SOUTH AUSTRALIAN STATE EMERGENCY SERVICE

 

 

FUNCTIONAL RESPONSIBILITY AND STRUCTURE

 

Establishment

 

The South Australian State Emergency Service (SASES) was established as a Body Corporate under the Fire and Emergency Services Act 2005 (the Act) on 1 October 2005.  Prior to the enactment of this legislation the State Emergency Service was in operation as an operating unit within the Emergency Services Administrative Unit (ESAU).  The Act provided for the State Emergency Service to continue in operation as the SASES.  Upon dissolution of ESAU the assets and liabilities in relation to the operation of the former State Emergency Service were transferred to the SASES.

 

The Act also established the South Australian Fire and Emergency Services Commission (SAFECOM).  SAFECOM, in performing its functions, may give directions to the SASES except in matters relating to the handling of emergency situations.

 

Functions

 

The functions of the SASES are as follows:

 

·                     To assist the Commissioner of Police in dealing with any emergency.

·                     To assist the State Co-ordinator, in accordance with the State Emergency Management Plan,  in carrying out prevention, preparedness, response or recovery operations under the Emergency Management Act 2004.

·                     To assist the South Australian Metropolitan Fire Service and the South Australian Country Fire Service in dealing with any emergency.

·                     To deal with any emergency:

·                      where the emergency is caused by flood or storm damage; or

·                      where there is no other body or person with lawful authority to assume control of operations for dealing with the emergency.

·                     To deal with any emergency until such time as any other body or person that has lawful authority to assume control of operations for dealing with the emergency has assumed control.

·                     To respond to emergency calls and, where appropriate, provide assistance in any situation of need whether or not the situation constitutes an emergency.

·                     To undertake rescues.

 

Structure

 

The Chief Officer of SASES is responsible for the management, administration and operations of the SASES and is also a board member of SAFECOM.

 

SAFECOM provides various services in support of SASES’s primary functions, including strategic risk management, financial management and accounting services.

 

SASES’s financial management is heavily reliant on information and reporting provided by SAFECOM.

 

The operations of SASES are financed by the Community Emergency Services Fund, established by the Emergency Services Funding Act 1998.

 

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

 

 

AUDIT MANDATE AND COVERAGE

 

Audit Authority

 

Audit of the Financial Report

 

Subsection 31(1)(b) of the Public Finance and Audit Act 1987 and subsection 120(2) of the Fire and Emergency Services Act 2005 provide for the Auditor-General to audit the accounts of the South Australian State Emergency Service for each financial year.

 

Assessment of Controls

 

Subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987 provides for the Auditor-General to assess the controls exercised by the South Australian State Emergency Service in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities.

 

This assessment also considers whether those controls are consistent with the prescribed elements of the Financial Management Framework as required by Treasurer’s Instruction 2 Financial Management Policies.

 

Scope of Audit

 

The audit program covered major financial systems and was directed primarily to obtaining sufficient evidence to enable an audit opinion to be formed with respect to the financial statements and internal controls.

 

The audit of SASES during 2005-06 required Audit to direct much of its focus to the audit of the ‘centralised accounting’ structure maintained by SAFECOM and to test transactions at this level.

 

During 2005-06, specific areas of audit attention included:

 

·                     expenditure, including procurement of supplies and services, accounts payable and salaries and wages

·                     plant and equipment, including the adequacy of  asset register maintenance

·                     revenue, debtors, receipting and banking

·                     general ledger.

 

AUDIT FINDINGS AND COMMENTS

 

Audit Opinions

 

Audit of the Financial Report

 

In my opinion, the financial report presents fairly, in accordance with the Treasurer’s Instructions promulgated under the provisions of the Public Finance and Audit Act 1987, applicable Accounting Standards and other mandatory professional reporting requirements in Australia, the financial position of the South Australian State Emergency Service as at 30 June 2006 and the results of its operations and cash flows for the period then ended.

Assessment of Controls

 

In my opinion, the controls exercised by the South Australian State Emergency Service in relation to the receipt, expenditure and investment of money, the acquisition and disposal of property and the incurring of liabilities are sufficient to provide reasonable assurance that the financial transactions of the South Australian State Emergency Service have been conducted properly and in accordance with law.

 

Audit Communications with Management

 

Matters arising during the course of the audit were detailed in a management letter to the Chief Executive Officer.  The response to the management letter was considered to be satisfactory.  Major matters raised with SASES and the related responses are considered herein.

 

Risk Management

 

Review of processes in relation to risk management indicated that there was room for improvement in relation to the monitoring of the risk management plan and reporting of achievements against the plan.

 

In response SASES indicated that action would be taken to facilitate improvements in the areas noted.

 

Expenditure

 

The audit of the expenditure function highlighted the need for formalisation of arrangements between SASES and certain organisations which provided services to it and also the need for improvement in documentation provided to support payments made.

 

SASES indicated that action would be taken to address the issues raised.

 

 

INTERPRETATION AND ANALYSIS OF FINANCIAL REPORT

 

Highlights of Financial Report

	* 2006
	$’million
EXPENSES
Employee benefits costs	2
Supplies and services	5
Other expenses	2
Total Expenses	9
INCOME
Other income	1
Total Income	1
Net Cost of Providing Services	8
REVENUES FROM SA GOVERNMENT
Contributions from Community Emergency Services Fund	8
Net Result before Restructure	-
Net revenue from administrative restructure	16
Net Result after Restructure	16
Cash Generated from Operations	2
ASSETS
Current assets	2
Non-current assets	18
Total Assets	20
LIABILITIES
Current liabilities	2
Non-current liabilities	1
Total Liabilities	3
EQUITY	17

 

*          The SASES commenced operations from 1 October 2005.  The figures shown represent transactions for the nine month period to 30 June 2006.

Income Statement

 

The main source of income for the SASES is the contribution from the Community Emergency Services Fund which accounts for 91 percent of total income. 

 

As part of the restructuring of the emergency services sector, assets and liabilities were transferred from the former Emergency Services Administrative Unit to SASES.  The net revenue from this transfer totalled $16 million (refer to Note 19 to the financial statements).

 

Balance Sheet

 

The Balance Sheet is dominated by the non-current asset property, plant and equipment which totalled $18.3 million.  The written-down value of the main asset classes held by the SASES were land and buildings ($6.1 million) and vehicles ($7.4 million).