Report on Ministerial Portfolios at November 1, 2004report on ministerial portfolios at november 1,...

at November 1, 2004 and

Report 9 November 2004

AUDITOR GENERAL for Western Australia

Serving the Public Interest

Report on Ministerial Portfolios

Performance Examination of Management of Natural Resource Management Funding

AUDITOR GENERALfor Western Australia

THE SPEAKER THE PRESIDENTLEGISLATIVE ASSEMBLY LEGISLATIVE COUNCIL

REPORT ON MINISTERIAL PORTFOLIOS AT NOVEMBER 1, 2004 AND PERFORMANCE EXAMINATION OF MANAGEMENT OF NATURAL RESOURCE MANAGEMENT FUNDING

I submit this Report under section 95 of the Financial Administration and Audit Act 1985 (FAAA).

Ministerial Portfolio Audit Results and Commentary

This part of the Report includes:

� opinions issued under the FAAA on or before November 1, 2004 on the controls, financial statements and performance

indicators of departments, statutory authorities and subsidiary bodies with reporting dates primarily on June 30, 2004

and July 31, 2004

� opinions issued on corporatised bodies reporting under provisions mirroring the Corporations Act 2001, cemetery boards

reporting under the Cemeteries Act and audits of other entities requested by the Treasurer

� audit certifications of financial and statistical information produced by agencies to discharge conditions of Commonwealth

funding, grants and other legislation

� commentary on timeliness and quality of financial reporting, compliance and control, and accounting and audit issues.


This part of the Report details the results of an examination of the management of Natural Resource Management Funding

arising from work undertaken pursuant to section 80 of the FAAA.

D D R PEARSON

AUDITOR GENERAL

November 10, 2004

AUDITOR GENERAL FOR WESTERN AUSTRALIA 2 2

Contents

Executive Summary 4

PART 1: AUDIT RESULTS AND COMMENTARY 7

Part 1.1: The Audit Year 7

Timeliness and quality of financial reporting during 2003-04, including better practice agencies

Part 1.2: Summary of Audit Results 11

Audit qualifications issued under the FAAA on controls, financial statements and performance

indicators for agencies with reporting dates between June 30, 2004 and July 31, 2004

Part 1.3: Compliance and Control Issues 14

Information technology controls, including security and business continuity, payroll,

asset management, corporate governance and common use contract fees

Part 1.4: International Financial Reporting Standards 21

Impact on agencies of International Financial Reporting Standards

PART 2: PERFORMANCE EXAMINATION OF MANAGEMENT 24 OF NATURAL RESOURCE MANAGEMENT FUNDING

Results of an examination of natural resource management funding

APPENDICES 29-39

Appendix 1: Summary of Audit Opinions Issued 29

Ministerial portfolio table of audit opinions issued for agencies

with reporting dates between June 30, 2004 and July 31, 2004

Appendix 2: Audit Certifications 37

List of audit certifications completed since May 14, 2004

Appendix 3: Alphabetical index 39

Alphabetical index of agencies referred to in Report

AUDITOR GENERAL FOR WESTERN AUSTRALIA 3 3

Executive Summary

Audit Results and Commentary During 2003-04 there has been significant improvement in the timeliness of submission of fi nancial

statements and performance indicators by statutory authorities and to a lesser extent by departments.

However, the quality of agency end of year reporting remains an issue.

Three qualified opinions were issued from the total of 169 financial statement and 127 performance

indicator audits completed at November 1, 2004 for agencies with financial periods primarily ending

between June 30, 2004 and July 31, 2004. Issues not warranting a qualifi cation were reported to agency

management for action to improve controls and the quality of reporting and accountability to Parliament.

Further, 16 audit certifications, to assist agencies in discharging funding conditions, were issued.

Across agency control and compliance issues previously reported have not significantly improved or

progressed in relation to:

� information technology security access controls and disaster recovery or business continuity plans.

Key security controls for user access management, responsibilities of individuals for their own

passwords and monitoring system access, including activity and event logging for network and

operating systems, are basic controls not evident at all agencies.

� timely tabling of annual Statements of Corporate Intent (SCI) for the Water Corporation, Western

Power and the eight port authorities. These entities operate according to a draft SCI until ministerial

review processes are completed and their SCI is tabled in Parliament.

Asset management findings reported in December 2003 were followed up and further progress is still

required at the Department of Education and Training to address control weaknesses over computer

hardware, furniture, plant and equipment.

Payroll controls were reviewed at 12 agencies, with 10 agencies needing to improve their procedures to

provide assurance of the accuracy and validity of their fortnightly payroll and reconciliation to the general

ledger payroll records.

The matters of significance drawn from the Report are recorded below.

AUDITOR GENERAL FOR WESTERN AUSTRALIA 4

Matters of Significance

� Departments and statutory authorities improved the timeliness of submission of their 2003-04

� Eighty seven per cent of total State assets were audited within three months of reporting date

�

�

performance indicators in 2003-04

�

2003-04

�

�

authorities were not tabled in a timely manner to enable Parliament to consider their contents

� Establishment of legislative authority for collection of common use contract fees is being progressed

�

improvement

Part 1.4: International Financial Reporting Standards (IFRS)

� Agencies have made satisfactory progress in preparation for IFRS implementation

5

Part 1.1: The Audit Year

financial statements and performance indicators, however quality remains an issue

Part 1.2: Summary of Audit Results

Two qualified opinions on controls, compliance with relevant laws or financial statements were issued, compared with five in 2002-03

One qualified opinion on performance indicators was issued, compared with seven in 2002-03 and the five agencies that did not submit performance indicators in 2002-03 again did not submit

Part 1.3: Compliance and Control Issues

Significant information technology security weaknesses and inadequate disaster recovery or business continuity plans were evident at over half of the 23 agencies specifically reviewed in

Payroll procedures require improvement at 10 of the 12 agencies specifi cally reviewed

Statements of Corporate Intent for the Water Corporation, Western Power and the eight port

Asset management procedures at the Department of Education and Training require further

AUDITOR GENERAL FOR WESTERN AUSTRALIA

REPORT ON MINISTERIAL PORTFOLIOS AT NOVEMBER 1, 2004 AND PERFORMANCE EXAMINATION OF

MANAGEMENT OF NATURAL RESOURCE MANAGEMENT FUNDING

EXECUTIVE SUMMARY (continued)


Six regional natural resource management (NRM) groups have, since March 2003, been the key recipients

of approximately $13.5 million of State and Commonwealth bilateral funding. Funding has been provided

to the groups to develop regional NRM strategies and investment plans and for priority projects. The

strategies and plans are to be accredited before the groups receive further funding to invest in their

regions.

The State through the Department of Agriculture (the Department) has the responsibility to make sure the

groups are capable of effectively managing the up to $400 million that they will receive and distribute on

NRM projects over the next four years.

Key Findings � Management of pre-accreditation funding by the Department has been adequate, though imminent

funding increases will require more rigorous arrangements.

� The State and the regional groups both recognise that current governance arrangements within the groups need to be strengthened to reflect the significant increase in NRM funding that will be made to them over the next four years. Whilst contractual agreements with the groups are being strengthened prior to funding increases, issues relating to governance structures, the capacity of the groups to meet higher governance standards and the need for the Department to obtain greater assurance that public moneys are spent appropriately are yet to be resolved.




Part 1: Audit Results and Commentary

Part 1.1: The Audit Year � Departments and statutory authorities improved the timeliness of submission of their 2003-04

financial statements and performance indicators but quality remains an issue

� Eighty seven per cent of total State assets were audited within three months of reporting date

Timeliness and Quality of Reporting Departments and statutory authorities improved the timeliness for submitting their 2003-04 fi nancial

statements for audit. Fewer agencies applied for extensions of time or submitted late and a greater

proportion submitted early or in the last week, rather than on the statutory date.

80

70

60

50

40

30

20

10

0On After

week statutory statutory date date

2%

20% 22%

6%

14%

56%

73%

63%

20%

10%

3%

� 2001-02

� 2002-03

� 2003-04

Week or In last more early

Per

cen

tage

11%

Figure 1: Departments’ timing of submission of financial statements and performance indicators

Source: OAG


PART 1: AUDIT RESULTS AND COMMENTARY (continued)

80

70

60

50

40

30

20

10

0On After

week statutory statutory date date

6%

14%16%

21%

12%

42%

37%

63%

37% 37%

5%

� 2001-02

� 2002-03

� 2003-04

Week or In last more early

Per

cen

tage

11%

Figure 2: Statutory authorities’ timing of submission of financial statements and performance

indicators

Source: OAG

A significant proportion of agencies continue to submit poor quality financial statements and performance

indicators with numerous technical and typographical errors, misstatements and irrelevant, inconsistent

or missing note disclosures. In addition, poor quality supporting working papers and the unavailability of

key agency staff due to leave and other commitments at critical stages of the audit process complicated

the audit task and required additional audit resources and time to complete audits.

