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INTRODUCTION
Report No 1 was submitted to Parliament in September 1994 and dealt with the audit of the Public Account for the year ended 30 June 1994.
Report No 2 (this Report) deals with Government Departments, Statutory Authorities, Public Health Boards, Marine Boards and Port Authorities, Local Government Authorities and other public bodies together with special comments on various other issues. Unless specifically indicated, the comment in this Report is current as at 18 November 1994.
FORMAT OF THIS REPORT
The format of this Report has been structured on the basis of Ministerial Portfolios existing as at 30 June 1994 with a separate part being devoted to other issues.
At the commencement of each Ministerial Portfolio in Part 2 and at the commencement of Part 3, Key Findings in those sections are outlined for the convenience of the reader.
STATUS OF AUDITS
The majority of audits for the year ended 30 June 1994 have been completed with some exceptions as detailed in the preamble under each Ministerial Portfolio.
PART 1
EXECUTIVE AND LEGISLATURE
The Parliament of Tasmania is comprised of the Crown (represented by the Governor), the Legislative Council and the House of Assembly which collectively form the Legislature.
Appropriation of funds to the Legislature-General Division provides, amongst other matters, for general parliamentary functions including the Parliamentary Catering and Reporting Services. These functions are administered by designated officers of the Parliament and financial transactions are recorded in the financial statements of:-
His Excellency the Governor's Establishment
The Legislative Council
The House of Assembly
The Legislature-General (including the Parliamentary Catering Service)
No specific comments relating to these audits are included in this Report.
Appropriation of funds to the Ministerial and Parliamentary Support Division provides for certain expenses and administrative support of Ministers and other Members of Parliament. The financial transactions of this Division are reported in the financial statements prepared by the Department of Premier and Cabinet.
PART 2
MINISTERIAL DEPARTMENTS AND PUBLIC BODIES
2.1
PREMIER
The Premier is responsible for the administration of the Department of Premier and Cabinet and, under the provisions of the Administrative Arrangements Act 1990, for a number of Acts under which certain bodies are established, of which only the Tsuneichi Fujii Fellowship Trust is subject to audit by the Auditors-General. The audits of the financial statements of the aforementioned entities for the last financial year have been completed. No specific comments relating to these audits are included in this Report.
2.2
MINISTER FOR STATE DEVELOPMENT AND RESOURCES
The Minister for State Development and Resources is responsible for the administration of the Department of State Development and Resources and, under the provisions of the Administrative Arrangements Act 1990, for a number of Acts under which certain bodies are established, of which the following are subject to audit by the Auditor-General:--
Plumbers and Gas Fitters Registration Board
Tasmanian Development Authority
Workers Compensation Board
Workers (Occupational Diseases) Relief Fund Board (1 July 1993 - 31 January 1994)
The audits of the financial statements of the aforementioned entities for the last financial year have been completed. No specific comment relating to these audits is included in this Report.
2.3
MINISTER FOR FORESTS
KEY FINDING
Page
Audit opinion to the Forestry 13
Commission's 1992-93 financial statements
qualified in respect of the method used
to value forests.
During 1993-94 the Minister for Forests was responsible for the administration of the Forestry Commission.
The audit of the 1993-94 financial statements of the Commission has not been completed.
Selected issues arising from the audit are as follows:-
FORESTRY COMMISSION
On page 17 of Report No 2 for 1992-93, it was indicated that the audit of the Commission's 1992-93 financial statements had not been finalised.
Valuation of Forests
The 1992-93 audit has since been completed and my qualified audit report was issued on 30 November 1993. The qualification related to the basis upon which forests were valued in that the method used did not reflect the costs incurred in growing or harvesting the timber. If these factors had been taken into account, the value attributed to the forests in the Commission's financial statements would have been significantly less.
This qualification (and the likelihood of a similar qualification to the 1993-94 financial statements) needs to be considered in the context of the development of accounting standards applicable to forestry operations.
The Australian Accounting Research Foundation has indicated for some time that it intends to publish a Discussion Paper on "Self-Generating and Regenerating Assets". I understand that the Forestry Commission/Corporation has had the opportunity to make comments on a draft of that paper. The publication of that paper and the eventual accounting standard has been put back at least a year. In the absence of a definitive standard, the Commission elected to continue with its previous policy rather than changing with the possibility that it might have to make further changes when the standard was eventually promulgated.
Other matters
Following the completion of the 1992-93 audit, I wrote to the Commission in respect of a number of problems that had been encountered during the audit as follows:-.
absence of reconciliations of various subsidiary ledgers to the general ledger;
lack of consistency in respect of depreciation and capitalisation policies; and
numerous errors and omissions in the preparation of the financial statements.
The Commission has since indicated that the problems arose through the introduction of new systems and that it is taking action in respect of these matters.
Revised financial statements were received on 24 November 1994.
The Forestry Amendment (Forestry Corporation) Act 1994 provides for the establishment of the Forestry Corporation to assume the function of the Commission from 1 July 1994.
2.4
ATTORNEY-GENERAL AND MINISTER FOR JUSTICE
KEY FINDINGS
Page
Outstanding fees and fines in the Court 17
of Petty Sessions are still increasing.
Membership of Public Trust Investment 18
Board not in accordance with legislation.
