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NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
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NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
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NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
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NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
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NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
NSW Audit Office - Financial Reports - 2008 - Volume 2 ...
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NSW Audit Office - Financial Reports - 2008 - Volume 2 ...

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  • 1. AUDITOR-GENERAL’S REPORT FINANCIAL AUDITS Volume Two 2008 The Legislative Assembly The Legislative Council Parliament House Parliament House Sydney NSW 2000 Sydney NSW 2000 Pursuant to the Public Finance and Audit Act 1983, I present Volume Two of my 2008 Report. Peter Achterstraat Auditor-General Sydney May 2008
  • 2. GUIDE TO USING THIS VOLUME This volume summarises the results of a number of our financial audits. We have attempted to adopt a ‘plain English’ style of writing. This is not always easy when describing technical issues, but we recognise the diversity of our readership and their needs. This Volume has three sections. Section One incorporates The Legislature. Section Two is divided into ministerial portfolios, each containing one or more government agencies. Each agency’s comment begins with a summary of our Audit Opinion. This is a key result of each audit. An ‘unqualified audit opinion’ means we are satisfied that the agency has prepared its financial report in accordance with Australian Accounting Standards (and other mandatory requirements). It also means we believe the report has no material errors and the scope of our audit has not been limited. If any of these aspects are not met we issue a ‘qualified audit opinion’ and explain why we did this. The next section outlines any Key Issues we identified during the audit. These are matters such as: significant findings or outcomes of the audit any major developments impacting on the agency’s role or activities key repeat findings recommendations to Parliament. The Audit Opinion and the Key Issues sections represent the more important findings. By targeting these sections, readers can quickly understand the major issues facing a particular agency, or glance through a number of reports to assess the financial health of a portfolio. Performance Information cover key financial and operational statistics we have identified that help understand how well the agency is performing. Wherever possible we include comparisons with similar agencies interstate. The next two sections contain analysis of issues we identified during our audit. While many of these will include suggestions for improvement, these are not as significant as the issues outlined in the first two sections of the agency comment. Other Information summarises any other matters noted during the audit of the agency that warrant inclusion in this Report. Financial Information summarises the essential information from each agency’s financial report. While this is sufficient for a broad understanding of the agency’s financial position, readers can access more detailed financial statements in the agency's annual report or website. Agency Activities summarise the agency’s purpose, services, structure, relevant legislation, and its web address. While some ‘agency comments’ in this volume will have all of the headings outlined here, this will vary depending on the size of the organisation and the findings of our audit. The Agency Response appears where the head of an agency does not believe that the commentary in our Report adequately reflects the agency's position or actions taken. As we discuss our proposed comments with agency staff during the drafting process, few agencies ask for a formal response to be included. Section Three refers to Performance Audits tabled or in progress at the time of this report.
  • 3. Contents Significant Items ................................................................................................. iii SPECIAL REVIEW Former Department of Natural Resources .................................................................... vii SECTION ONE – The Legislature Audit of Members’ Additional Entitlements ................................................................... 3 SECTION TWO – Commentary on Government Agencies Minister for Climate Change, Environment and Water ...................................................... 9 Jenolan Caves Reserve Trust ........................................................................... 11 Minister for Education and Training ........................................................................... 13 Universities Overview.................................................................................... 15 Charles Sturt University ................................................................................. 28 Macquarie University..................................................................................... 