Introduction of the FAAA in 1985 required all agencies to prepare financial statements on an accrual basis.

Since then computerised accounting systems have been developed to produce accrual accounting based

reports. As such, there remains significant scope for agencies to produce more timely and accurate annual

financial statements and performance indicators. That this has not occurred to date, refl ects adversely on

the standard of internal reporting being utilised for management purposes during the year.




Better Practice Agencies

In contrast, Table 1 lists the better practice agencies for 2003-04 and highlights agencies that also appeared

in 2002-03. These agencies typically submitted good quality financial statements and performance

indicators supported by reliable working papers and ensured the availability of key staff during the fi nal

audit process. In consequence they received clear audit opinions and enabling them to table their annual

reports in Parliament within three months of year end.

Departments

Department of Racing, Gaming

and Liquor

Department of the Registrar,

Western Australian Industrial

Relations Commission *

Office of the Inspector of

Custodial Services *

Police Service *

Statutory Authorities

Country Housing Authority

Disability Services Commission *

East Perth Redevelopment Authority

Fire and Emergency Services Authority of Western Australia *

Goldfi elds-Esperance Development Commission

Government Employees Housing Authority

Insurance Commission of Western Australia *

Legal Aid Commission of Western Australia *

Lotteries Commission *

Mid West Development Commission

Real Estate and Business Agents Supervisory Board

Settlement Agents Supervisory Board

Small Business Development Corporation

South West Development Commission *

Corporatised Bodies

Bunbury Port Authority

Fremantle Port Authority *

Water Corporation * State Housing Commission * , including Keystart Group

Subiaco Redevelopment Authority

Western Australian Land Authority

Western Australian Treasury Corporation *

Zoological Parks Authority

Table 1: Better practice agencies for timeliness and quality of their 2003-04 financial statements and

performance indicators

* Also identifi ed in 2002-03 as better practice agencies

Source: OAG



Some of these agencies provided finalised, but sometimes uncertifi ed, fi nancial statements and

performance indicators well in advance of the statutory due date. This enabled earlier commencement

of the final audit process which in turn gave the Accountable Officer or Accountable Authority insight to

any audit findings so any remedial action could be effected before certifying the fi nancial statements and

performance indicators.

In order to facilitate earlier reporting, audit planning, the allocation of resources and timeframes for

completing audits are agreed with agencies and formalised at the audit entrance interviews. Where

agencies fail to meet their agreed commitments, audit resources need to be rescheduled, causing signifi cant

difficulties for audit planning and the revised timing of audits at other agencies.

Ultimately, as a result of improved timeliness of submission of financial statement and performance

indicators by agencies and significant effort by audit staff and contractors, audit opinions covering assets

of $71 billion, or approximately 87 per cent of total State assets, were issued within three months of

reporting date. This compared with 75 per cent in 2002-03 and 54 per cent in 2001-02.

10 AUDITOR GENERAL FOR WESTERN AUSTRALIA



Part 1.2: Summary of Audit Results � Two qualified opinions on controls, compliance with relevant laws or financial statements were

issued, compared with five in 2002-03

� One qualified opinion on performance indicators was issued, compared with seven in 2002-03 and the five agencies that did not submit performance indicators in 2002-03 again did not submit performance indicators in 2003-04

The results of 169 financial statement and 127 performance indicator audits (Refer Appendix 1) and

16 audit certifications (Refer Appendix 2) completed between May 14, 2004 and November 1, 2004,

primarily for agencies with financial periods ending between June 30, 2004 and July 31, 2004, are as

follows:

� audit opinions issued on controls, financial statements and performance indicators

� 34 departments

� 99 statutory authorities

� audit opinions issued on fi nancial statements

� Treasurer’s Annual Statements

� 10 corporatised bodies

� 12 subsidiary entities

� 2 cemetery boards

� 9 request audits

� the final audits of two abolished agencies

� 16 audit certifi cations of financial and statistical information produced by agencies to discharge

conditions of Commonwealth funding, grants or other legislation.

The audit of eight statutory authorities, one subsidiary entity, six cemetery boards and two request audits

were not finalised. In addition, two statutory authorities and two request audits have yet to submit fi nancial

statements for audit.

It is noteworthy and pleasing that numerous agencies approached Audit during the year to clarify whether

their proposed accounting treatment or performance indicators complied with statutory requirements

and best practice. In several instances, this initiative enabled the agencies to remedy their accounting

treatment or performance indicators in advance of year end.

In forming an opinion, audit work involves judgement and most audit evidence is persuasive rather than

conclusive. Limitations in any audit include the use of sample testing, the effectiveness of internal control

structures and the possibility of collusion. As a result, audits are not an absolute guarantee of the veracity

or reliability of audited agency information and not all matters of significance may be identifi ed.



Audit Qualifications – Financial Statement and Controls Two agencies received qualified opinions on their controls, compliance with relevant laws or fi nancial

statements. This represents a decrease on the fi ve qualified opinions issued in 2002-03. Prior to forming a

qualified opinion, the issue is discussed with agency management and their views are considered before

Audit makes an informed and balanced decision regarding the issue of a qualifi ed opinion.

Details of the qualified opinions issued and related comments are set out below in Table 2. The full

opinion appears in the annual report of each agency which should be tabled in Parliament by the Minister

within 21 days of the audit opinion being received.

Agency Details of Qualification Comments

Government Controls: The Board could not reconcile its bank An effective reconciliation at

Employees account to the general ledger during the year as June 30, 2004 was achieved,

Superannuation there were a significant number of unexplained subsequent to year end.

Board reconciling items.

The Board was not able to reconcile a number of The Board is reviewing its

general ledger clearing accounts throughout the

year and at year end. Clearing accounts should be

reconciled to a zero balance at balance date and

systems configuration to ensure

appropriate analysis of the

clearing accounts.

the reconciling items posted to the appropriate

accounts.

Rottnest Island

Authority

Controls and fi nancial statements: The Authority

relied on information provided by third parties

The Authority’s control

procedures implemented during

to determine the landing fee revenue due to the 2003-04, including review of

Authority. The Authority did not have controls in

place to verify the accuracy or completeness of the

third parties’ records, did not

provide assurance as to the

information provided. Consequently an opinion integrity and reliability of the

could not be formed on whether $3.35 million

included as Admission Fees in Revenue from

third party returns. The Authority

is continuing with its efforts to

Goods and Services was fairly presented. resolve this matter, including

making further regulatory

amendments.

Table 2: Qualifi ed financial statement and controls audit opinions and comments

Source: OAG




Audit Qualifications – Performance Indicators Performance indicators of 127 agencies were audited by November 1, 2004 and one agency received a

qualified opinion. This represents a decrease on the seven qualified opinions issued during 2002-03. Prior

to forming a qualified opinion, agency management is advised of concerns and matters may be resolved

to avoid a qualification. Details of the qualified opinion issued and related comments appear below in

Table 3.

Nine agencies did not submit performance indicators as required by the FAAA including two agencies

which only operated for part of the year and two agencies that were abolished. This represents a decrease

on 2002-03, when eleven agencies did not submit performance indicators. The Aboriginal Affairs

Planning Authority and the Administrations of the Legislative Assembly, Legislative Council and Joint

House Committee continue to not submit performance indicators and the Perth International Centre for

Application of Solar Energy has not submitted performance indicators for the last two years.

Agency Details of Qualification Comments

Department of The Department was unable to report on The new effectiveness indicators

Education Services two key effectiveness indicators relating were not implemented in time

to non-university providers of higher to collect data for 2003-04. The

education awards as the data was not Department will be collecting the

collected for the 2003-04 reporting period. data during 2004-05.

Table 3: Qualified performance indicator audit opinions and comments

Source: OAG



Part 1.3: Compliance and Control Issues The statutory requirement for an explicit opinion on controls in the public sector reflects the need for

assurance about the integrity of the use of taxpayer moneys. In forming individual agency opinions,

the breadth and level of testing is determined using relevant audit methodology to assess an individual

agency’s operations, internal controls and risks. The audit process is, however, permeated by judgment

and, as previously noted, most audit evidence is persuasive rather than conclusive. In addition, consistent

with auditing standards, some business cycle controls at an agency are not tested in detail each year.

In consequence, further complementary audits of the reliability of systems and procedures are undertaken.

These audits provide added assurance that the individual professional judgements and conclusions reached

during the course of annual attest audits are soundly based and consistently applied across agencies.

Whilst areas of control weaknesses vary across agencies, a common issue in 2003-04 continued to be in

relation to information technology controls. An updated summary of these findings over the last three

years appears in Table 4.

In 2003-04 extended audit testing of payroll controls was conducted at selected agencies. The fi ndings

summarised below provide a basis for all agencies to review their individual payroll policies, procedures

and practices and, where appropriate, take action.

