Report 14 of 2020 (Published 13 October 2020)

Report on the Operations of the Auditor-General's Department for the year ended 30 June 2020

This Annual Report provides information on the Auditor-General’s Department’s activities and performance in 2019-20.

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Report 13 of 2020 (Published on 13 October 2020)

Annual Report of the Auditor-General for the year ended 30 June 2020

This Report has three parts:

Part A – Executive summary contains the opinions the Auditor-General is required to give under section 36 of the Public FInance and Audit Act 1987.  It summarises the main matters from our annual audits of public sector agencies.  This includes significant financial outcomes, events and control matters communicated to agencies and small-scale specific reviews.  Part A also identifies any examinations we have conducted under section 32 of the Act.

Part B – Controls opinion explains the Auditor-General's controls opinion responsibilities and our approach to issuing this year's opinion.  It also comments on any significant control matters we identified in conducting our controls opinion audit program. 

Part C – Agency audit reports summarises the outcomes of the audits of the agencies included in the Annual Report.  This includes a snapshot of each agency's key financial information and whether the financial statement opinion is modified or unmodified.  There is also commentary on any significant issues of administration, financial management and controls.  The financial statements of the agencies included in this report are published on this website (see link below). 

Financial statements for the agencies we audit that are not included in this report will be published on this website progessively, as soon as reasonably practicable after we complete each audit.

Report 12 of 2020 (Published on 8 September 2020)

Information and communications technology reviews

Each year the Auditor-General reviews SA Government agency security controls over IT systems and the status of selected IT projects.

This report communicates the results of the following key IT reviews we conducted in 2019-20:

  • information technology general controls
  • legacy system review.

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Report 11 of 2020 (Published on 2 September 2020)

Adelaide Oval redevelopment for the designated period 1 January 2020 to 30 June 2020

This Report addresses the Auditor-General’s obligation under the Adelaide Oval Redevelopment and Management Act 2011 (the Act) to report on the Adelaide Oval Hotel development. The Auditor-General is required to report on this development as:

  • the Adelaide Oval Hotel is a development for the purposes of the Act
  • public money was made available to Adelaide Oval SMA Limited (AOSMA) through a $42 million loan facility.

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Report 10 of 2020 (Published on 7 August 2020)

Passenger transport service contracts - Bus and light rail

Under section 39(3f) of the Passenger Transport Act 1994 I am required to:

  • report on the probity of the process leading to six service contracts being awarded from July 2020 for providing bus and light rail passenger transport services in metropolitan Adelaide
  • examine the contracts.

We concluded that:

  • we did not identify any specific probity matters that would suggest that the procurement process was compromised
  • the Department of Planning, Transport and Infrastructure designed and established processes for conducting the procurement that were consistent with sound probity principles
  • in carrying out the processes the Department of Planning, Transport and Infrastructure maintained sufficient documentation consistent with appropriate standards for most areas of the procurement other than for four specific areas of the procurement.

We also noted that there were some departures for specific practices and procedures. They were not systemic or pervasive but did warrant consideration to improve processes for future procurements.

For examining the contracts we concluded that the services contracts met the requirements of the Passenger Transport Act 1994

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Report 9 of 2020 (Published on 5 August 2020)

Education capital works - Planning and governance

Our audit of the planning and governance for education capital works assessed the effectiveness of the Department for Education’s strategic planning for future school infrastructure needs and its planning and governance of the Sustainable Enrolment Growth capital program.

We concluded that important elements of planning and governance for education capital works were not operating effectively. 

We also found that the Department for Education had some sound practices for planning for future school infrastructure needs and governance of the Sustainable Enrolment Growth capital program.

We recommended the Department for Education develop a more structured and integrated planning approach for capital works to ensure future school infrastructure needs are systematically identified based on robust information and analysis. We also recommended the Department for Education clarify, formalise and consolidate existing Sustainable Enrolment Growth program governance arrangements to ensure it can exercise robust oversight for the remainder of the program. 

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Report 8 of 2020 (Published on 21 July 2020)

Examination of the management of road asset maintenance: Northern Areas Council

We examined the arrangements established by the Northern Areas Council to manage the maintenance of its road assets.

We concluded that overall the Council effectively managed the maintenance of its road assets to enable it to meet the service delivery requirements of its community.

We also concluded that there are important improvements needed to ensure information is included in key documents to help make asset management decisions and keep the community better informed.

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Report 7 of 2020 (Published on 7 April 2020)

Flinders Link Project

We have completed a review of the Flinders Link Project. We assessed whether the arrangements established by the Department of Planning, Transport and Infrastructure to procure design and construction services for the project met appropriate procurement standards.

We concluded that the procurement process was not effectively managed because key elements did not meet those standards, proportionate to the high risk, high value nature of the project. They included:

  • robust procurement planning was not completed before procurement activity started
  • proper records of communications with Gateway South before completing the acquisition plan were not maintained
  • arrangements to manage probity were not implemented from the outset of the procurement
  • there was a lack of evidence-based analysis and documentation to support key decisions made during the procurement process, including using a direct negotiation approach
  • the nature and extent of work performed to demonstrate value for money was not sufficiently documented.