33 Southern Cross University ............................................................................... 37 The University of Sydney ................................................................................ 40 University of New England .............................................................................. 45 University of New South Wales......................................................................... 49 University of Newcastle ................................................................................. 58 University of Technology, Sydney...................................................................... 62 University of Western Sydney .......................................................................... 66 University of Wollongong................................................................................ 70 Minister for Primary Industries ................................................................................. 77 Game Council of New South Wales .................................................................... 79 New South Wales Grains Board ......................................................................... 81 Minister for Sport and Recreation.............................................................................. 83 Premier............................................................................................................. 85 Treasurer .......................................................................................................... 87 Residual Business Management Corporation ......................................................... 89 SECTION THREE – Performance Auditing Performance Audit Reports Tabled in Parliament since Volume Six of 2007............................ 93 Performance Audits in Progress ................................................................................ 97 i
  • 4. Contents _______________________________________________________________________________________ APPENDICES Appendix 1 – Agencies not reported elsewhere in this Volume.......................................... 101 Appendix 2 - Financial Reports not received by Statutory Date (as at 6 May 2008) ................. 102 Appendix 3 - Financial Reports received but Audit Incomplete by Statutory Date (as at 6 May 2008) ...................................................... 104 Appendix 4 – Erratum .......................................................................................... 107 INDEX ............................................................................................................. 109 ii
  • 5. Significant Items Page Special Review – Former Department of Natural Resources Water management invoices for 2005-06 and 2006-07 totalling approximately vii $15.0 million each year are being issued in stages during 2008. These invoices are issued to water users (largely primary producers) covering regulated, unregulated and groundwater water sources. University Overview Six of the State’s ten universities meet the four Australian benchmarks for university 15 financial performance. The State’s universities now control 124 separate entities increasing the universities’ 24 compliance costs and governance risks. Six universities have been using pre-retirement employment contracts. The 25 universities need to liaise with the Australian Government’s Department of Education, Employment and Workplace Relations on the extent of use of these contracts. Charles Sturt University The expansion of the overseas campus activities has significantly increased the 28 University’s compliance requirements. Macquarie University A private hospital and a clinical services building is to be constructed on the 33 University's campus at a cost of $112 million. The University of Sydney The University's Nicholson and Maclaey Museum assets needs to be revalued. 40 Annual Leave balances for 1,671 academic and general staff exceed the maximum 40 allowed threshold. University of New South Wales The closure of the University’s Singapore campus resulted in the University assuming 50 $47.6 million of UNSW Asia’s liabilities and closure costs in 2007. A number of employment related issues were identified by management requiring 51 ‘Notices of Voluntary Disclosures Pending’ being sent to authorities advising of possible underpayment of taxes and superannuation obligations. The University’s investigation into matters relating to Co-operative Research Centre 52 for Eye Research and Technology started five years ago and is still incomplete. University of Technology, Sydney To increase the University’s oversight of its main subsidiary, Insearch Limited’s Board 62 was reconstituted in 2007 to enhance corporate governance. The University submitted to the Minister of Planning its concept plan to re-zone the 62 Ku-ring-gai campus site to permit a wider range of uses, including residential. iii
  • 6. Significant Items Page Game Council of New South Wales The Council continues to experience challenges in ensuring its ongoing financial 79 viability. iv
  • 7. Special Review Former Department of Natural Resources v
