Page 4597 - Week 14 - Thursday, 24 November 2005
presented to the Legislative Assembly on 7 December 2004 and subsequently referred to the committee for inquiry. The report summarised the results of the audits of the financial statements of the territory and its agencies in 2003-04 and included comments on significant matters found during those audits. The report represented a departure from previous years, in that the Auditor-General did not make recommendations for the government to consider, providing instead a summary of significant findings.
The committee received a briefing from the Auditor-General on the audit report and sought and received a government submission in relation to the findings in the report. In reporting, the committee considered and assessed the issues raised by the report within the financial auditing context of accountability and governance and in subsequent effective reporting by public sector agencies.
The committee’s report focuses on a selection of the significant issues raised by the Auditor-General and provides a summary of the government’s comments in relation to those. This focus includes the territory’s financial management and reporting, which was found to be deficient in many cases. Too great a number of financial statements were not provided on time and some agencies required assistance from the audit office to bring the reports up to an acceptable standard.
Although the territory’s short-term financial position was strong and in balance, there was some risk of significant deficits in the next three years, should there be adverse fluctuations in revenue and expenses. On this matter, as it has turned out, the Auditor-General was remarkably prescient. The long-term financial position, which is relentlessly deteriorating, is expected by the Auditor-General to decline rapidly over the next few years. Those are her words. The substantial rise in the territory’s unfunded superannuation liabilities and the government’s practice of running down financial assets to fund capital works without budget surpluses is weakening the territory’s financial position. Indeed, at paragraph 2.8 the committee records its concern at the possible adverse impact of continued funding of capital works from current revenue as opposed to exploring the issue of borrowing.
The management of capital works was another area of concern. While showing some improvement in 2003-04 compared with the previous year, the large amount of unspent funds indicated that the management of capital projects needed to be improved. Concern was expressed by the committee that possibly none of the $60 million investment by Actew Corporation in TransACT would be recovered in the short to medium term. On a personal note, I am concerned that those funds will probably never be recovered.
The committee’s report made three recommendations. Recommendation 1 was that agencies take up the Auditor-General’s finding regarding desirability of improvements to processes for the preparation of financial statements; recommendation 2 was that a capital works framework policy be developed to establish a consistent, whole-of-government approach to the monitoring, planning and procurement of capital works; and recommendation 3 was that the Legislative Assembly note the findings of the Auditor-General’s report.
A report such as this does not come to fruition without the hard work and professionalism of a number of people. I would like to thank my committee colleagues, Dr Deb Foskey and Ms Karin MacDonald; those who assisted the committee with its