SOUTH AUSTRALIAN TOURISM COMMISSION
FUNCTIONAL RESPONSIBILITY AND STRUCTURE
Establishment
The
Commission, a body corporate, is established pursuant to the South Australian Tourism Commission Act 1993.
Functions
The
functions of the SA Tourism Commission are as follows:
·
Increase
visitor numbers to and within the State by creating awareness of South
Australia and its tourism assets in key target markets.
·
Facilitate
the development of a competitive and profitable tourism industry.
·
Contribute
to the preparation and implementation of economic development relating to the
tourism industry of the State.
·
Build
strong networks and partnerships with relevant stakeholders for mutual benefit.
·
Assist
regional bodies engaged in tourism promotion.
Structure
The
structure of the SA Tourism Commission 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 23(3) of the South Australian Tourism Commission Act 1993 provides for the
Auditor-General to audit the accounts of the Commission 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 SA Tourism Commission 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.
During
2005-06, specific areas of audit attention included:
·
participation
fees and other revenue
·
event
operations and other expenditure
·
contract
management
·
accounts
payable
·
payroll
·
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 SA Tourism Commission
as at 30 June 2006 and the results of its operations and cash flows for the
year then ended.
Assessment of
Controls
In my
opinion, the controls exercised by the South Australian Tourism Commission in
relation to the receipt, expenditure and investment of money, the acquisition
and disposal of property and the incurring of liabilities, except for the
matter of payroll as outlined under ‘Audit Communications with Management’, are sufficient to provide reasonable
assurance that the financial transactions of the South Australian Tourism
Commission 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 and related responses are considered herein.
Payroll
The audit disclosed that a large number of bona fide reports:
· had not been reviewed to ensure the integrity of the reports;
· had not been retained as evidence of any review that had been performed.
The review of the leave taken reports is undertaken to ensure that all leave is correctly recorded. It was noted that this review process is not effective and therefore does not provide assurance as to the accuracy of the leave liability.
The Commission advised that managers have been advised of the requirements to review and retain all bona fide and leave reports.
Overseas Travel
Employees of the SA Tourism Commission travel overseas on a frequent basis for business purposes. Government requirements, as set out in the Commissioner’s Standard, include the documentation of a number of aspects including specific outcomes to be achieved, whether the outcomes can be achieved in other ways and reporting the value of the trip against identified outcomes.
There was no evidence that the documentation of overseas travel met all the requirements of the Commissioner’s Standard.
The Commission has advised that it will ensure that all the requirements are met in the future.
INTERPRETATION AND ANALYSIS OF FINANCIAL REPORT
Highlights of Financial Report
|
|
2006 |
2005 |
Percentage |
|
|
$’million |
$’million |
Change |
|
INCOME |
|
|
|
|
Revenue from Government |
46.6 |
44.6 |
4 |
|
Other |
7.9 |
8.4 |
(6) |
|
Total Income |
54.5 |
53.0 |
3 |
|
|
|
|
|
|
EXPENSES |
|
|
|
|
Employee benefits |
12.9 |
11.7 |
10 |
|
Advertising and promotion |
18.0 |
16.5 |
9 |
|
Industry assistance |
9.7 |
10.2 |
(5) |
|
Other |
15.2 |
14.3 |
6 |
|
Total Expenses |
55.8 |
52.7 |
6 |
|
Net Result |
(1.3) |
0.3 |
n/a |
|
|
|
|
|
|
Net Cash Flows from
Operations |
3 |
(0.3) |
n/a |
|
|
|
|
|
|
ASSETS |
|
|
|
|
Current assets |
6.6 |
5.2 |
27 |
|
Non-current assets |
2.2 |
4.1 |
(46) |
|
Total Assets |
8.8 |
9.3 |
(5) |
|
LIABILITIES |
|
|
|
|
Current liabilities |
5.3 |
4.2 |
26 |
|
Non-current liabilities |
1.3 |
1.5 |
(13) |
|
Total Liabilities |
6.6 |
5.7 |
16 |
|
EQUITY |
2.2 |
3.6 |
n/a |
Income Statement
Income
A
structural analysis of income for the Commission in the four years to 2006 is
presented in the following chart.
Income for
the year totalled $54.5 million ($53 million).
This includes revenue appropriated from Government for operating
purposes which totalled $46.6 million ($44.6 million) and represents 85.5 percent
(84.1 percent) of total income. The
Commission is dependent on the ongoing financial support of the State
Government as expressed in Note 1 to the Financial Statements.
Other income
predominantly consists of participation fees, event entry fees and
refunds/recoups of salaries and expenses.
Expenses
For the
four years to 2006, a structural analysis of the main expense items for the
Commission is shown in the following chart.
The increase in expenditure is mainly the result of increases in employee benefits, advertising and promotion costs, bad and doubtful debts as a result of the Le Mans settlement, and a reduction in expenditure on event operations.
Costs relating to the Enterprise Bargaining Agreement and targeted voluntary separation packages and a reallocation of costing for some overseas employees contributed to the increased costs of employee benefits.
The increased costs of advertising and promotion were due mainly to the hosting of the Australian Tourism Exchange and an increased number of Trade Shows.
The reduction in expenditure on event operations is mainly attributable to the biennial cycle of several major events eg the Cattle Drive was not held in 2005-06.
Operating Result
The
operating deficit was $1.3 million ($325 000 surplus). The deficit for 2005-06 is the result of the
Le Mans settlement (refer Note 32).
The following
chart shows the income, expenses and surpluses/deficits for the four years to
2006.
The level of surpluses/deficits over the
period reflects the fact that the initial government funding is related to the
estimated expenses less income generated by the Commission.
Balance Sheet
For the
four years to 2006, a structural analysis of assets and liabilities is shown in
the following chart.
Cash Flow Statement
The
following table summarises the net cash flows for the four years to 2006.
|
|
2006 |
2005 |
2004 |
2003 |
|
|
$’million |
$’million |
$’million |
$’million |
|
Net Cash Flows |
|
|
|
|
|
Operations |
3.0 |
(0.3) |
(2.3) |
0.7 |
|
Investing |
(0.4) |
(0.5) |
(0.2) |
(0.5) |
|
Financing |
(0.1) |
(0.1) |
(0.1) |
(0.1) |
|
Change in Cash |
2.5 |
(0.9) |
(2.6) |
0.1 |
|
Cash at 30 June |
5.1 |
2.7 |
3.6 |
6.2 |