The Industrial and Commercial Premises Corporation (the Corporation) is established as a subsidiary of the Minister for Government Enterprises, pursuant to regulations under the Public Corporations Act 1993 (the Act).
The Corporation is involved in the development of new factory and commercial properties and the management of established factories and commercial properties as part of the Government’s program for assisting industry. Various finance and accommodation tenure arrangements have been entered into with private sector entities for the provision of facilities designed to satisfy particular operating requirements and to secure their presence in South Australia. The Corporation operates in close collaboration with the Department of Industry and Trade.
The Corporation has a Board of Directors appointed by the Minister and is subject to the control and direction of the Minister. Staff and facilities required to conduct the affairs of the Corporation are provided by the Department for Administrative and Information Services. The Corporation has no staff of its own.
The Schedule to the Act requires subsidiaries of Public Corporations, established pursuant to section 24 of the Act, to keep proper accounts of their financial affairs and to prepare financial statements in respect of each year.
It further provides that the Auditor-General must audit the accounts and financial statements of the subsidiary.
The audit of the Corporation was undertaken in conjunction with the audit of the Department for Administrative and Information Services.
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:
review of construction in progress project developments
expenditure of monies with respect to new developments
borrowings and related interest expenses
raising and recovery of monies due with respect to established properties
administrative expenses charged to the Corporation.
An audit management letter conveying the scope of the audit and related findings was forwarded to the Chairman of the Corporation.
The review of the abovementioned auditable areas revealed generally satisfactory results. Audit recommended improvement in the reconciliation process covering borrowings.
In the latter part of the year, the Corporation reviewed internally, aspects of their procurement process as it relates to project manager and contractor/consultant appointments for Corporation initiated projects. The review outcome has been presented to the Board and is presently under consideration. Any change in policy and/or process will be subject to review during the 2002-03 audit.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the Industrial and Commercial Premises Corporation 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.
Audit formed the opinion that the controls exercised by the Industrial and Commercial Premises Corporation 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.
The Corporation recorded a profit from ordinary activities before income tax of $688 000 compared to a profit of $2.8 million in 2000-01. The difference was due to the recognition as revenue in 2000-01 of a revaluation increment of $2.6 million in relation to land and buildings (Note 9(c) to the financial statements refers).
Construction Projects in Progress increased by $19 million to $19.8 million. This increase reflects the substantial increase in construction activity during the year.
During 2001-02, the Corporation received deposits from clients representing part payments towards the actual cost of project construction work. These deposits have been brought to account against the asset Construction Projects in Progress.