  • 8. Former Department of Natural Resources On 4 October 2007, the Treasurer requested I undertake an investigation of the delay in issuing water management bills by the former Department of Natural Resources. My report is below: On 4 October 2007, you requested I investigate the causes why the former Department of Natural Resources (DNR) and subsequently the Department of Water and Energy (DWE) did not issue water management invoices for the financial year 2005-06 and 2006-07. These invoices would normally have been issued in August/September 2006 and August/September 2007. I have completed my investigation and my findings are below. I provided my draft findings to the individuals who assisted me in my investigation. A chronology of events is included as an Appendix to this letter. Findings Former DNR in October/November 2006 was preparing proposal as via draft Cabinet minutes to waive management charges. Senior Executives of the former DNR were aware, at least from November 2006, that water management invoices had not been issued. Some of these Senior Executives transferred to the DWE in April 2007. Confusion over who made decision to defer invoices. In February 2007 the former DNR advised State Water Corporation that invoicing should commence, although there is no evidence of approval from Senior Management. No common understanding amongst former DNR Senior Executives as to who was responsible to issue invoices. Unable to review documents recording decision at senior levels within the former DNR as records no longer exist or may not have existed. Evidence that the then Director-General was of the view that the former DNR maybe experiencing cash flow issues in January 2007. There is no evidence of the outcome of follow-up by the then Director-General. No clear evidence of former DNR’s decision to invoice separately from State Water. No clear evidence of former DNR’s senior management taking action to resolve outstanding issues and complete invoicing process. Former DNR did not assign to one person the task of project managing the production of separate invoices. Process to establish Biller code and Bpay facility commenced in August 2006 by former DNR and completed by Department of Commerce in late May 2007. There was no formal Service Level Agreement (SLA) between the former DNR and State Water for the 2005-06 billing period. The SLA signed between State Water and DWE in July 2007 trying to cover 2005-06 and 2006-07 billing years contained a number of flaws. State Water experienced computer related difficulties in June 2007 to late July 2007. During this and subsequent periods DWE requested State Water defer invoicing. Last email from DWE 19 September 2007, invoices on hold until further advice from DWE. DWE took initial steps to gain Ministerial approval to issue outstanding invoices prior to your request that this matter be investigated. DWE has created a Chief Financial Officer position as a senior member of the Executive team and created a strengthened Audit and Risk Committee to oversight financial management and reporting within DWE. vii
  • 9. Recommendations Project sponsors ought to be assigned to projects involving system and/or processing changes. Project sponsors need to be at a senior organisational level. Project plans and reporting protocols should be prepared for all projects involving system and/or processing changes All papers submitted to Boards of Management ought to be retained, either in electronic form or hardcopy When departments are dissolved, all key documents ought to be archived. This will help ensure compliance with the State Records Act, 1998 DWE ensures that new governance arrangements are implemented effectively and monitored. Background The former DNR was established in August 2005, following the break-up of the Department of Infrastructure, Planning and Natural Resources which had been created in 2003. I have been advised that the former DNR inherited an operating deficit of around $36.0 million per annum, and strategies were immediately put in place to reduce the operating deficit, including a voluntary redundancy program which resulted in the loss of about 120 staff. The former DIPNR had previously shed approximately 350 staff to the newly created Catchment Management Authorities, and a further 500 staff in an earlier voluntary redundancy program. In 2006-07 the former DNR was restructured. The DWE was established on 27 April 2007. From that date, this Department is responsible for the issue of water management invoices. State Water issued the water management invoices on behalf of the former DNR. This practice goes back to when State Water was a component of the former Department of Land and Water Conservation (DLWC). In 2004-05, State Water collected the monies and determined the portion to be paid to the former DNR. I understand that for a number of years, the flow of funds to the former DNR was slow and difficult to reconcile with the expectations of the former DNR. In 2006, the Independent Pricing and Regulatory Tribunal determined separate charges for State Water and the former DNR. This provided the opportunity to issue invoices separate from those issued by State Water. In broad terms, State Water charges water users to recover its costs in the capturing and storage of water, flood management and other functions specified in the State Water Corporation Act 2004. The former DNR charged water