Control issues for asset management and compliance issues on corporate governance and common use

contract supplier fees are also reported.

Information Technology Controls � Significant information technology security weaknesses and inadequate disaster recovery or

business continuity plans were evident at over half of the 23 agencies specifically reviewed in 2003-04

As in previous years Audit found that many agencies had failed to establish adequate information

technology (IT) security controls. Most of the agencies that were advised in 2002-03 of weaknesses in

specific systems had addressed these particular problems but they had not followed through to identify and

address similar problems in their other systems. The audit also found that agencies continued to operate

without adequate and tested disaster recovery plans (DRPs) and business continuity plans (BCPs).




Recommendations

Responsibility for IT security within each agency should be clearly assigned and DRPs and BCPs should

be kept up to date with key aspects regularly tested. Key security controls requiring particular attention

include:

� user access management including user approval and registration, privilege management, password

management and review of user access rights

� responsibilities of individual users including appropriate password use

� network and operating system controls including enforced access paths, user identifi cation and

authentication, password management and timeouts

� controls over the ability to input key day-to-day transactions

� monitoring system access and use including activity and event logging.

Findings

Information systems are critical in supporting and enabling the operations of most agencies. Consequently,

the audit of key IT controls is seen as a priority to provide assurance regarding the level of reliance that

can be placed on the integrity, reliability and availability of IT systems.

IT controls at agencies are audited on a rotational basis. In 2003-04, the audit focus was on security and

access controls at large agencies and selected medium sized agencies. In the previous two years, access

and security was only examined for a specific system if it had undergone modifi cations. Other issues

identified in 2002-03 were also followed up in 2003-04 to ensure satisfactory resolution.

Access and Security Controls

Computer access and security controls such as appropriate password settings, user lockouts and system

logs are designed to prevent and/or detect unauthorised changes or disclosure of valuable and confi dential

information.

Seventeen of the 23 agencies reviewed in 2003-04 had serious access and security weaknesses in two

or more of their systems. Such a situation is disturbing as all of the agencies with these weaknesses

were advised that specific systems examined in 2002-03 had similar problems. Whilst almost all of these

agencies addressed the problems in the specifi c systems identified by Audit, they did not then follow

through to ensure that the same types of weaknesses were not present in their other systems.



Findings 2001 - 02 2002 - 03 2003 - 04

Occurrences % Occurrences % Occurrences %

Access and Security 61

Inadequate password security 14 out of 26 54 18 out of 22 81 14 out of 23

Staff access not being properly 15 out of 26 58 19 out of 23 82 14 out of 23 61

approved and reviewed

Access logs not being reviewed 11 out of 26 42 14 out of 19 73 11 out of 23 48

and monitored

Table 4: Summary of common information technology control findings at government agencies

Seventeen agencies had two or more system security weaknesses. Security controls at six agencies were considered satisfactory.

Source: OAG

Other Issues

A range of issues identified in 2002-03 as requiring improvement were followed up in 2003-04. These

included the need for DRPs and BCPs which provide for the ongoing availability of critical information

systems.

Of 18 agencies assessed in 2003-04 as having inadequate DRPs or BCPs, nine still lack effective plans.

Reasons included agency amalgamations and establishment of new systems which affected the overall IT

environment. Several agencies not affected by these factors had progressed development of their plans,

but not to the point of completion.

DRPs and BCPs are essential in today’s heightened environment of threats posed by, for example,

computer viruses, hackers and terrorism. DRPs and BCPs provide for the timely recovery of essential

business processes and information systems in the event of a disaster. However, to be effective, they need

to be comprehensive, authorised and regularly tested.

Payroll � Payroll procedures require improvement at 10 of the 12 agencies in the audit sample

Audit testing at 12 agencies disclosed good practice payroll management at two agencies:

� Department of Justice

� State Housing Commission .




However, a range of deficiencies were reported to management at the other ten agencies. Audit

recommended that higher priority be given to payroll controls, especially:

� review of payroll reports by cost centre managers, in accordance with contemporary business

practice, to complement routine procedures and provide assurance of the accuracy and validity of

each payroll distribution

� monthly reconciliation of the payroll system to general ledger payroll records to ensure completeness

and accuracy of fi nancial reporting

� ensuring leave paid and leave taken are recorded accurately in both the payroll system and personnel

records.

Asset Management of Computer Hardware, Furniture, Plant and Equipment

� Asset management procedures at the Department of Education and Training require further improvement

During 2003-04 four of the five agencies reported at November 25, 2003 (Report No 10, December 2003)

improved their asset management control procedures.

Although the Department of Education and Training (DET) appointed an officer to improve its asset

management procedures, at June 30, 2004:

� Audit was unable to sight evidence of the central office asset register being regularly reconciled

or reviewed. Procedures have subsequently been implemented and will be subject to audit in

2004-05.

� Weak management controls over recording and verifying schools’ assets reduced the assurance

that asset, depreciation and accumulated depreciation balances provided to DET by the schools

were complete and accurate. This impacts on DET’s reporting of total assets, depreciation and

accumulated depreciation.

� Formal write off action for significant values for missing, stolen or destroyed central offi ce assets

and schools’ assets for the previous three years have not been submitted to the Minister or Governor

for approval and, therefore, have not been reported to Parliament. In 2003-04 schools’ insurance

claims alone are expected to be in the vicinity of $11 million.

Contrary to practice in other educational institutions, the library collections at schools are currently not

recognised as an asset class in the statement of financial position. The current practice of expensing these

assets means that the external users of the DET’s fi nancial statements are not fully informed of the total

asset holdings.



As part of ongoing asset management, DET has advised that during 2004-05 current valuations will

be obtained for all land and buildings. A review of buildings’ useful life, based on compliance with

accounting standards, is also required to ensure that depreciation of buildings is appropriate and the

financial statements disclose up to date information.

Corporate Governance – Statement of Corporate Intent � Statements of Corporate Intent for the Water Corporation, Western Power and the eight port

authorities were not tabled in a timely manner to enable Parliament to consider their contents

As previously reported, (Report No 10 December 2000, Report No 13 December 2001, Report No 9

December 2002, Report No 10 December 2003), Statements of Corporate Intent (SCI) for the corporatised

entities, Water Corporation , Western Power and the eight port authorities, have not been tabled in

Parliament in a timely manner. In the last four years, only one SCI (Western Power for 2002-03) has been

tabled prior to commencement of the financial year to which it relates. (Refer Table 5.)

At the core of the accountability requirements for corporatised entities is the preparation, each year, of a

strategic development plan and a SCI. This SCI is a contractual agreement between each corporation and

the Minister, and facilitates an evaluation of the corporation’s performance each year. Until the tabling

of the agreed SCI, the submitted draft stands as the contractual agreement between the agency and the

Minister. However, uncertainty exists as the submitted draft, under review by executive government and

the entity, is not on the public record until agreed and tabled in Parliament. In practice, Parliament has

effectively not had an opportunity to consider each entity’s SCI until well into the financial year to which

it relates.

Over the last four years (2001-02 to 2004-05), SCIs for Western Power and the Water Corporation have

been submitted to their respective Ministers by the dates required by their legislation, other than Western

Power’s 2004-05 SCI which was not submitted by the due date. Western Power attributed this to the impact

of the release of the April 30, 2004 Report of the Review Committee into Western Power Corporation

management of the power supply crisis of February 16 to 18, 2004 (Cronin Committee of Review) and

the Government decision to suspend the disaggregation process.

Similarly, the SCIs for the eight port authorities over the same four year period have been submitted to

the Minister by March 31, as required, except in 2001-02 and 2004-05 when one SCI was submitted late

in each year by different port authorities.

Each SCI is reviewed by the respective Minister and, if appropriate, requests changes to the SCI.

Legislation requires that the Treasurer’s concurrence be sought before the Minister can agree to the SCI

and table it in Parliament. Delays in the executive government review process have resulted in SCIs

submitted on time by corporatised entities, not being tabled in Parliament prior to the commencement of

the financial year to which it relates.




Table 5 shows the dates that SCIs have been tabled over the last four years. It highlights that in 2001-02

80 per cent of the SCIs were tabled after the end of the year to which they related. For the 2002-03 and

2003-04 SCIs, only one was tabled prior to commencement of the financial year to which it related, most

were tabled well into the second half of the year and two were tabled after year end. Six of the 2004-05

SCIs have been tabled before November 1, 2004, being an improvement on prior years, but this is still

after commencement of the financial year to which they relate.