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Report 6 of 2020 (Published on 24 March 2020)

Update to the annual report for the year ended 30 June 2019

In September 2019 I issued my Annual Report for the year ended 30 June 2019.  In it I reported on the audit outcomes for 47 agencies. This included any significant financial outcomes, events and control matters communicated to those agencies.

Not every agency I am required to audit was included in my Annual Report. Some audits were unfinished at the time, and some I used my discretion under the Public Finance and Audit Act 1987 to exclude.

This report provides a summary of the audit outcomes for the remaining 106 agencies I have audited for 2018-19. The financial reports and independent audit reports for all these agencies are now available for viewing on the Auditor-General’s Department website.

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Report 5 of 2020 (Published on 3 March 2020)

Consolidated Financial Report review

This report communicates my findings on the review of the 2018-19 Consolidated Financial Report.

The Consolidated Financial Report fulfils the SA Government’s consolidated financial reporting obligations under Australian Accounting Standard AASB 1049 Whole of Government and General Government Sector Financial Reporting. It reports the SA Government’s actual financial performance and position for the year.

Our review of the Consolidated Financial Report did not identify any material misstatements or control deficiencies.  We did identify some opportunities to improve the way financial information is collected, validated and consolidated in preparing the Consolidated Financial Report.

There is no requirement under the Public Finance and Audit Act 1987 or any other legislation to provide an audit opinion on the Consolidated Financial Report, so I have not issued one.

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Report 4 of 2020 (Published on 3 March 2020)

Examination of credit card use and management: The Coorong District Council

This report communicates my findings on the examination of credit card use and management by The Coorong District Council.

I concluded that The Coorong District Council did not always use and manage its credit cards efficiently and economically during the period I examined.

We recommended that the Council should:

  • perform a formal and regular analysis of its credit card and accounts payable expenditure to:
  • identify areas for further improvement in the use of credit cards
  • confirm individual cardholder limits are reasonable and enable cardholders to perform their roles and responsibilities efficiently
  • confirm that the reason for issuing a credit card and its subsequent use remains appropriate and supports efficiency
  • inform its procurement strategy
  • consider updating its credit card policy for the improvements we identified
  • ensure all delegations and sub-delegations are made in line with the LG Act
  • clarify the effect of the conditions or limitations contained in its instrument of delegations
  • ensure its instrument of delegations clearly and accurately reflects the powers and functions delegated. The information contained in the Instrument of Delegations is consistent within itself and other relevant documents
  • have the CEO maintain a signed formal instrument of sub-delegations separate from the instrument of delegation by the Council 
  • update its new credit card policy to require an independent review of credit card expenditure and document the procedures for this. Reinforce to staff the importance of the independent reviewer’s responsibility
  • review a sample of credit card transactions to ensure the independent review is operating effectively and in line with the new/revised policies
  • periodically report the CEO’s and Mayor’s credit card transactions to its audit committee for review to ensure the expenditure is reasonable and for business purposes
  • update its policies for:
  • the expenditure principles staff need to apply and clearly demonstrate at the time expenditure is incurred
  • the nature and extent of information needed to adequately justify the business purpose of the expenditure
  • maintain adequate records to explain its expenses and demonstrate transparency in the decision-making process and the proper use of public money
  • evidence approvals that support the business purpose prior to incurring expenditure that is outside of an approved policy and/or perceived to be unusual or uncommon
  • identify its key business expenses and develop and implement policies and procedures for them, such as policies for travel, entertainment and hospitality
  • in revising its expenditure policies, consider consulting with its community, and other key people or groups, to better understand the public’s expectations of acceptable expenditure behaviours
  • consider revising its credit card policy to limit the amount spent on individual gifts to ensure the expenditure is a proper use of public money
  • review its policy on funding social functions such as the annual elected member and staff Christmas function
  • better explain the business purpose and business benefit to the Council before incurring sensitive expenditure. The Council should also maintain adequate records to support this explanation
  • review its policy and procedure on employee recognition of service and achievements, with specific focus on staff performance and the expenditure principles
  • have its staff organise the Mayor’s travel arrangements in line with policy and existing practices and reassess the need for the Mayor to have a council credit card
  • clarify and, where necessary, update its elected members allowance, benefits and support policy for requirements to ensure all expenditure incurred by or for elected members is necessary and appropriate in performing their official duties.

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Report 3 of 2020 (Published on 3 March 2020)

Examination of credit card use and management: City of Playford

This report communicates my findings on the examination of credit card use and management by the City of Playford.

I concluded that the City of Playford did not always use and manage its credit cards efficiently and economically during the period I examined.