The Attorney-General and Minister for Justice is responsible for the administration of the Department of Justice and, under the provisions of the Administrative Arrangements Act 1990, for a number of Acts under which certain bodies are established, of which the following are subject to audit by the Auditor-General:--
Council of Law Reporting for Tasmania
Independent Order of Rechabites
Law Reform Commissioner
Legal Aid Commission
Public Trust Office
With the exception of the Legal Aid Commission the audits of the financial statements of the aforementioned entities for the last financial year have been completed.
Selected issues arising from the audits of the above entities are summarised below.
DEPARTMENT OF JUSTICE
Financial Statements
Under Section 40 of the Financial Management and Audit Act 1990, financial statements are required to be forwarded to the Auditor - General by 31 August in each year. Signed statements for 1993-94 were not received by audit until 30 September 1994.
Court of Petty Sessions - Outstanding Fees and Fines
The increasing level of outstanding fees and fines which are owing to the Consolidated Fund was raised in my No 2 Report for 1992-93. The situation has deteriorated further during 1993-94 as shown below.
Outstanding Court Fees and Fines
$
Hobart 30/6/93 1 954 289
30/6/94 2 533 011
Launceston 30/6/93 1 006 813
30/6/94 1 199 883
Devonport 30/6/93 331 286
30/6/94 377 940
Burnie 30/6/93 284 619
30/6/94 336 910
Total 30/6/93 3 577 007
30/6/94 4 447 744
Increase in $870 737
Outstandings
24.3%
In response to audit enquiry regarding this matter, the Department has advised that a new computer system has been implemented statewide and that:
"The new system enables the department to identify the level of fees and fines outstanding, taking into account those situations where the Court has given individuals time to pay and the unpaid portion of the fine is not therefore truly overdue.
The department is examining alternative options for following up unpaid fines and fees in addition to the traditional method of serving warrants."
Valuation and Recording of Assets
Plant and equipment in the Corrective Services Division and furniture throughout the Department had not been included in the 1993-94 financial statements due to the absence of reliable values. It was noted that an exemption from reporting those assets had not been sought from the Department of Treasury and Finance.
The Department has recently advised that it is currently identifying groups of assets and guidelines for valuing assets over $2 000. Valuations of plant, equipment and furniture which meet these guidelines are to be undertaken early in 1995.
Prison Officers Payroll System
A recent report by the Department's Program Review Branch relating to the Prison Officers Payroll System, identified certain system and procedural problems/weaknesses. The Department has indicated that action has been taken to implement recommendations where appropriate.
PUBLIC TRUST OFFICE
Membership of Investment Board
The Public Trust Office Act 1930 requires that the Investment Board consist of:-
The Public Trustee, and
Two members appointed by the Governor.
At the 1992-93 audit the question was raised as to why the Board only had, at that time, one member beside the Public Trustee. As the situation had not changed at the conclusion of the 1993-94 audit I requested the Acting Public Trustee's comments. He replied as follows:-
"The composition of the Board has been raised several times both in writing and verbally with the Department of Justice. To date no arrangements that I am aware of have been made to formalise any appointment".
I believe it is imperative that the Board has a full membership to ensure the Act is being complied with.
I wrote to the Attorney-General on 28 October 1994 informing him of my concern.
LEGAL AID COMMISSION
Financial Statements
Under Section 40 of the Legal Aid Commission Act 1990, financial statements are required to be forwarded to the Auditor - General by 31 August in each year. At the time of finalising this section of the report signed statements for 1993-94 had not been received, although parts have been received in draft form only. A schedule of matters arising from the audit to date has been sent to the Commission and these are due to be discussed shortly.
2.5
MINISTER FOR COMMUNITY AND HEALTH SERVICES
KEY FINDINGS
Page
The Department for Community and Health 21
Services has made a commitment to the
introduction of accrual accounting.
Problems were encountered with the 22
implementation of payroll/personnel
systems.
Financial statements for the Housing 22
Services Program qualified for
non-compliance with the requirement to
depreciate its rental dwelling stock and
non-inclusion of creditors.
The Minister for Community and Health Services is responsible for the administration of the Department of Community and Health Services and, under the provisions of the Administrative Arrangements Act 1990, for a number of Acts under which certain bodies are established, of which the following are subject to audit by the Auditor-General:--
Chiropractors Registration Board
Physiotherapists' Registration Board
Podiatrists Registration Board
Psychologists Registration Board
Radiographers Registration Board
Tasmanian Cancer Committee
Regional Health Boards
With the exception of the Tasmanian Cancer Committee and Psychologists Registration Board the audits of the financial statements of the aforementioned entities for the last financial year have been completed.
Selected issues arising from the audit of the above entities are summarised below.
DEPARTMENT OF COMMUNITY AND HEALTH SERVICES
Move to Accrual Accounting
Following the recent issue of Australian Accounting Standard AAS 29 "Financial Reporting by Government Departments", the Department has indicated its commitment to accrual accounting and the adoption of AAS 29. This transition from cash based to accrual based accounting, which will also involve other departments, is being guided and monitored by a Working Party which includes representatives from the Department of Treasury and Finance and the Tasmanian Audit Office. The Department has its own local steering committee which will oversee the project, which should be complete by the time AAS29 becomes a requirement, that is 1996-97.
Valuation and Recording of Assets
The 1993-94 audit revealed some problems with the recordi...
(the original report was cut off at this point)
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