Statements of Corporate Intent Name of Authority 2001-02 2002-03 2003-04 2004-05 Albany Port Authority August 21, 2002 April 1, 2003 June 15, 2004 October 20, 2004

Broome Port Authority August 21, 2002 April 1, 2003 August 17, 2004 Not Tabled

Bunbury Port Authority August 21, 2002 April 1, 2003 March 2, 2004 October 19, 2004

Dampier Port Authority November 27, 2002 April 1, 2003 August 17, 2004 Not Tabled

Esperance Port Authority August 21, 2002 November 26, 2002 March 2, 2004 October 19, 2004

Fremantle Port Authority November 28, 2002 December 3, 2002 June 15, 2004 October 19, 2004

Geraldton Port Authority November 27, 2002 April 1, 2003 June 15, 2004 October 20, 2004

Port Hedland Port Authority August 21, 2002 November 26, 2002 March 2, 2004 October 20, 2004

Water Corporation December 5, 2001 September 19, 2002 March 2, 2004 Not Tabled

Western Power Corporation April 9, 2002 June 27, 2002 November 19, 2003 Not Tabled

Table 5: Date Statements of Corporate Intent Tabled in Parliament (current to November 1, 2004)

Source: Parliamentary Tabled Papers

Common Use Contract Fees � Establishment of legislative authority for collection of common use contract fees is being

progressed

The Department of Treasury and Finance (DTF) as the delegate of the State Supply Commission (SSC)

continued to collect fees from Common Use Contracts (CUCs) without the appropriate interdepartmental

collection arrangements.

As reported in September 2002 (Public Sector Performance Report No 4, page 10) “The Department of Industry and Technology (DOIT) lacked authority in relation to charging fees on the value of supplier sales under CUCs because appropriate interdepartmental collection arrangements were not in place.”

On February 2, 2003 responsibility for management of CUCs transferred from DOIT to DTF following a

restructuring of departments. In 2003-04 approximately $3.8 million was collected.



Since taking over responsibility for CUCs, DTF together with SSC have been actively exploring options

to resolve this matter. DTF has informed Audit that for new CUCs tendered in 2003, an ‘end user fee’

was applied in accordance with the advice from the State Solicitor’s Office. Attempts were also made to

obtain the agreement of the Australian Taxation Office (ATO) for a new method of collecting the GST on

the fee, which would have been much more efficient for the suppliers as well as Government. However,

this was not agreed by the ATO, so the DTF has now removed the fee from the large majority of CUCs.

Negotiations with the contracted suppliers to adjust their prices by the quantum of the fee were largely

completed by the end of the 2003-04 fi nancial year.

In reviewing all the different fee arrangements on CUCs, DTF also identified a small number of contracts

where suppliers are offering a rebate. To ensure that Government does not lose the benefit of the rebate

arrangements, and to ensure that an efficient GST process for this situation can be applied, a legislative

change was found to be the most effective solution. This has been progressed and the SSC advised on

August 2, 2004 that the Minister for Housing and Works had obtained Cabinet approval to draft an

amendment to the State Supply Commission Act 1991 to allow the SSC or its delegate to charge a fee on

government suppliers to a common use arrangement. The SSC also advised that further legal clarifi cation

was being obtained.




Part 1.4: International Financial Reporting Standards

� Agencies have made satisfactory progress in preparation for International Financial Reporting Standards implementation

During 2003-04 Audit worked closely with the Department of Treasury and Finance (DTF) to proactively

assist agencies to manage the implementation of International Financial Reporting Standards (IFRS).

On July 15, 2004 all Australian equivalents to IFRS became Australian Accounting Standards. They

include additional text, suitably identified, to deal with different and additional requirements for not-for-

profi t entities. Under IFRS a not-for-profi t entity is defi ned as an entity whose principal objective is not

the generation of profi t.

DTF, in consultation with Audit, considers that all public sector entities other than Gold Corporation

should be classified as not-for-profit entities for the purposes of compliance with IFRS. The Standards

apply to all agencies for reporting periods commencing on or after January 1, 2005 with the requirement

for prior year comparative figures to be disclosed on an IFRS basis.

Some of the key changes under IFRS that will impact the Western Australian public sector include:

Financial Statements

� The titles of the two primary statements will change. The current Statement of Financial Performance

will be titled ‘Income Statement’ and the current Statement of Financial Position will be titled

‘Balance Sheet’.

� A new financial statement titled ‘Statement of Changes in Equity’ will be required.

� Gains and losses on the disposal of non-current assets must be offset and recognised on a net basis.

Currently gross proceeds from the disposal of non-current assets are recognised.

� Disclosure of extraordinary items will be prohibited.

� The titles of a number of line items in the Balance Sheet will change from those in the current

Standards, for example, Cash Assets will change to Cash and Cash Equivalents, Receivables will

change to Trade and Other Receivables, and Payables will change to Trade and Other Payables.



Accounting Policies

� Any voluntary changes of accounting policies will be required to be applied retrospectively by

adjusting the opening balance of retained earnings of the earliest period presented and restating prior

periods, rather than prospectively under the current Standards.

� There is no distinction between fundamental errors and other material errors as is the case under

the current Standards. All material errors will be termed ‘prior period errors’ under IFRS and be

accounted for retrospectively rather than prospectively under the current Standards, except for

revisions of accounting estimates which will be accounted for prospectively.

Assets

� All assets will be required to be subject to an annual assessment of impairment to determine whether

there is any indication that an asset has been impaired. The current Standards only require the non-

current assets of for-profit entities measured on a ‘cost’ basis to be subject to a recoverable amount

test.

� The new Standards introduce a new category of assets titled ‘Assets Classified as Held for Sale’

assets which must be presented separately from other assets in the balance sheet.

� There is an additional category of inventories for not-for-profi t entities titled ‘Inventories Held for

Distribution’. These are measured at the lower of cost and current replacement cost, and expensed

when the goods are distributed.

� There is a new Standard applying to intangible assets whereas previously there was no one Australian

Standard that comprehensively addressed intangible assets. Some intangible assets that may currently

be recognised by agencies, such as capitalised research and development expenditure, and internally

generated intangible assets, may not meet the recognition criteria in the new Standard and will need

to be derecognised on transition to IFRS.

Liabilities

Agencies that have employee benefits such as salaries and wages, sick leave and annual leave that are

payable 12 months or later after the reporting date must be measured at present value (ie on a discounted

basis), rather than at nominal amounts in all circumstances as required under the current Standards.




Financial Instruments

� The choice under the current Standard of disclosing either the effective interest rate or the weighted average

effective interest rate no longer exists under the new Standard. The effective interest rate must now be

disclosed.

� There are additional disclosures required under the new Standard on a number of topics that are not addressed

in the current Standard.

Income Tax Accounting

The new Standard will impact those agencies subject to the National Tax Equivalent Regime (NTER) and the Western

Australian Tax Equivalent Regime (TER).

The Standard adopts a ‘balance sheet’ approach under which temporary differences are identified for each asset and

liability, rather than accounting for the effects of timing and permanent differences between taxable and accounting

profit under the current Standard.

Ongoing Implementation of IFRS DTF has completed a gap analysis of all Australian equivalents to IFRS to highlight the differences from the current

Australian Accounting Standards. This analysis has been made available to agencies via DTF’s website. DTF has

also conducted a number of forums for agencies to assist them through the transition period.

In July 2004, agencies were provided with an updated checklist to self-assess their progress in the transition to IFRS.

This updated checklist covered:

� establishing an overall monitoring body or working group to oversee the transition

� identifying those new standards expected to have the greatest impact in terms of the agency’s accounting and

fi nancial reporting

� whether accounting and computerised information systems are capable of capturing accounting transactions

and other information required for IFRS reporting.

The completed checklists have been reviewed as part of the current audit and issues arising discussed with the

agencies. Audit’s preliminary assessment indicates that the overall agencies have made satisfactory progress in

preparation for IFRS implementation.


Part 2: Performance Examination of Management of Natural Resource Management Funding

Overview Six regional natural resource management (NRM) groups have, since March 2003, been the key recipients of

approximately $13.5 million of State and Commonwealth bilateral funding. Funding has been provided to the groups

to develop regional NRM strategies and investment plans and for priority projects. The strategies and plans are to be

accredited before the groups receive further funding to invest in their regions.

The State through the Department of Agriculture (the Department) has the responsibility to make sure the groups are

capable of effectively managing the up to $400 million that they will receive and distribute on NRM projects over

the next four years.

Key Findings � Management of pre-accreditation funding by the Department has been adequate, though imminent funding

increases will require more rigorous arrangements.

� The State and the regional groups both recognise that current governance arrangements within the groups need

to be strengthened to reflect the significant increase in NRM funding that will be made to them over the next

four years. Whilst contractual agreements with the groups are being strengthened prior to funding increases,

issues relating to governance structures, the capacity of the groups to meet higher governance standards and

the need for the Department to obtain greater assurance that public moneys are spent appropriately are yet to be

resolved.

What Should Be Done The Department in consultation with the regional groups should:

� give high priority to ensuring appropriate governance arrangements are in place within the groups by the time

that post-accreditation funding commences.