users to recover its costs in constructing, maintaining and operating water management works and other functions specified in the Water Management Act 2000. Each entity’s charges contain both fixed and variable components. I understand that the water management invoices outstanding are for the 2005-06 and 2006-07 water years covering: Regulated Rivers; Unregulated Rivers; and Ground Water sources. Was Senior Management aware that the Water Management Invoices were not issued? From November 2006, Senior Executives of the former DNR were aware that State Water had not issued water management invoices on behalf of the former DNR. The Director-General of the former DNR as well as the Executive Director, Water Management and the Executive Director, Corporate Services were aware the invoices were not issued on time. Employees, including Senior Executives, of the Water Management Branch of the former DNR largely transitioned to the DWE. viii
  • 10. There is confusion if a Senior Executive of the Water Management Branch made the decision to defer issue of the water management invoices in respect of surveyed water users on unregulated rivers. This occurred in early February 2007 when invoicing was deferred until April 2007. This Senior Executive advises us invoicing was not to be deferred, only letters to Council/users surveying water use were not to be sent. In any event, the message to State Water was to defer the issue of these invoices until April 2007. In late February 2007, staff from the former DNR advised State Water that invoicing of all water charges should commence on or immediately after 2 April 2007. The same staff sought approval for this course of action from a Senior Executive of the Water Management Branch prior to communicating with State Water. We found no record of any response from that Senior Executive. The DWE has been working towards issuing the 2005-06 water management invoices. Because issues surrounding the 2005-06 water management invoices were not resolved before August 2007, the 2006-07 water management invoices have not yet been issued. I understand DWE have approval to start issuing invoices in December 2007. Departmental Governance Arrangements The former DNR’s Senior Executives, most interested in the issuing of water management invoices, have no common understanding on who was responsible for issuing the water management invoices. The Executive Director, Water Management is of the view that billing was the responsibility of the former DNR’s Finance Branch. I have evidence of staff within the Water Management Branch communicating with State Water on the invoicing process and the steps involved in invoicing. I also have evidence of Water Management Branch staff communicating with the Finance Branch on establishing Bpay facilities. The former Executive Director, Corporate Services in DNR believes the former DNR’s Finance Branch had no role to play in issuing the water management invoices. My staff were unable to review documents recording the decisions made at senior levels. Where agenda, minutes and papers may have existed, members of the former DNR’s Board of Management informed us that they no longer have copies. My staff spoke to three former DNR Board of Management members and they have no common memory on the existence of meeting papers. The former DNR had a Board of Management which met every two to four weeks. The former DNR’s Board of Management comprised: the Director-General; Executive Director, Water Management; Executive Director, Landscapes and CMA Support; Executive Director; Compliance and Licensing; Executive Director, Science and Information; Executive Director, Corporate Services. Financial Information I have been provided with a former DNR finance report for the nine months ended 31 March 2007. I have been informed the data in this report is indicative of financial reports submitted to the former DNR’s Board of Management. The report is accrual based and made no reference to invoicing difficulties. The report states that income is ‘marginally under budget’. There is evidence which suggests that the then Director-General was aware that the former DNR was experiencing cash flow issues in January 2007. The then Director-General followed up on this issue in January 2007. I have no evidence as to the outcome of that enquiry. The then Director-General informs us that the then Chief Financial Officer’s advice indicated that the former DNR’s revenue was tracking satisfactorily. Senior staff within the former DNR finance team changed in December 2006 and again in April 2007. The loss of senior finance staff did not hinder the resolution of issues surrounding the water management invoices. To some degree, this was compensated by employment stability within the Water Management Branch. The Decision to have Separate Invoices I have no clear evidence of the former DNR’s decision to issue invoices separate from State Water. ix