We recommended that the Council should:

  • perform a formal and regular analysis of its credit card and accounts payable expenditure to:
  • identify areas for further improvement in the use of credit cards
  • inform its procurement strategy
  • review its policies and guidelines regularly and by the due date
  • consider updating its credit card policy and guidelines for the improvements we identified
  • consider, as it decides future risk priorities, having an internal auditor or legal advisor review the delegation process and documents to ensure they are a clear, complete and accurate record of the delegations under the LG Act
  • review a sample of credit card transactions to ensure the independent review is operating effectively and in line with its revised policy and guidelines
  • consider having a suitable senior officer assess the Executive’s credit card transactions against the expenditure principles and report any questionable transactions to the Executive group 
  • have its audit committee periodically review a report of the CEO’s credit card transactions to ensure the expenditure is reasonable and for business purposes
  • update its policies for:
  • the expenditure principles that staff need to apply and clearly demonstrate at the time expenditure is incurred
  • the nature and extent of information needed to adequately justify the business purpose of the expenditure
  • maintain adequate records to explain its expenses and demonstrate transparency in the decision-making process and the proper use of public money
  • consider updating its travel and hospitality policies and guidelines for the improvements we identified
  • in revising its expenditure policies, consider consulting with its community, and other key people or groups, to better understand the public’s expectations of acceptable expenditure behaviours
  • review its business expense transactions to ensure the new/revised policies and guidelines are implemented and operating effectively
  • review its employee recognition policy and guidelines with specific focus on staff performance and the expenditure principles
  • revise its Mayor support and elected member support policy guidelines to remove the provision of special functions
  • have its audit committee regularly scrutinise sensitive expenditure that results in benefits to the elected members to determine whether it is a proper use of public money.

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Report 2 of 2020 (Published on 3 March 2020)

Examination of credit card use and management: City of Charles Sturt

This report communicates my findings on the examination of credit card use and management by the City of Charles Sturt.

I concluded that the City of Charles Sturt did not always use and manage its credit cards efficiently and economically during the period I examined.

We recommended that the Council should:

  • extend its analysis of credit card and accounts payable expenditure to:
  • identify areas for further improvement in its use of credit cards
  • inform its procurement strategy
  • consider updating its credit card policy and procedures for the improvements we identified
  • reinforce to staff the importance of the independent reviewer’s responsibility
  • update its credit card policy to require the CEO’s credit card transactions to be independently reviewed
  • have its audit committee periodically (eg quarterly) review a report of the CEO’s credit card transactions to ensure the expenditure is reasonable and for business purposes
  • review its expenditure policies to ensure they include:
  • the expenditure principles staff need to apply and clearly demonstrate at the time the expenditure is incurred
  • the nature and extent of information needed to adequately justify the business purpose of the expenditure. This may include having sensitive expenditure approved before it is incurred
  • review its credit card policy and procedure for the recordkeeping requirements to ensure the reconciliation records adequately explain the expenditure, including the business purpose
  • consider updating its travel and hospitality, gifts and employee expenses policies for the improvements we identified
  • review internal policies and guidelines regularly and by the due date
  • review its hospitality and gift expense transactions to ensure the new policy and procedures are implemented and operating effectively
  • consider streamlining its policies by having one policy on recognising achievement that covers all recognition programs
  • review its recognition of service policy, dated May 2015, to provide further direction and guidance on the proper use of public money to ensure:
  • the reason for the recognition is clearly aligned to the Council’s business purpose
  • the expenditure is necessary and the amount spent represents prudent expenditure behaviour
  • review its recognition of achievement policy and guideline, dated September 2019, with specific focus on staff performance and the expenditure principles. The Council should consider keeping volunteer recognition separate by providing for it in its volunteer policy
  • to inform its decision on future practice, survey its community to understand the public’s expectation of what sensitive expenditure may or may not be funded by public money, or coordinate with other councils to obtain this information
  • review its recognition of achievement transactions to ensure the new policy and guideline are implemented and operating effectively
  • revise its Council members’ allowance and support policy to remove the provision of alcohol; establish expenditure limits for the provision of meals and consider whether the following expenditure is consistent with the expenditure principles:
  • the Mayor’s Christmas dinner
  • the elected members’ service recognition gifts
  • in future, in our opinion, better explain the business purpose and business benefit to the Council before incurring sensitive expenditure
  • have its audit committee regularly scrutinise sensitive expenditure that results in benefits to the elected members to determine whether it is a proper use of public money.

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Report 1 of 2020 (Published on 3 March 2020)

Adelaide Oval redevelopment for the designated period 1 July 2019 to 31 December 2019

This Report provides an executive summary of the matters arising from the audit for the three reporting terms of reference provided for in the Adelaide Oval Redevelopment and Management Act 2011.

This is the final report required under the Act concerning Term 1 namely the $535 million statutory limit.

We did not identify any material matters from our review of the current designated reporting period. However, we did note opportunities for the Department of Planning, Transport and Infrastructure to improve the documentation supporting the approach and rationale for certain payments.

There have also been some changes in the outstanding defects arrangements that will require ongoing management.

This report also discusses my ongoing reporting obligations including the review of the financing, constructing and operating arrangements put in place for the Adelaide Oval hotel project.

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