AUDITOR-GENERAL’S DEPARTMENT

 

 

FUNCTIONAL RESPONSIBILITY AND STRUCTURE

 

Establishment and Functions

 

The Public Finance and Audit Act 1987 confers wide powers on the Auditor-General to examine any matters relating to the collection, receipt, issue or expenditure of public monies and to report on the efficiency and economy of public sector operations.  In addition, the Auditor-General has been appointed auditor of various statutory corporations and funds; has been appointed auditor of a number of companies associated with the operations of public sector agencies; has a discretionary right under the Education Act 1972 to inspect or audit the accounts of school councils; and is required by the South Australian Health Commission Act 1976 to audit the accounts of prescribed incorporated hospitals and health units and to approve the auditor of other incorporated hospitals and units.

 

The Act provides a mandate for the Auditor-General to conduct five different types of audits and reviews.  These are:

 

·                     Financial and compliance audit - subsection 31(1)

·                     Efficiency and economy audit - subsection 31(2)

·                     Review of the adequacy of controls exercised by auditee agencies - subsection 36(1)(a)(iii)

·                     Examination of the accounts of a publicly funded body - section 32

·                     Review of a summary of a confidential government contract - section 41A.

 

The Auditor-General’s Department was established to assist the Auditor-General in the discharge of his/her statutory audit mandate.

 

Structure

 

The structure of the Department is illustrated in the following organisation chart.

 

 

AUDIT MANDATE AND COVERAGE

 

Audit Authority

 

Under section 35(1) of the Public Finance and Audit Act 1987, the Governor, on the recommendation of the Treasurer, has appointed Edwards Marshall as auditor of the Auditor-General’s Department.

 

 

AUDIT FINDINGS AND COMMENTS

 

Audit Opinion

 

In Edwards Marshall’s opinion, the financial report presents fairly in accordance with Australian Accounting Standards, other mandatory professional reporting requirements in Australia, the Public Finance and Audit Act 1987 and the Treasurer’s Instructions promulgated under the Act, the financial position of the Auditor-General’s Department as at 30 June 2006, and its financial performance and its cash flows for the year then ended.

 

Audit Communications to Management

 

Edwards Marshall met with officers of the Department at the conclusion of the audit and advised there were no issues that needed to be reported in a management letter.

 

 

INTERPRETATION AND ANALYSIS OF FINANCIAL REPORT

 

Highlights of Financial Report

 

	2006	2005	Percentage
	$’million	$’million	Change
EXPENSES
Employment expenses	8.0	7.8	2.6
Other expenses	2.5	2.6	(3.8)
Total Operating Expenses	10.5	10.4	1.0
REVENUE FROM GOVERNMENT	10.6	10.2	3.9
Net Cash Flows from Operations	0.8	0.6	33.3
Total Assets	3.2	2.6	23.1
Total Liabilities	3.1	2.7	14.8

 

Income Statement

 

Expenses

 

The main expense items for the four years to 2006 are shown in the following chart.

 

 

Balance Sheet

 

Assets and liabilities for the four years to 2006 are shown in the following chart.

 

 

The chart shows that current assets have steadily increased.  This is due to an accumulation of cash held in the Department’s Operating Account and in a Special Deposit Account in the name of the Auditor-General’s Department at the Department of Treasury and Finance titled ‘Accrual Appropriation Excess Funds’.  The increase in cash arises from funding provided annually to meet the accrued cost of accumulated employee leave entitlements.