The Emergency Services Administrative Unit (ESAU) is an Administrative Unit established pursuant to subsection7(2) of the Public Sector Management Act 1995. Its primary objectives are:
to provide strategic, corporate and support services to the South Australian emergency services, namely the South Australian Metropolitan Fire Service (SAMFS), the Country Fire Service (CFS) and the State Emergency Service (SES);
through the SES, to provide a local incident emergency response service, and significant participation in State Disaster emergency management, planning and training.
The organisation structure and funding arrangements are overviewed in the following diagram:
Responsibility for the administration of the Office of Volunteers was transferred on 1 December 2001 from the Department of Environment and Heritage to ESAU.
The funding of ESAU is derived through recharges to the SAMFS and the CFS for services rendered. The Community Emergency Services Fund (the Fund), established by the Emergency Services Funding Act 1998, provides funding direct to those organisations.
The SES is directly financed by the Fund for the cost of its operational services in the protection of South Australian citizens and their property. The SES also receives funding from the same source for the cost of strategic and administrative services delivered to it by ESAU.
The strategic and administrative services delivered by ESAU include financial, human resources, asset management and procurement, risk management, volunteer management, occupational health, safety and prevention and strategic and knowledge management services. These deliverables are funded by the CFS and the SAMFS under Service Level Agreements.
Contributions from the Community Emergency Services Fund totalled $10 million ($9.6 million).
Recharges to emergency service agencies totalled $8.6 million ($8.3 million).
Assets with a written down value of $652 000 ($1.4 million) were transferred from local government to ESAU.
Subsection 31(1)(b) of the Public Finance and Audit Act 1987 provides for the Auditor-General to audit the accounts of the Emergency Services Administrative Unit in respect of each financial year.
The audit program covered all major financial systems 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:
expenditure, including accounts payable and salaries and wages
plant and equipment, including the adequacy of asset register maintenance
revenue, debtors, receipting and banking
service level agreements
general ledger.
During the year several letters communicating issues arising from the audit were forwarded to the Chief Executive Officer. Satisfactory responses have been received in relation to the matters raised.
In previous years Audit has commented on the need for considerable improvement in the internal control environment operating in ESAU. Over the last two years significant improvement has been achieved. Notwithstanding, Audit considers that opportunities remain for improvement in internal controls in a number of areas. These are outlined below.
The audit of the payroll function revealed that improvements could be achieved with regard to the documentation of policies and procedures, the administration of flexitime arrangements and the independent review of payroll processes.
In response ESAU indicated that a comprehensive review of the payroll function will be undertaken in conjunction with the implementation of the CHRIS payroll system early in the 2002-03 financial year.
The audit revealed that there was room for improvement in cash receipting procedures, authorisation of credit notes and accountability for invoices raised.
In response ESAU advised that revised procedures would be implemented to address the issues raised by Audit.
The audit of the accounts payable function revealed that there was room for improvement in the timely performance of bank reconciliations, the reconciliation between the accounts payable subsidiary system and the general ledger and the timely payment of accounts.
Regarding the purchasing function the results of the audit revealed that policies and procedures were not always adhered to and adequate documentation to support purchases from locally held funds was not always provided.
ESAU advised that reconciliations of bank accounts and the general ledger and subsidiary systems would be undertaken on a timely basis and that procedures would be improved to ensure the timely payment of accounts.
In relation to the purchasing function ESAU indicated that staff would be reminded of the need to adhere to procedures and to provide adequate documentation in support of purchases from locally held funds.
The audit of the use of credit cards revealed the need for improvements in the processes for issuing and terminating credit cards. Also the approval of credit card statements and the provision of adequate supporting documentation were matters commented on by Audit.
Further, Audit commented that procedures for processing credit card payments could be improved by the use of a clearing account.
In response ESAU advised that revised procedures would be implemented for issuing and terminating credit cards and that staff would be reminded of the need to appropriately authorise and support purchases made.
Regarding the processing of credit card payments, ESAU advised that a clearing account has been established.
Audit identified the need for improvement in the monitoring of strategic, business and risk plans, the provision of clear guidelines regarding the budget process, the timely finalisation of various Service Level Agreements with the Emergency Service agencies and the implementation of regular monitoring of those agreements. The establishment of a central contracts register for control and information purposes was also recommended by Audit.
In response ESAU indicated that action has been taken to ensure adequate monitoring of plans at all levels and the timely finalisation of Service Level Agreements. ESAU also advised that a contract register is being established.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the Emergency Services Administrative Unit 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 Emergency Services Administrative Unit in relation to the receipt, expenditure and investment of money; the acquisition and disposal of property; and the incurring of liabilities, except for the matters outlined under 'Audit Findings and Comments', were sufficient to provide reasonable assurance that the financial transactions of the organisation were conducted properly and in accordance with law.
The written down value of property, plant and equipment increased by $1.5 million to $8.7 million due mainly to the transfer of assets from local government with a written down value of $652 000 and additions to assets totalling $1.6 million, offset by depreciation expense of $760 000.
The majority of assets held by ESAU relate to the operations of the State Emergency Service with the major components being vehicles with a written down value of $4.5 million and communications equipment with a written down value of $1.7 million.