� develop an appropriate process to obtain reasonable assurance of the reliability of financial and output reports

provided by recipients of funding.

Background Management of the State’s natural resources impacts on the economic, social and environmental well-being of all

Western Australians with a number of significant challenges being faced, including:

� approximately 1.8 million hectares (10 per cent) of WA’s south-west agricultural region is affected by salinity

� 36 per cent of the south-west's divertible surface water resource has become brackish or saline and can no

longer be used

� without intervention, scientists predict that 450 plant species endemic to the south-west agricultural region will

become extinct and three-quarters of the region's waterbird species will severely decline.




In March 2003, the State and Commonwealth governments signed a bilateral agreement committing

$83 million towards implementation of NRM programs under the Natural Heritage Trust (NHT). In

September 2003, a second bilateral agreement was signed, committing $316 million to implementing

NRM programs under the National Action Plan for Salinity and Water Quality (NAP).

The bilateral agreements represent a significant shift from previous NHT and NAP funding which focused

on a large number of often unrelated projects run by many individual community landcare or catchment

groups. The new agreements take a more strategic approach to funding priority NRM issues by recognising

the lead role of six regional NRM groups in delivering NRM programs. Refer Figure 1.

Cabinet Standing Committee

on NRM and Salinity

NRM Ministerial Council (States,

Natural Resource

Managment Council

Joint State/Commonwealth

Steering Committee

Regional

NRM Chairs

State NRM

Investment

Committee

NRM Senior

Group

NRM

Directors

General

Local Government

�

�

� Rangelands NRM Coordinating

Group (Interim)

� South Coast Regional Initiative

�

� Swan Catchment Council

pages/council.htm)

� Department of

Conservation and Land

Management

� Department of

Environment

� Department of Planning

and Infrastructure

� Department of Fisheries

� Forests Products

Commission

Department of

Territories and Commonwealth)

Offi cer’s

and NGO’s

Regional NRM Groups

Avon Catchment Council

(www.avonicm.org.au)

Northern Agricultural Catchments

Council (www.nace.com.au)

Planning Team

(www.script.asn.au)

South West Catchments Council

(www.swcatchmentscouncil.com)

(www.wre.wa.gov.au/swanavon/

Other State NRM Agencies

Agriculture

State NRM Offi ce

Figure 1. Schematic representation of NRM management structure in WA (adapted from NRM Council

Website)


PART 2: PERFORMANCE EXAMINATION OF MANAGEMENT OF NATURAL RESOURCE MANAGEMENT FUNDING (continued)

Since June 2003, the six groups have received $7.1 million for Foundation Funding to help develop

regional NRM strategies and investment plans and $6.4 million to fund Priority Projects across the

regions.

All of the regional NRM groups are expected to have accredited regional NRM strategies and investment

plans by mid 2005. Accreditation is provided by the Commonwealth/State NRM Ministerial Council.

Following accreditation, each of the groups will be responsible for funding NRM projects in their regions

ranging from $3 million to $23 million each year for the next four years.

The Department of Agriculture is the State’s lead agency for managing the Bilateral Agreements. Cabinet

has established the State NRM Office within the Department to coordinate implementation of the

agreements and administration of funds.

What Did We Do? We reviewed the progress made towards implementing the NHT and NAP bilateral agreements. The

examination was undertaken at the Department but also involved discussions with and visits to four of

the regional groups. The focus of the examination was on the control and accountability arrangements

covering:

� establishment and function of regional NRM groups and advisory committees

� management and delivery of Foundation Funding and Priority Action Projects.

What Did We Find?

Establishment of the Regional NRM Groups

The bilateral agreements place a responsibility on the State to ensure that each regional NRM group is

properly constituted and has the skills and capacity to fulfil their functions. A high standard of governance

is essential given that each of the six groups will be managing between $3 million to $23 million per year

for the next four years.

We found that the State and the regional groups have not yet agreed on the appropriate governance

arrangements that the Groups need to have in place to ensure probity and effective and accountable

management, such as in the areas of financial and human resource management contracting and

procurement. Nor has there been agreement on the most effective way for the State to ensure that the

groups have the ongoing skills and capacity to effectively manage the expected funding.

All of the groups are incorporated associations as required by the bilateral agreements, though this places

only minimal governance obligations upon them. However, the Department is currently investigating

alternative arrangements such as establishing the groups as statutory authorities which would require




them to meet public sector standards of administration and governance. We noted that such a situation exists in New

South Wales, Victoria and South Australia where regional groups are managing similar amounts of public money.

In June 2004, the Cabinet Standing Committee on NRM and Salinity directed the Department to put in place

governance processes with the groups that will ensure accountability and appropriate use of State funds. This is to be

done via a three stage process:

1. Formally endorse the six regional NRM groups identified under the bilateral agreements as the regional groups

that will achieve effective NRM outcomes under the NHT and NAP programs.

2. Put in place contracts which address the issue of accountability, financial and information management, human

resource practices, purchasing and contracting.

3. Develop a consultative model to identify the best long term framework for the delivery of a regionally based

NRM program. This will determine whether a legislative model is most appropriate.

Stage One has been completed. Stage Two is currently underway and is likely to be completed by the end of 2004

though it will take some time before the groups have the capacity to fully comply with the contractual requirements.

Stage Three is expected to result in a recommendation to Government by mid 2005.

Concurrent with the above process, the Department is developing a capacity building program for the regional

groups. Implementation of the program is subject to securing funding from NHT or NAP programs. If funded,

implementation should commence by the end of 2004.

Management and Delivery of Foundation Funding and Priority Action Projects

The State NRM office manages the distribution of funds to the regional groups, including contracts and fi nancial and

progress reporting. We found these processes were well managed:

� contracts are in place with all groups for Foundation Funding and Priority Action Projects

� groups are submitting quarterly and half yearly financial and progress reports in a timely manner

� variations to contracts are being negotiated and processed in a timely manner.

However, there is no process in place to provide assurance that the financial and output reports submitted by the

recipients of priority action funding and the regional groups are reliable. Obtaining reasonable assurance is a normal

requirement of government funding of the not-for-profit sector but it was evident during visits to some of the groups

that such assurance may be difficult to obtain. For instance, one of the regional groups advised that whilst its accounts

are audited, its financial systems do not support the allocation of expenditure against outputs. Consequently it is not

able to report and actively manage the expenditure on its separate outputs, such as a community consultation project

for which it had received $200 000 in June 2003.


PART 2: PERFORMANCE EXAMINATION OF MANAGEMENT OF NATURAL RESOURCE MANAGEMENT FUNDING (continued)

Such a process should be incorporated into the State’s Monitoring and Evaluation Implementation Plan that

was signed off by the Joint State Commonwealth Steering Committee in March 2004. The plan identifi es

four levels of reporting by funding recipients which could be the basis of some level of verifi cation:

� financial activity compared to budget

� short term outputs and activities accomplished compared to targets

� management actions completed compared to targets

� resource condition and progress in achieving resource condition targets.

The plan also identifies the need for a schedule of evaluations at the State and Regional level. This

schedule is yet to be developed, but will assess the effectiveness, efficiency and appropriateness of the

State and Regional programs.

The Department has advised that the State NRM office is in the process of securing additional resources

which will be applied to addressing the above issues.




Appendix 1:Summary of Audit Opinions Issued

Audit opinions issued for 169 financial statement and 127 performance indicator audits completed at November 1,

2004 for 2003-04 are summarised in the following table. The audit opinion, issued to the responsible Minister for

each government agency, is tabled in Parliament by the Minister and printed in full in the agency’s annual report and

on its website.

Results of annual audits of government agencies and other entities are shown in the following table under one of two

categories:

The Legislature

This category includes the results of the three parliamentary departments.

Ministerial Portfolios

The Government of the day assigns responsibility for the administration of government agencies to individual

Ministers and the results of audits conducted under the FAAA are reported on this basis.

The results of other audits involving financial statements only are also reported under this category with:

� subsidiary bodies, conducted under the Corporations Act 2001, recorded with the related agency

� boards under the Cemeteries Act recorded under the Minister for Local Government

� request audits under section 78 of the FAAA recorded under the Treasurer.

Key to Table of Audit Opinions

The table lists each agency audited and whether the opinion was qualified or unqualified for both its controls and

financial statements and performance indicators and the date the opinion was issued. Agencies’ names are listed

alphabetically without “The” in their statutory names.

The following symbols are used in the Ministerial Portfolio table:

� unqualifi ed opinion

N/A opinion is not applicable as performance indicators are not required to be submitted

* extension of time was granted by Minister for submission of fi nancial statements and

performance indicators

** late submission of certifi ed financial statements and, where applicable, performance indicators

Table 1: Symbols in Ministerial Portfolio table

The details of each qualification are shown earlier in this report at Table 2 (for financial statements and controls) and

Table 3 (for performance indicators).

