings of the audit was forwarded to the Chief Executive Officer and a satisfactory response detailing the Board’s resolution of all matters raised has been received.
While the review of the specific areas of financial activity revealed a satisfactory standard of accounting, record keeping and control, a number of suggestions were made to strengthen the Board’s acquittal procedures for training claims particularly under the User Selected Funding mechanism.
In accordance with section 38 of the Construction Industry Training Fund Act 1993 the Minister must, as soon as practicable after 1 January 2003, appoint an independent person to carry out an investigation and review concerning the effectiveness of the Board and its attainment of the objectives of the Act. Audit will report on the outcome of the Minister’s review in subsequent reports.
The Board utilises a small network of personal computers. During the year the Board implemented a new Levy and Training Administration System for use in the processing and authorising of User Selected Funding training claims. The audit included a review of the control environment over this system and subsequent recommendations were made to enhance the control environment. The Board has advised that all recommendations are being actioned.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the Construction Industry Training Board included an assessment of the controls exercised in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities. The assessment also considered whether those controls were consistent with the prescribed elements of the Financial Management Framework as required by Treasurer’s Instruction 2 ‘Financial Management Policies’.
Audit formed the opinion that the controls exercised by the Construction Industry Training Board in relation to the receipt, expenditure and investment of money; the acquisition and disposal of property; and the incurring of liabilities, were sufficient to provide reasonable assurance that the financial transactions of the organisation were conducted properly and in accordance with law.
Income from industry levies was $8.1 million, an increase of $1.4 million. Levies from the housing sector of $4.2 million ($2.8 million) accounted for this increase. The increase in industry levies in the housing sector reflect the level of activity in this sector during 2001-02.
Housing Sector funds not utilised at 30 June 2002 accounted for 61.8 percent of the accumulated surplus of $5.3 million.