The Corporation was established on 1 March 1997 under the name MFP Industrial Premises Corporation. It was established as a subsidiary of the then Minister for State Development, pursuant to regulations under the Public Corporations Act 1993, to take over functions previously conducted by the South Australian Urban Projects Authority under the Industrial Premises Development Scheme and to carry out other functions conferred by the Minister.
The Scheme provides for the development of new factory and commercial properties and the management of established factories and commercial properties as part of the Government’s program for assisting industry. Under the Scheme various finance and accommodation tenure arrangements have been entered into with private sector entities for the provision of facilities designed to satisfy particular operating requirements and to secure their presence in South Australia.
On 24 December 1997, by amendment regulations, the name of the Corporation was changed to Industrial and Commercial Premises Corporation (ICPC) and the responsibility for the Corporation was transferred to the Minister for Government Enterprises.
The Corporation has a Board of Directors appointed by the Minister and is subject to the control and direction of the Minister. Staff and facilities required to conduct the affairs of the Corporation are provided by the Department for Administrative and Information Services. The Corporation has no staff of its own.
The Schedule to the Public Corporations Act 1993, requires subsidiaries of Public Corporations, established pursuant to section 24 of the Act, to keep proper accounts of their financial affairs and to prepare financial statements in respect of each year.
It further provides that the Auditor-General must audit the accounts and financial statements of the subsidiary.
The audit of the Corporation was undertaken in conjunction with the audit of the Department for Administrative and Information Services.
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 1999-2000 specific areas of audit attention included:
expenditure of monies with respect to new developments
borrowings and related interest expenses
raising and recovery of monies due with respect to established properties
administrative expenses charged to the Corporation.
The review of the abovementioned auditable areas of review revealed generally satisfactory results.
In relation to the important matter of management control of risks, the Corporation, with the assistance of consultants, established in the latter part of the year a business risk management framework. This has involved the completion of a risk profile of the organisation, covering the identification and assessment of risks and the development of proposed control strategies to manage these risks. The Corporation’s next step is to formulate a check list of risk management issues, in particular addressing the assets and liabilities of the Corporation, and to formalise the process for controlling and monitoring these risks on an on-going basis.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the Industrial and Commercial Premises Corporation 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.
Audit formed the opinion that the controls exercised by the Industrial and Commercial Premises Corporation 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 the law.
The Corporation recorded an operating profit before income tax of $316 000 compared to an operating profit of $572 000 in 1998-99.
The majority of land and building assets (Note 9 to the financial statements refers) are subject to guarantee arrangements by the Minister for Industry and Trade. The guarantees effectively provide that in the event of the Corporation selling the land and buildings the Minister will make up the difference between the proceeds from sale and the actual cost of construction of the assets.