  • 11. Former DNR staff suggested to my staff that the Independent Pricing and Regulatory Tribunal (IPART) determination for Bulk Water Prices for State Water Corporation and the Water Administration Ministerial Corporation from 1 October 2006 to 30 June 2010 prompted the desire to have separate invoices. IPART issued this report in September 2006. I have copies of emails dated from June 2006 which suggests separate invoices would be a solution to the slow receipt of funds from State Water. State Water and the former DNR discussed issuing separate invoices. These discussions appear to have commenced in June/July 2006. I have no evidence of the former DNR’s senior management taking action to resolve outstanding issues and complete the invoicing process. The former DNR did not assign to one person the task of project managing the production of separate invoices. It took the former DNR some months to establish the appropriate Biller code and Bpay facility. The process to obtain Biller code and Bpay facility appears to have commenced in August 2006. The Department of Commerce (the successor of the former DNR’s Corporate Shared Services) completed the process in late May 2007. Delays in obtaining Biller code and Bpay facility were reported to relevant members of the former DNR’s Board of Management in January 2007. The former DNR’s finance function was split between a service provider and the Department. The service provider, Corporate Shared Services was part of the former DNR. Corporate Shared Services established the Biller code and Bpay facility. The former DNR Finance Manager negotiated the establishment of the facility with middle level staff within the Corporate Shared Services. Other difficulties encountered by the former DNR with separate billings were invoice design, the information flyers and letters to landholders explaining the separate invoices. These documents appear to have been completed at the same time as finalising the Biller code and Bpay facility. The SLA between the former DNR and State Water There was no formal SLA between the former DNR and State Water Corporation for the 2005-06 billing period. A SLA was signed in July 2007 between DWE and State Water Corporation. It tries to cover the 2005-06 and 2006-07 billing years. This SLA has a number of flaws in it. It makes reference to the former DNR and it assigns task responsibilities to a person who did not transition to the newly created DWE in May 2007, some three months before the SLA was signed. The SLA nominated persons to complete various roles. The staff members nominated to complete tasks on behalf of DWE are middle management. DWE advised me that the newly created position of Chief Financial Officer will be accountable for billing in the future. Proposed Waiving of Water Charges Email traffic I have seen suggests that, from August 2006, the former DNR was negotiating with State Water for the water management invoices to be issued. This included October/November 2006 when the former DNR was preparing proposals via draft Cabinet Minutes to waive water management charges for consideration by the government. The proposals to waive water management charges appear to have occupied a number of weeks and staff of the former DNR considered a range of options. Water management invoices were traditionally sent out by State Water in August and September. Some Senior Executives my staff spoke to suggest that the draft proposals to waive water management charges were linked to the invoices not being issued on time. State Water’s Role State Water experienced computer related difficulties in June 2007 until late July 2007. During the period and subsequent periods, DWE requested State Water to defer invoicing. The last email I have from DWE requesting State Water to place the invoicing on hold was 19 September 2007. At that time, the invoicing was on hold until further advice from DWE. x
  • 12. What Action Has Been Taken in Relation to This Matter? The DWE had taken initial steps to gain Ministerial approval for the issuing of outstanding invoices prior to your request that this matter be investigated. In addition the Director-General of DWE has established a small team of senior Departmental officers to resolve the issue of billing of outstanding water charges and budget issues generally. Responsibilities for future financial arrangements have been clarified in DWE by the establishment of a Chief Financial Officer position as a senior member of the Executive team (recruitment action is currently underway) and the creation of a strengthened Audit and Risk Committee to oversight financial management and reporting within DWE. Approval to issue the outstanding invoices has been received, and a fortnightly update on progress in issuing the bills is emailed to the Director-General, Deputy Director-General Water Management and other relevant staff. The lack of clarity in responsibilities regarding invoicing that I have identified in the former DNR have been recognised by the Director-General of DWE, and a series of steps have been put in place to address this previous deficiency. Sources of information Discussions with: Mr Mark Duffy, Director-General, Department of Water and Energy Mr David Harriss, Deputy Director-General, Department of Water and Energy; former DNR Executive Director, Water Management Dr Richard Sheldrake, Deputy Director-General, Department of Environment and Climate Change; former DNR Director-General Mr Kim Alvarez, Director, Department of Water and Energy; former DNR Director, Water Planning and Interstate Programs Mr Glenn Smith, Director, Corporate Services and Review, Department of Commerce; former DNR Executive Director, Corporate Services Documents Various emails from June 2006 to September 2007. Service Level Agreement dated July 2007 Should you have any queries in relation to the above, please do not hesitate to contact me on 9275 7100. Yours sincerely Peter Achterstraat Auditor-General 20 December 2007 xi
