The Passenger Transport Board (the Board) is a body corporate established under the Passenger Transport Act 1994 (the Act).
The functions of the Board, as set out by subsection 20(1) of the Act, include:
overseeing the creation and maintenance of an integrated network of passenger transport services involving all modes of passenger transport by public passenger vehicles within the State;
determining, monitoring and reviewing passenger transport services and fares payable by members of the public;
accrediting operators of passenger transport services and the drivers of these vehicles; administering a system of fare subsidies and concessions in appropriate cases;
establishing and maintaining facilities and various forms of infrastructure for the purposes of the passenger transport network;
facilitating the use of passenger transport services by people with disabilities;
establishing, auditing and, if necessary, enforcing safety, service, equipment and comfort standards for passenger transport within the State.
Subsection 20(2) of the Act specifies that the Board itself must not operate a passenger transport service.
The Act requires the Board to establish two committees:
the Passenger Transport Industry Committee to provide an industry forum to assist the Board as appropriate in the performance of its functions;
the Passenger Transport User Committee to provide advice to the Board on matters of general relevance or importance to the users of passenger transport services.
The Board has also chosen to establish other committees and panels which include the Passenger Transport Standards Committee, the Taxi Industry Advisory Panel, the Bus Industry Advisory Panel and the Accessible Transport Advisory Panel. These committees and panels form part of the organisational structure and report to the Board.
The organisational structure of the Passenger Transport Board is:
The deficit from ordinary activities was $9.4 million ($461 000 surplus).
Revenues from the Government were $161 million, the same as last year. The Government also made an equity contribution of $5.8 million.
The Board paid $209 million ($197 million) to service contractors in relation to the operation of metropolitan bus, train and tram services.
Metropolitan public transport ticket sales revenue amounted to $49 million ($45 million).
Subsection 18(3) of the Passenger Transport Act 1994 specifically provides for the Auditor-General to audit the accounts and the annual statements of account of the Board.
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 the following financial activities of the Board were the subject of Audit attention:
administration of bus, train and tram service contracts including contract payments
metropolitan public transport ticketing
expenditure, including accounts payable and salaries and wages
revenue, receipting and banking
budgetary control and management reporting
Research and Development Fund.
A management letter communicating the issues arising from the audit was forwarded to the Executive Director of the Board. Satisfactory responses have been received in relation to the matters raised.
An assessment of the Board’s internal control structure identified that internal controls were adequate although there was room for improvement in certain areas of operation.
The main issues identified by Audit relate to:
On-time running data is used by the Board as a renewal and termination performance benchmark in accordance with the Contracts for the provision of transport services. In addition, the self reported on-time running data provided by the contractors is used by the Board to determine adjustments to payments to contractors.
With respect to early running, to satisfy both the renewal and termination performance benchmark, the Contracts require that less than two percent of services run early. With respect to late running, the Contracts require that less than two percent of services run late to satisfy the renewal benchmark and less than five percent to satisfy the termination benchmark.
On-time running is monitored by the Board in two ways:
Quarterly Service Quality Audits undertaken by the Board;
self reported data provided by the contractors on a monthly basis.
On-time running is determined as follows:
Early running is deemed to be one minute before the scheduled departure time.
Late running is deemed to be five minutes after the scheduled arrival time.
Audit undertook a comparative analysis of the results of the Service Quality Audits undertaken by the Board against the data reported by the contractors in relation to on-time running for all bus contracts for August and November 2001. The analysis identified significant discrepancies between the audit results and the self reported data.
With respect to ‘early running’, the Service Quality Audits identified that across the seven contracts, between three percent to as high as 23 percent of buses were departing more than one minute before the scheduled departure time. The self reported data provided by the contractors reported that between 0 percent and 0.02 percent of buses were running early.
With respect to ‘late running’, the Service Quality Audits identified that between three percent to 12 percent of buses were arriving more than five minutes after the scheduled arrival time. The self reported data provided by the contractors reported that between 0 percent and 0.9 percent of buses were running late.
Audit suggested that the Board collaborate with the contractors to determine the reasons for and validity of the significant variations between the audit results and the self reported data.
In its response, the Board advised that discussions have commenced with the contractors regarding on-time running and that contractors will be required to respond to the issues raised by the Service Quality Audits as part of their monthly reporting to the Board.
Audit commented that the Board needs to establish a mechanism which will not only ensure that all issues arising from the audits are reported to the contractors but are adequately followed up to resolve the issue or minimise the likelihood of its re-occurrence.
The Board responded that a process has been put in place to ensure that the contractors receive all Service Quality Reports raised from the audits.
A key performance benchmark of the contracts is that an independent Customer Satisfaction Survey is undertaken on an annual basis. Such a survey was not undertaken in 2001-2002.
