The South Australian Office of Financial Supervision (SAOFS) was established under the South Australian Office of Financial Supervision Act 1992. The principal role of SAOFS was the enforcement of compliance by building societies, credit unions and friendly societies with the provisions of the Financial Institutions Code, the Friendly Societies Code and the Prudential Standards promulgated by the Australian Financial Institutions Commission.
In June 1999, the Financial Sector Reform (South Australia) Act 1999 came into operation and amongst other matters amended the South Australian Office of Financial Supervision Act 1992 to provide for the wind up of SAOFS. The Financial Sector Reform (South Australia) Act 1999 also dealt with the wind up of SAOFS’s Supervision Fund.
In addition, a transfer agreement between the Treasurer of the Commonwealth of Australia and the Attorney-General of South Australia came into effect on 1 July 1999, the transfer date. The transfer agreement dealt with the transfer of assets, liabilities and staff from SAOFS to the Australian Prudential Regulation Authority or the Australian Securities and Investments Commission on the transfer date.
The Supervision Fund was wound up on the 29 February 2000 and by proclamation, the Governor fixed 1 June 2000 as the day on which the South Australian Office of Financial Supervision Act 1992 expired.
Further comments on the wind up of SAOFS’s Supervision Fund are provided in Note 3 to the financial statements.
Subsection 45(2) of the South Australian Office of Financial Supervision Act 1992 required the Auditor-General to audit the accounts of SAOFS for the period 1 July 1999 to 29 February 2000.
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 the period 1 July 1999 to 29 February 2000, specific areas of audit attention included the payment of accounts, payments to Board Members and the wind up of the Supervision Fund.
There were no matters that required written communication to SAOFS management.
The overall internal control structure of SAOFS was assessed as satisfactory.
As required by subsection 36(1)(a)(iii) of the Public Finance and Audit Act 1987, the audit of the South Australian Office of Financial Supervision 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 South Australian Office of Financial Supervision 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.
In accordance with section 21 of the Financial Sector Reform (South Australia) Act 1999 the Supervision Fund was wound up on the 29 February 2000. As a result $152 000, being the balance of the Fund, was distributed to institutions in a manner approved by the Minister.