  • 13. APPENDIX Date Event September/October 2005 State Water issued the 2004-05 water management invoices June 2006 Discussions between the former DNR and State Water to issue separate invoices commenced August 2006 The former DNR commenced process to establish Biller code and Bpay facility Former DNR staff in discussion with State Water to issue the water management invoices September 2006 IPART issue price determination for separate State Water and Water Administration Ministerial Corporation charges October/November 2006 The former DNR was preparing draft Cabinet minutes to waiver water management invoices November 2006 Director-General of the former DNR knew water management invoices did not issue January 2007 Director-General of the former DNR identified cash flow issues Delays in obtaining Biller code and Bpay facility reported to the former DNR Board of Management Early February 2007 The issue of the water management invoices in respect of surveyed water users on unregulated was deferred Late February 2007 Staff from the former DNR advised State Water to issue the water management invoices from 2 April 2007 March 2007 Director-General and Executive Director, Corporate Services of the former DNR advised by the Chief Financial Officer that the former DNR’s revenue was tracking satisfactorily. April 2007 DWE created May 2007 Biller code and Bpay facilities established June 2007 State Water experienced computer difficulties July 2007 SLA signed to cover the years 2005-06 and 2006-07 August 2007 DWE resolving issues surrounding the late issue of the 2005-06 water management invoices August 2007 DWE receive approval to issue 2006-07 water management invoices and established a timetable to issue 2005-06 water management invoices 19 September 2007 DWE advised State Water to hold off on issuing the 2005-06 water management invoices December 2007 DWE have approval to start issuing invoices xii
  • 14. Section One The Legislature Audit of Members’ Additional Entitlements 1
  • 15. Audit of Members’ Additional Entitlements AUDIT OPINION Members substantially complied with the requirements of the Parliamentary Remuneration Tribunal’s (PRT) Determination for the year ended 30 June 2007. KEY ISSUES Taxi Vouchers We recommend that a declaration stating taxi vouchers will only be used for Parliamentary purposes, should be signed by Members, and an adequate description of the journey always recorded. Members are currently not required to sign a declaration that taxi vouchers are to be used for Parliamentary purposes only. Descriptions on the taxi vouchers issued by the Legislative Assembly were at times not sufficient to establish the purpose of the journey. Sydney Allowance We recommend that the procedures for processing claims should be enhanced to ensure Members who claim the Sydney Allowance submit their refund on a timely basis. The Sydney Allowance is provided to Members who reside in non-metropolitan electorates to compensate for the additional costs associated with staying in Sydney to attend to Parliamentary business. A Member can choose to receive the Sydney Allowance as either an annual fixed allowance or a daily rate. The election is made at the start of each financial year by each member. More Members receiving this entitlement annually submitted their reconciliations on time in 2006-07 compared to the previous year. However, 22 per cent were still late and further improvement is needed. The status of annual reconciliations is as follows: Year ended 30 June Legislative Assembly Legislative Council 2007 2006 2007 2006 Members receiving entitlement on an annual basis 25 21 7 7 Members’ reconciliations submitted on time 21 14 4 1 Source: The Legislature Auditor-General’s Report to Parliament 2008 Volume Two ____________________________________________ 3
  • 16. Audit of Members’ Additional Entitlements __________________________________________________________ OTHER INFORMATION Electorate Mailout Account (EMA) Members of the Legislative Assembly are provided with an annual amount to fund the cost of preparing and distributing newsletters to their electorate. Voter awareness of a Parliamentary Candidate prior to an election can influence the electoral result. The graph below indicates Members of the Legislative Assembly spent their EMA allowance and communicated with their constituents more in the month immediately preceding the election (held in March 2007) than at any other time during 2006-07. Also, because unexpended funds cannot be carried over to the following financial year, it appears that members spent an increased amount of EMA allowance in June of the year preceding the election year. Electoral Mailout Account 2,000 1,500 $'000 1,000 500 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2005-06 2006-07 The PRT determined that Members of the Legislative Assembly are to be provided with an