Unless otherwise noted, audit opinions relate to the reporting period July 1, 2003 to June 30, 2004. Performance

indicators are only required for departments and statutory authorities reporting under the FAAA. These opinions are

issued on the same date as the financial statement audit opinions.


�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

APPENDIX 1: SUMMARY OF AUDIT OPINIONS ISSUED (continued)

The Legislature

Audit Opinions

Financial

Statements and Performance

Indicators

Date Opinion

Issued

Administration of the Legislative Council

Administration of the Joint House Committee

Parliamentary Departments

Controls

Administration of the Legislative Assembly

Ministerial Portfolios

Not Submitted 06/08/2004



Premier; Minister for Public Sector Management; Federal Affairs; Science; Citizenship and Multicultural Interests

Audit Opinions

Financial


Indicators

Date Opinion

Issued

Anti-Corruption Commission

Corruption and Crime Commission (01/01/04 – 30/06/04)

Department of the Premier and Cabinet

Investigations

Controls

(Final Audit: 01/07/03 – 26/05/04)

Governor’s Establishment

Office of the Public Sector Standards Commissioner

Parliamentary Commissioner for Administrative

Royal Commission into Whether There Has Been Any

Corrupt Or Criminal Conduct By Western Australian Police

Offi cers (Final Audit)

Deputy Premier; Treasurer; Minister for Energy

Not Required

Not Submitted

�

�

�

�

Not Submitted

Audit Opinions

Financial


Indicators

Date Opinion

Issued

�

�

�

Not Submitted

N/A

�

�

N/A

N/A

Controls

16/08/2004

23/09/2004

29/09/2004

13/10/2004

07/09/2004

30/09/2004

29/07/2004

13/10/2004

01/11/2004

30/09/2004

01/11/2004

29/10/2004

01/11/2004

27/08/2004

17/09/2004

26/09/2004

Department of Treasury and Finance

Economic Regulation Authority (01/01/04 – 30/06/04)

Office of Energy

Perth International Centre for Application of Solar Energy

Treasurer’s Annual Statements

Western Australian Gas Disputes Arbitrator

Western Australian Treasury Corporation

Western Power Corporation

Subsidiary: Wind Energy Corporation Pty Ltd




Deputy Premier; Treasurer; Minister for Energy (continued)

Audit Opinions

Financial


Indicators

Date Opinion

IssuedControls

Request Audits

Aberdeen Unit Trust � N/A 16/09/2004

Beverley Frail Aged Lodge (Inc.) Not Submitted

(Treasurer’s rescission of request audit dated 30/09/04

requires final audit for period 01/07/00 – 01/06/01)

Consolidated Financial Statements for the State � N/A 01/11/2004

of Western Australia

Curtin University of Technology Superannuation � N/A 29/10/2004

Scheme 1968-1993

Director of Legal Aid and Others in Trust � N/A 30/07/2004

Foundation for Advanced Medical Research Inc Audit in Progress

Friends of the KEMH Inc Not Submitted

Ngala Inc � N/A 02/09/2004

Poongsan Perth Mint Joint Venture Audit in Progress

SB Investment Trust � N/A 23/09/2004

South West Cogeneration Joint Venture � N/A 28/10/2004

Swan Bells Foundation Incorporated � N/A 22/10/2004

Tertiary Institutions Service Centre (Inc) � N/A 25/10/2004

Minister for Agriculture, Forestry and Fisheries; the Midwest, Wheatbelt and Great Southern

Audit Opinions

Financial


Indicators

Date Opinion

Issued

Agriculture Produce Commission

Department of Fisheries

Forest Products Commission

Great Southern Development Commission

Committee

(01/08/03 – 31/07/04)

Rural Business Development Corporation

**

Wheatbelt Development Commission

Controls

Agricultural Practices Board of Western Australia

Agriculture Protection Board of Western Australia

Department of Agriculture

Landcare Trust

Mid West Development Commission

Perth Market Authority

Potato Growing Industry Trust Fund Advisory

Potato Marketing Corporation of Western Australia

Subsidiary: Fresh Western Pty Ltd

Poultry Industry Trust Fund Committee

Western Australian Egg Marketing Board

Western Australian Meat Industry Authority

� � 17/09/2004

� � 15/10/2004

� � 29/10/2004

� � 29/09/2004

� � 09/09/2004

� � 24/09/2004

� � 24/09/2004

� � 17/09/2004

� � 21/10/2004

� � 17/09/2004

� � 17/09/2004

Audit in Progress

Audit in Progress

� � 30/09/2004

� � 14/10/2004

� � 07/10/2004

� � 25/10/2004

� � 28/09/2004


� � � � � �

� � �

� � � �

� � � �

� � �

� �

� �

� �


Minister for Consumer and Employment Protection; Indigenous Affairs; Minister Assisting the Minister for Public Sector Management

Audit Opinions

Financial


Indicators

Date Opinion

IssuedControls


� 23/09/2004

� 13/10/2004

� 30/09/2004

� 30/09/2004

� 17/08/2004

� 27/08/2004

� 27/08/2004

� 27/08/2004

Audit Opinions

Financial


Indicators

Date Opinion

Issued

� 08/10/2004

� 08/10/2004

� 30/09/2004

� 30/09/2004

Audit in Progress

� 26/08/2004

� 17/08/2004

� � 30/09/2004

Audit in Progress

� 15/10/2004

� 28/09/2004

� 28/09/2004

Audit in Progress

Not Submitted

� 25/10/2004

� 28/09/2004

Audit in Progress

Audit in Progress

� 20/09/2004

� 26/10/2004

� 08/09/2004

� 28/09/2004

Controls

01/11/2004

Not Submitted

Aboriginal Affairs Planning Authority

Building and Construction Industry Training Board

Construction Industry Long Service Leave Payments Board

Department of Consumer and Employment Protection

Department of Indigenous Affairs *

Department of the Registrar, Western Australian

Industrial Relations Commission

Real Estate and Business Agents Supervisory Board

Settlement Agents Supervisory Board

Workers’ Compensation and Rehabilitation Commission

Attorney General; Minister for Health; Electoral Affairs

Animal Resources Authority

Commissioner for Equal Opportunity

Department of Health

Department of Justice

Hawthorn Hospital

Law Reform Commission of Western Australia

Legal Aid Commission of Western Australia

Legal Contribution Trust (01/01/04 – 30/06/04) **

Legal Costs Committee

Local Health Authorities Analytical Committee *

Minister for Health in his capacity as the Deemed

Board of Metropolitan Public Hospitals

Office of Health Review

Office of the Director of Public Prosecutions

Office of the Information Commissioner

Peel Health Services

Professional Standards Council (01/01/03 – 31/12/03)

Quadriplegic Centre Board

Queen Elizabeth II Medical Centre Trust

South West Health Board

WA Country Health Service

Western Australian Alcohol and Drug Authority

Western Australian Centre for Pathology and

Medical Research

Western Australian Electoral Commission

Western Australian Health Promotion Foundation




Minister for the Environment

Audit Opinions Financial

Statements and Performance Indicators

Date Opinion Issued

� � 29/10/2004

Controls

Botanic Gardens and Parks Authority

Bunbury Water Board Busselton Water Board **Department of Conservation and Land Management Department of Environment Keep Australia Beautiful Council (WA) Swan River Trust Water and Rivers Commission Zoological Parks Authority

� � 01/11/2004

� � 01/11/2004

� � 30/09/2004

� � 15/10/2004

� � 27/09/2004

� � 18/10/2004

� � 11/10/2004

� � 29/09/2004

Minister for Police and Emergency Services; Justice; Community Safety



Date Opinion IssuedControls

Fire and Emergency Services Authority of WesternAustralia

Fire and Emergency Services Superannuation Board Office of the Inspector of Custodial Services Parliamentary Inspector of the Corruption and Crime

Commission (01/01/04 – 30/06/04)Police Service Public Trustee

� � 12/10/2004

� � 27/10/2004

� � 10/08/2004

� Not Submitted 24/09/2004

� � 17/09/2004

� � 28/09/2004

Minister for Planning and Infrastructure



Date Opinion IssuedControls

Albany Port Authority

Armadale Redevelopment Authority

Broome Port Authority

Bunbury Port Authority

Commissioner of Main Roads

Subsidiary: Tarolinta Pty Ltd

Dampier Port Authority

Department for Planning and Infrastructure

East Perth Redevelopment Authority

Eastern Goldfi elds Transport Board

Esperance Port Authority

Fremantle Port Authority

Geraldton Port Authority

Midland Redevelopment Authority

Port Hedland Port Authority

Public Transport Authority of Western Australia

Subiaco Redevelopment Authority

Western Australian Coastal Shipping Commission

Western Australian Land Authority

Western Australian Planning Commission

� N/A 30/09/2004

� � 01/11/2004

� N/A 27/09/2004

� N/A 27/08/2004

� � 16/09/2004 � N/A 16/09/2004

� N/A 22/09/2004

� � 30/09/2004

� � 18/10/2004

Audit in Progress

� N/A 10/09/2004

� N/A 31/08/2004

� N/A 27/09/2004

� � 29/10/2004

� N/A 27/09/2004

� � 24/09/2004

� � 18/10/2004

� � 29/10/2004

� � 27/08/2004

� � 01/10/2004



Minister for State Development

Audit Opinions

Financial


Indicators

Date Opinion

Issued

Coal Industry Superannuation Board � � 18/10/2004

Controls

Coal Miners’ Welfare Board of Western Australia **Department of Industry and Resources Minerals and Energy Research Institute of Western Australia

