The Authority was established in October 1998 as a statutory corporation under the Housing and Urban Development (Administrative Arrangements) Act 1995.
The functions of the Authority, as provided by the establishing regulations include:
liasing with other agencies providing assistance to Aboriginal people to achieve a coordinated response;
to receive and allocate resources for Aboriginal housing programs.
The Authority is established with a Board of Management comprising members and deputy members. All members and their deputies must be Aboriginal people and are appointed by the Governor with five members, including the presiding member, nominated by the Minister and four nominated by the Aboriginal and Torres Strait Islander Commission.
The staff of the Authority are employees of the Department of Human Services assigned to work for the Authority. The Department and the South Australian Housing Trust (the Trust) provide management, accounting and systems services to the Authority. The Authority uses the Trust’s systems to record and account for assets, raise and follow up rents and other charges, to manage the maintenance of properties and to control costs associated with properties.
In February 2000 control of Aboriginal rental housing and other housing programs for Aboriginal people housing was transferred to the Authority. The transfer involved reassignment of staff from the Trust to the Authority and the transfer of rental housing and other properties, along with associated assets, rights, liabilities and obligations from the Trust to the Authority.
The transfer of Trust rental housing was effected pursuant to a regulation issued under subsection 23(1)(b)(ii) of the South Australian Housing Trust Act 1995.
Note 17 to the Authority’s financial statements provides further details of the transfer.
The Operating Surplus of $136.4 million comprised $5.3 million attributable to the Operations of the Authority and $131.1 million Net Revenue on restructure due to the transfer of Aboriginal Housing Programs from the Trust to the Authority.
Section 28 of the Housing and Urban Development (Administrative Arrangements) Act 1995 requires statutory corporations established pursuant to the Act to keep proper accounting records and to prepare annual statements of accounts for each financial year. The Act also empowers the Auditor-General to audit the accounts of the Authority and its annual statement of accounts.
The audit of the Authority encompassed all significant areas of its operations including:
accounting for the transfer of assets, rights, liabilities and obligations of the Trust to the Authority
raising and recovery of rent and other tenant charges
control and management of maintenance of Authority properties and of other property related expenses
capital expenditure by the Authority
sale of Authority properties
administrative expenses.
The audit of transactions and balances which are processed and controlled through the Trust’s systems placed appropriate reliance on the audit procedures performed as part of the audit of the Trust.
A management letter was provided to the General Manager of the Authority in August 2000 which detailed audit findings and recommendations for improvement to the Authority’s procedures and controls. The matters incorporated in the letter included:
Recommendation that the Service Level Agreements with the Trust and the Department of Human Services be finalised and authorised on a timely basis.
Recommendations for improvement in processing the transfer of houses from the Trust to the Authority.
Noting that the Authority was required to implement an internal audit function by the Housing and Urban Development (Administrative Arrangements) Act 1995 and that this had not occurred to date.
As the management letter was only forwarded to the Authority in the latter part of August, Audit was awaiting a response at the time of completion of this Report.
Commentary on General Financial Controls
The audit review of the Authority’s control environment has recognised the short time between the establishment of the Authority in 1998 and the impact of the changes associated with the transfer of staff and housing assets to it in February 2000. Responding to these events has placed several demands upon the members of the Authority, its senior management and other staff.
A number of factors have reduced the impact of these demands on the development of the Authority’s control environment. While the Authority is newly established the transferred functions were previously undertaken by the South Australian Housing Trust’s Aboriginal Housing Unit and there was continuity of staffing, work practices and systems. Further, the Authority’s continued use of information management systems and records developed and operated by the South Australian Housing Trust has not only provided operating and systems support efficiencies but also relevant control assurance.
The Authority has still to develop and implement important control arrangements including an internal audit function, an audit committee and documented policies and procedures specifically relevant to its operations. These matters have been raised by Audit with Authority management and it is understood these will be pursued in the 2000-01 financial year.
Section 11 of the Housing and Urban Development (Administrative Arrangement) Act 1995 provides that members of the Authority are entitled to remuneration and benefits as determined by the Governor. Review of the Chairperson’s remuneration established that while the remuneration arrangements were approved by the Minister for Human Services they had not been determined by the Governor. This matter has been communicated to the Chief Executive of the Department of Human Services recommending that approval be obtained by the Governor through Executive Council. It has been further suggested that the Crown Solicitor’s advice be sought in drafting the instrument to obtain that approval.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the Aboriginal Housing Authority 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 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 Aboriginal Housing Authority in relation to the receipt, expenditure and investment of money; the acquisition and disposal of property; and the incurring of liabilities, except for the matters outlined under ‘Audit Findings and Comments’, were sufficient to provide reasonable assurance that the financial transactions of the organisation were conducted properly and in accordance with the law.