annual amount to fund the preparation and distribution of letters/newsletters to each constituent in their electorate on two occasions each year. Members cannot carry forward unspent entitlements from one financial year to another. Members spent $4.5 million of the total available allocation of $5.7 million for 2006-07. The Role of the PRT The PRT’s principal function is to determine ‘additional’ entitlements available to Members of Parliament. These additional entitlements fall into two categories: allowances: Electorate Allowance Sydney Allowance Committee Allowance fixed allocations: Electorate to Sydney travel Logistic Support Allocation Electorate Mailout Account for Members of the Legislative Assembly Electorate Charter Transport for Members of the Legislative Assembly Travelling allowance for Recognised Office Holders Equipment services and facilities the Legislature pays the additional entitlements where Members incur the actual costs. It can either reimburse the Member or pay third parties (e.g. travel providers) for services to the Member. 4 ____________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 17. __________________________________________________________ Audit of Members’ Additional Entitlements The additional entitlements determined by the PRT are separate to: Members’ annual basic salaries, set by the Parliamentary Remuneration Act 1989 (the Act) additional salaries paid to Ministers and certain other office holders, set out in Schedule 1 of the Act as varying percentages of their basic salaries expense allowances paid to Ministers and certain other office holders, set out in Schedule 1 of the Act as varying percentages of their basic salaries. Audit of Entitlements Each year we audit a sample of Members’ Additional Entitlements and their Sydney Allowances, in accordance with Australian Auditing Standards, to obtain reasonable assurance that payments to Members comply with the provisions of the PRT Determination. Our procedures include examination of evidence supporting individual Member’s claims. Auditor-General’s Report to Parliament 2008 Volume Two ____________________________________________ 5
  • 18. Section Two Commentary on Government Agencies 7
  • 19. Minister for Climate Change, Environment and Water Jenolan Caves Reserve Trust 9
  • 20. Jenolan Caves Reserve Trust AUDIT OPINION The audit of the Trust’s consolidated financial report for the year ended 30 June 2006 resulted in an unqualified Independent Auditor’s Report. The audit of the Trust’s controlled entity, the Jenolan Caves Reserve Trust Division, is not yet complete. The delay in finalisation of the audit resulted from the acquisition of Jenolan Caves House by the Trust, the transfer of various Reserves to another agency and the necessity to obtain independent valuations of certain assets. OTHER ISSUES In January 2004, the Minister appointed an Administrator to the Trust to implement the structural changes recommended by the Council on the Cost and Quality of the Government’s review. Included was the facilitation of the transfer of the administration of the Wombeyan, Abercrombie, Borenore and Jenolan Caves to the then Department of Environment and Conservation. Effective July 2006, certain assets, rights and liabilities of the Trust were transferred to the Director-General, Department of Environment and Climate Change. This included the Wombeyan, Borenore and Abercrombie Karst Conservation Reserves and the non-commercial area of the Jenolan Karst Conservation Reserve. The Trust retains responsibility for the visitor use and service zone pending the adoption of a new plan of management. FINANCIAL INFORMATION Year ended 30 June 2006 2005 $’000 $’000 Revenue 6,432 5,995 Expenses 11,929 6,392 Deficit 5,498 397 Net assets (at 30 June) 20,845 26,342 The main factor in the increase in revenue was higher interest earnings, up $571,000 to $857,000 and an increase in funding from Government which rose by $420,000. This was offset by a fall of $460,000 in grants received. Net assets fell by $5.5 million to $20.8 million. Total assets at $25.7 million were $2.8 million lower than the previous year whilst total liabilities rose by $2.7 million to $4.8 million. Due to the then lessee of Jenolan Caves House, Jenolan Caves Resort Pty Ltd (the Company), encountering difficulties with its funding provider, the mortgagee exercised its rights to possession. Following negotiations an agreement was reached between the Administrator of the Company, the Trust Administrator and St George Bank involving the transfer back to the Trust of the lease and the plant and equipment of Jenolan Caves House. This led to a $6.5 million write-down of the lease receivable. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 11