� � 25/10/2004

� � 30/09/2004

� � 29/10/2004

Minister for Education and Training

Audit Opinions

Financial


Indicators

Date Opinion

Issued

� � 13/10/2004

Controls

Country High School Hostels Authority

Curriculum Council Department of Education and Training Department of Education Services Trustees of the Public Education Endowment WANMTC Pty Ltd (Central TAFE subsidiary)

(01/01/2001 – 31/12/2001)

(01/01/2002 – 31/12/2002)

(01/01/2003 – 31/12/2003)

� � 09/09/2004

� � 15/10/2004

� Qualifi cation 23/09/2004

� � 01/09/2004

� N/A 03/09/2004

� N/A 03/09/2004

� N/A 03/09/2004

Minister for Community Development; Women’s Interests, Seniors and Youth; Disability Services; Culture and the Arts

Audit Opinions

Financial


Indicators

Date Opinion

IssuedControls

Board of the Art Gallery of Western Australia

Department for Community Development

Department of Culture and the Arts

Disability Services Commission

Library Board of Western Australia

Perth Theatre Trust

Screen West (Inc)

Western Australian Museum

� � 08/09/2004

� � 30/09/2004

� � 27/09/2004

� � 25/08/2004

� � 15/10/2004

� � 27/10/2004

� � 18/10/2004

� � 25/10/2004




Minister for Tourism; Small Business; Sport and Recreation; Peel and the South West

Financial Audit Opinions Statements and Performance Date Opinion

Controls Indicators Issued

Department of Sport and Recreation Peel Development Commission Recreation Camps and Reserve Board Rottnest Island Authority Small Business Development Corporation South West Development Commission Western Australian Boxing Commission Western Australian Institute of Sport Western Australian Sports Centre Trust Western Australian Tourism Commission

� � 17/09/2004

� � 13/08/2004

� � 17/09/2004

Qualifi cation � 08/10/2004

� � 30/09/2004

� � 24/09/2004

� � 17/09/2004

� � 23/09/2004

� � 23/09/2004

� � 15/10/2004

Minister for Housing and Works; Racing and Gaming; Government Enterprises; Land Information

Financial Audit Opinions Statements and Performance Date Opinion

Controls Indicators Issued

Burswood Park Board Country Housing Authority Department of Housing and Works Department of Land Information Department of Racing, Gaming and Liquor Gaming and Wagering Commission of Western Australia Gold Corporation Government Employees’ Housing Authority Government Employees Superannuation Board Insurance Commission of Western Australia Lotteries Commission Racing and Wagering Western Australia

(01/08/2003 – 31/07/04)Racing Penalties Appeal Tribunal of Western Australia

(01/08/03 - 31/07/04)State Government Insurance Corporation State Housing Commission

Subsidiaries: Homeswest Loan Scheme Trust

Keystart Bonds Limited Keystart Housing Scheme Trust Keystart Loans Limited Keystart Support (Subsidiary) Pty Ltd Keystart Support Pty Ltd Keystart Support Trust

State Supply Commission Water Corporation Western Australian Building Management Authority Western Australian Greyhound Racing Association

(01/08/03 – 31/07/04)

Audit in Progress

� � 30/08/2004

� � 15/10/2004

� � 08/10/2004

� � 08/09/2004

� � 14/10/2004

� � 11/10/2004

� � 20/09/2004

Qualifi cation � 23/09/2004

� � 27/08/2004

� � 26/08/2004

� � 28/09/2004

� � 20/10/2004

� � 27/08/2004

� � 30/08/2004

� N/A 27/08/2004

� N/A 27/08/2004

� N/A 27/08/2004

� N/A 27/08/2004

� N/A 27/08/2004

� N/A 27/08/2004

� N/A 27/08/2004

� � 29/10/2004

� N/A 26/08/2004

� � 27/09/2004

� � 27/10/2004



Minister for Local Government and Regional Development; Heritage; the Kimberley, Pilbara and Gascoyne; Goldfields-Esperance

Audit Opinions

Financial


Indicators

Date Opinion

IssuedControls

Department of Local Government and Regional Development � � 22/09/2004

Gascoyne Development Commission � � 10/08/2004

Goldfi elds-Esperance Development Commission � � 18/10/2004

Heritage Council of Western Australia � � 29/09/2004

Kimberley Development Commission � � 29/10/2004

Metropolitan Cemeteries Board � � 27/08/2004

National Trust of Australia (W.A.) � � 27/10/2004

Pilbara Development Commission � � 30/09/2004

Cemeteries Act Audits

Cemetery Boards audited under the Cemeteries Act do not

have a statutory date for submitting fi nancial statements.

Details of Cemetery Board audits completed are as follows:

Albany Cemetery Board � N/A 01/11/2004

Bunbury Cemetery Board Audit in Progress

Chowerup Cemetery Board Audit in Progress

Dwellingup Cemetery Board � N/A 01/11/2004

Geraldton Cemetery Board Audit in Progress

Kalgoorlie-Boulder Cemetery Board Audit in Progress

South Caroling Cemetery Board Audit in Progress

Upper Preston-Lowden Cemetery Board Audit in Progress




Appendix 2:Audit Certifications

Audit work is also undertaken throughout the year to certify financial and statistical information produced by

departments and statutory authorities. This assists agencies to discharge conditions of Commonwealth funding,

grants or other legislation. This service to agencies ensures that they meet conditions of their funding agreements in

a timely manner and are in a position to receive ongoing funding or apply for future funding under existing or new

agreements.

The following certifications were completed since May 14, 2004 for activities largely occurring during 2003-04. In

all cases managements’ assertions were confirmed and no adverse reports were issued.

Client Certification Relates to Date Issued

Curtin University of Higher Education Funding Act 1988: Total amount of research income 15/07/2004

Technology reported as: Australian competitive research grants; other public sector research

funding; and industry and other funding for research for year ended 31/12/2003

Department of

Education and

Australian Vocational Education and Training (VET) Management

Information Statistical Standard:

Training - Assessment of 2003 Australian National Training Authority scope and

boundary expenditure during 2003

- Summary of Australian VET management information statistical standard for

VET financial data during 2003.

3/08/2004

&

3/08/2004

Department of Western Australian Department of Education and Training - 10/08/2004

Education and Commonwealth sourced VET Funds: Statement of receipts and payments for

Training year ended 31/12/2003 for Commonwealth sourced vocational education and

training (VET) funds through Australian National Training Authority

Department of Local Government (Financial Assistance) Act 1995: Statements of quarterly 20/09/2004

Local Government payments by State of Western Australia to local government authorities of

and Regional Commonwealth funding to 30/06/2004

Development

Disability Services Commonwealth-State/Territory Disability Agreement: Acquittance of 22/10/2004

Commission revenue and expenditure for the jurisdiction of Western Australia for year ended

30/06/2004

Edith Cowan Higher Education Funding Act 1988: Total amount of research income 30/06/2004

University reported as: Australian competitive research grants; other public sector research


Family Court of Family Law Act 1975: Statement of receipts and payments for year ended 12/10/2004

Western Australia 30/06/2004

Fire and Emergency Natural Disaster Mitigation Programme Agreement: Statement of receipts 29/10/2004

Services Authority and payments for year ended 30/06/2004 by the State under the Agreement

provided to the Commonwealth Department of Transport and Regional Services


APPENDIX 2: AUDIT CERTIFICATIONS (continued)

Client Certification Relates to Date Issued

Fire and Emergency

Services Authority

Natural Disaster Relief Arrangements: Claim by State of Western Australia

for assistance in respect of its budget for outlay during the year ended

30/06/2004

13/10/2004

Murdoch University Higher Education Funding Act 1988: Total amount of research income

reported as: Australian competitive research grants; other public sector research