Audit considered that this survey would, given that services provided by the Board have changed since the last survey, assist management in assessing customer satisfaction and enable PTB to assess the contractor performance against the performance benchmark.
The Board advised that the Customer Satisfaction Survey will be undertaken in March 2003.
Audit identified some issues in relation to the Service Level Agreement between the Board and Transport SA.
The current Service Level Agreement between the Board and Transport SA contains key performance indicators based on the quantity and total amount of transactions performed by Transport SA. Given that a new agreement is due to be negotiated, Audit suggested that the Board consider incorporating key performance indicators in the Service Level Agreement which also measure the accuracy and timeliness of transactions processed by the service provider.
The Board advised that consideration will be given to the issues raised by Audit before the new agreement is finalised.
With respect to the operation of other financial systems, Audit commented that there was room for improvement in the following areas:
Controls over the issue and destruction of replacement tickets to the Licensed Ticket Vendors.
Regular review of the supplier master file for ongoing pertinence.
Clearing of outstanding items on the bank reconciliation in a timely manner.
With respect to the review of the supplier master file and the clearing of outstanding items on the bank reconciliation, the Board has advised that action has been taken to address these issues.
During the year, the Board paid $375 000 from the Fund to the Adelaide Festival Corporation (AFC) for the 2002 Adelaide Festival.
While similar amounts have been paid from the Fund for previous Festivals (a total of $1.1 million has been paid to the AFC for the 1998, 2000 and 2002 Adelaide Festival), Audit understands that the funds provided for the 2002 Festival were not used for all the purposes outlined by the AFC in the ‘Application for Grant’.
Audit commented on the need for the Board to ensure that the AFC, in accordance with the project management processes outlined in the ‘Grant Submission’, provide the Board with a report and acquittal of the use of the funds so as to ensure that the agreed conditions of the Grant Submission are satisfied.
The Board has advised that the AFC has provided a detailed report detailing the promotional material produced in respect of public transport during the 2002 Festival and that it is satisfied that the AFC has satisfied the acquittal requirements of the Research and Development Fund.
CONTROLS OPINION
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the Passenger Transport 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 in operation 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 Passenger Transport 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.
The operating result for the year was a deficit of $9.4 million as compared with a surplus of $461 000 the previous year. This was in line with the approved budget and represented a planned reduction in the Board’s cash balance. Refer Note 12.
Expenses from Ordinary Activities increased by $14.4 million. This increase is mainly attributable to an increase in:
payments to service contractors of $11.6 million to $208.6 million. This increase is as a result of additional services introduced during the year. Refer Note 4. Payments to service contractors represent 82 percent (82 percent) of total expenses incurred by the Board in 2001-02;
the infrastructure, administration and service costs of $4.5 million, of which $4.3 million relates to infrastructure costs. Refer Note 6.
The Board is primarily funded from Parliamentary appropriations, however, it also receives significant monies in relation to metropolitan public transport ticket sales and concession ticket subsidies.
Revenues from Government decreased by $300 000 to $161.2 million. Revenues from Ordinary Activities increased by $4.9 million to $84.3 million, of which $3.9 million relates to an increase in revenue from public transport ticket sales.
The following graph shows the major categories of revenue as a percentage of total revenue of the Board.
Passenger Transport Board Revenues
The following table shows the extent to which the fares charged to passengers in the metropolitan area covers the outlays by the Board to Metropolitan Service Contractors.
|
2002 |
2001 |
|||
|
$’000 |
$’000 |
|||
|
MetroTicket sales |
48 870 |
44 968 |
||
|
Payments to Metropolitan Service Contractors |
208 619 |
197 042 |
||
|
2002 |
2001 |
|||
|
Percent |
Percent |
|||
|
MetroTicket sales as a percentage of payments to Metropolitan Service Contractors |
23.4 |
22.8 |
||
The written down value of property, plant and equipment increased by $3.2 million to $11.7 million.
The Board received an appropriation for Equity Contribution of $5.8 million. The amount received has been shown as equity in the Statement of Financial Position in accordance with the requirements of Treasurer’s Instruction 3 ‘Appropriation’.
Note 29(a) to the Financial Statements details the purpose and administration of the Fund and transactions for the year. The balance of the Fund at 30 June was $1 383 000 ($1 982 000).
The Access Cabs System is a transport (taxi) service for people with disabilities.
An external review of the Access Cabs System was undertaken during the year to determine whether the system was delivering the outcomes needed by customers.
The review identified a number of issues relating to:
performance expectations of the system;
the Board’s role as a regulator of the system;
the role of Yellow Cabs as operator of the Access Cabs Central Booking System;
customer assessment of performance of the system.
The review resulted in a number of recommendations, the majority of which have been accepted by the Board.
The Board has commenced addressing the issues raised by the review. Audit will continue to monitor the action taken by the Board in addressing the issues raised in this review during 2002-03.