30/06/2004

Trustee of

Coal Industry

Superannuation

Board

Superannuation Industry (Supervision) Act 1993: Independent audit report on

financial statements and compliance audit of the Coal Industry Superannuation

Board for the year ended 30/06/2004 in the format required for submission to the

Australian Prudential Regulation Authority

25/10/2004

Trustee of the

Curtin University

of Technology

Superannuation

Scheme 1968-1993

Superannuation Industry (Supervision) Act 1993: Independent audit report

on financial statements and compliance audit of the Curtin University of

Technology Superannuation Scheme 1968-1993 for the year ended 30/06/2004

in the format required for submission to the Australian Prudential Regulation

Authority

29/10/2004

Trustee of the Fire

and Emergency

Services

Superannuation

Board

Superannuation Industry (Supervision) Act 1993: Independent audit report on

financial statements and compliance audit of the Fire and Emergency Services

Superannuation Board for the year ended 30/06/2004 in the format required for

submission to the Australian Prudential Regulation Authority

27/10/2004

The University of

Western Australia

Higher Education Funding Act 1988: Total amount of research income

reported as: Australian competitive research grants; other public sector research


28/06/2004

Western Australian

Centre for Remote

and Rural Medicine

Western Australian Centre for Remote and Rural Medicine (WACRRM):

Summary of WACRRM program expenditure 01/07/2003 – 30/06/2004 and

statement of receipts and payments for WACRRM’s Rural Workforce Agency

activities

30/09/2004

Table 1: Certifi cations issued

Source: OAG


C

Appendix 3:Alphabetical Index of Agencies in Report

A Aberdeen Unit Trust 31Aboriginal Affairs Planning Authority 13, 32Agricultural Practices Board of Western Australia 31Agriculture Produce Commission 31Agriculture Protection Board of Western Australia 31Albany Cemetery Board 36Albany Port Authority 19, 33Animal Resources Authority 32Anti-Corruption Commission 30Armadale Redevelopment Authority 33Art Gallery of Western Australia, Board of 34

B Beverley Frail Aged Lodge (Inc.) 31Botanic Gardens and Parks Authority 33Broome Port Authority 19, 33Building and Construction Industry Training Board 32Bunbury Cemetery Board 36Bunbury Port Authority 9, 19, 33Bunbury Water Board 33Burswood Park Board 35Busselton Water Board 33

Chowerup Cemetery Board 36Coal Industry Superannuation Board 34, 38Coal Miners’ Welfare Board of Western Australia 34Commissioner for Equal Opportunity 32Consolidated Financial Statements for the State of Western Australia 31Construction Industry Long Service Leave Payments Board 32Corruption and Crime Commission 30Country High School Hostels Authority 34Country Housing Authority 9, 35Curriculum Council 34Curtin University of Technology 37Curtin University of Technology Superannuation Scheme 1968-1993 31

D Dampier Port Authority 19, 33Department for Community Development 34Department for Planning and Infrastructure 33Department of Agriculture 24, 31Department of Conservation and Land Management 33Department of Consumer and Employment Protection 32Department of Culture and the Arts 34Department of Education and Training 17, 34, 37Department of Education Services 13, 34Department of Environment 33Department of Fisheries 31Department of Health 32Department of Housing and Works 35Department of Indigenous Affairs 32Department of Industry and Resources 34Department of Justice 16, 32Department of Land Information 35Department of Local Government and Regional Development 36, 37Department of Racing, Gaming and Liquor 9, 35

Department of Sport and Recreation 35Department of the Premier and Cabinet 30Department of Treasury and Finance 21, 30Director of Legal Aid and Others in Trust 31Disability Services Commission 9, 34, 37Dwellingup Cemetery Board 36

E Eastern Goldfields Transport Board 33East Perth Redevelopment Authority 9, 33Economic Regulation Authority 30Edith Cowan University 37Esperance Port Authority 19, 33

F Family Court of Western Australia 37Fire and Emergency Services Authority 38Fire and Emergency Services Authority of Western Australia 9, 33Fire and Emergency Services Superannuation Board 33Forest Products Commission 31Foundation for Advanced Medical Research Inc 31Fremantle Port Authority 9, 19, 33Fresh Western Pty Ltd 31Friends of the KEMH Inc 31

G Gaming and Wagering Commission of Western Australia 35Gascoyne Development Commission 36Geraldton Cemetery Board 36Geraldton Port Authority 19, 33Goldfields-Esperance Development Commission 9, 36Gold Corporation 35Government Employees’ Housing Authority 35Government Employees Housing Authority 9Government Employees Superannuation Board 12, 35Governor’s Establishment 30Great Southern Development Commission 31

H Hawthorn Hospital 32Heritage Council of Western Australia 36Homeswest Loan Scheme Trust 35

IInsurance Commission of Western Australia 9, 35

J Joint House Committee 13, 30

K Kalgoorlie-Boulder Cemetery Board 36Keep Australia Beautiful Council (WA) 33Keystart Bonds Limited 35Keystart Housing Scheme Trust 35Keystart Loans Limited 35Keystart Support (Subsidiary) Pty Ltd 35Keystart Support Pty Ltd 35Keystart Support Trust 35Kimberley Development Commission 36


L

APPENDIX 3: ALPHABETICAL INDEX OF AGENCIES IN REPORT (continued)

Law Reform Commission of Western Australia 32Legal Aid Commission of Western Australia 9, 32Legal Contribution Trust 32Legal Costs Committee 32Legislative Assembly 13, 30Legislative Council 13, 30Library Board of Western Australia 34Local Health Authorities Analytical Committee 32Lotteries Commission 9, 35

M Main Roads, Commissioner of 33Metropolitan Cemeteries Board 36Metropolitan Public Hospitals, Minister for Health 32Mid West Development Commission 9, 31Midland Redevelopment Authority 33Minerals and Energy Research Institute of Western Australia 34Murdoch University 38

N National Trust of Australia (WA) 36Ngala Inc 31

O Office of Energy 30Office of Health Review 32Office of the Director of Public Prosecutions 32Office of the Information Commissioner 32Office of the Inspector of Custodial Services 9, 33Office of the Public Sector Standards Commissioner 30

P Parliamentary Commissioner for Administrative Investigations 30Parliamentary Inspector of the Corruption and Crime Commission 33Peel Development Commission 35Peel Health Services 32Perth International Centre for Application of Solar Energy 13, 30Perth Market Authority 31Perth Theatre Trust 34Pilbara Development Commission 36Police Service 9, 33Port Hedland Port Authority 19, 33Potato Growing Industry Trust Fund Advisory Committee 31Potato Marketing Corporation of Western Australia 31Poultry Industry Trust Fund Committee 31Professional Standards Council 32Public Transport Authority of Western Australia 33Public Trustee 33

Q Quadriplegic Centre Board 32Queen Elizabeth II Medical Centre Trust 32

R Racing and Wagering Western Australia 35Racing Penalties Appeal Tribunal of Western Australia 35Real Estate and Business Agents Supervisory Board 9, 32Recreation Camps and Reserve Board 35Rottnest Island Authority 12, 35

Royal Commission into Whether There Has Been Any Corrupt Or Criminal Conduct By Western Australian Police Offi cers 30

Rural Business Development Corporation 31

S SB Investment Trust 31Screen West (Inc) 34Settlement Agents Supervisory Board 9, 32Small Business Development Corporation 9, 35South Caroling Cemetery Board 36South West Cogeneration Joint Venture 31South West Development Commission 9, 35South West Health Board 32State Government Insurance Corporation 35State Housing Commission 9, 16, 35State Supply Commission 35Subiaco Redevelopment Authority 9, 33Swan Bells Foundation Incorporated 31Swan River Trust 33

T Tarolinta Pty Ltd 33Tertiary Institutions Service Centre (Inc) 31Treasurer’s Annual Statements 30Trustees of the Public Education Endowment 34

U University of Western Australia 38Upper Preston-Lowden Cemetery Board 36

W WANMTC Pty Ltd 34Water and Rivers Commission 33Water Corporation 9, 18, 35WA Country Health Service 32Western Australian Alcohol and Drug Authority 32Western Australian Boxing Commission 35Western Australian Building Management Authority 35Western Australian Centre for Pathology and 32Western Australian Centre for Remote and Rural Medicine 38Western Australian Coastal Shipping Commission 33Western Australian Egg Marketing Board 31Western Australian Electoral Commission 32Western Australian Gas Disputes Arbitrator 30Western Australian Greyhound Racing Association 35Western Australian Health Promotion Foundation 32Western Australian Industrial Relations Commission 9, 32Western Australian Institute of Sport 35Western Australian Land Authority 9, 33Western Australian Meat Industry Authority 31Western Australian Museum 34Western Australian Planning Commission 33Western Australian Sports Centre Trust 35Western Australian Tourism Commission 35Western Australian Treasury Corporation 9, 30Western Power 18, 30Wheatbelt Development Commission 31Wind Energy Corporation Pty Ltd 30Workers’ Compensation and Rehabilitation Commission 32

Z Zoological Parks Authority 9, 33


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