  • 21. Jenolan Caves Reserve Trust _______________________________________________________________________ TRUST ACTIVITIES The Trust was constituted under the National Parks and Wildlife Act 1974. The principal activities of the Trust were environmental conservation, cave interpretation, and provision of tourism and accommodation facilities at Jenolan, Borenore, Wombeyan and Abercrombie Caves. Its objectives were to conserve the natural and cultural resources of the Jenolan, Abercrombie, Wombeyan, and Borenore Karst Conservation Reserves; and to promote them as leading visitor destinations in a manner that is environmentally, culturally, and commercially sustainable. For further information on the Trust, refer to www.jenolancaves.org.au. CONTROLLED ENTITY Jenolan Caves Reserve Trust Division The Jenolan Caves Reserve Trust Division provides personnel services to the Trust. It assumed responsibility for all employee related expenses and liabilities which are then funded by the Trust as they are required to be paid. The Division will always record a nil result. 12 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 22. Minister for Education and Training Universities Overview Universities: Charles Sturt University Macquarie University Southern Cross University The University of Sydney University of New England University of New South Wales University of Newcastle University of Technology, Sydney University of Western Sydney University of Wollongong Refer to Appendix 1 for: CHEC English Language Centre Technical Education Trust Funds Unilinc Limited 13
  • 23. Universities Overview There are ten universities established under State legislation providing higher education in New South Wales: Charles Sturt University (CSU) University of New South Wales (UNSW) Macquarie University (MU) University of Newcastle (UN) Southern Cross University (SCU) University of Technology, Sydney (UTS) The University of Sydney (TUS) University of Western Sydney (UWS) University of New England (UNE) University of Wollongong (UW). AUDIT OPINION The audits of all ten universities’ 2007 financial reports resulted in unqualified Independent Auditor’s Reports. PERFORMANCE INFORMATION Financial Performance Six of the State’s ten universities meet the four Australian benchmarks for university financial performance. The liquidity of three universities is marginally below the benchmark range. The University of New South Wales recorded the only operating loss and the University of New England is the most reliant on Australian Government funding. The Australian Government’s Department of Education, Employment and Workplace Relations (DEEWR) has identified a number of benchmark indicators for the financial performance of universities. These measures include liquidity, diversity of revenue, employee benefits and on-costs, and operating result. The following table summarises each university’s performance at 31 December 2007 against these benchmarks. University DEEWR Benchmark Achieved Liquidity – current Australian Employee benefits Positive operating ratio between 1.5 Government grants & on-costs result as and 3.0 not more than 50% between 50% - 70% percentage of total of total operating of total operating operating revenue revenue revenue Charles Sturt Yes Yes Yes Yes Macquarie Yes Yes Yes Yes Southern Cross No Yes Yes Yes Sydney Yes Yes Yes Yes New England No No Yes Yes New South Wales No Yes Yes No Newcastle No Yes Yes Yes Technology, Sydney Yes Yes Yes Yes Western Sydney Yes Yes Yes Yes Wollongong Yes Yes Yes Yes Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 15
  • 24. Universities Overview ____________________________________________________________________________ A ‘No’ result indicates the university did not meet the DEEWR benchmark and is performing outside its general better practice guideline. These are discussed in further detail below. The criteria and calculation of these benchmarks are presented in the aggregated tables on pages 21 to 23 of this overview. Liquidity For 2007, three universities did not meet the DEEWR benchmark. DEEWR considers a liquidity ratio of less than 1.5 as being below its general better practice guidelines. Southern Cross University marginally exceeded DEEWR’s upper benchmark of three. Southern Cross University advised us that it has a significant capital works program which will result in the ratio returning to within the better practice range. DEEWR’s benchmark current ratio is based on the traditional formula of current assets divided by current liabilities. Because the definition of current liabilities has changed significantly under Australian Accounting Standards, we have adjusted the balance reported in each university’s financial report to present a more useful measure of their liquidity. The adjustment also allows us to present a ratio that is more consistent with DEEWR’s benchmark liquidity measure. Australian Accounting Standards require an entity to report all unconditional liabilities as current irrespective of when it expects to settle these liabilities. We have excluded long service leave except for what is expected to be settled in the next 12 months. The graph below depicts the trend in all New South Wales universities’ liquidity ratios over the past two years. Liquidity Ratio at 31 December 3.5 3 2.5 2 1.5 1 0.5 0 CSU MU SCU TUS UNE UNSW UN UTS UWS UW 2006 2007 DEEWR better practice liquidity range 16 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 25. _____________________________________________________________________________Universities Overview However, another DEEWR guideline, the Annual Institutional Assessment Framework, suggests a current ratio of more than one is low risk, between 0.75 and one is medium risk, and less than or equal to 0.75 is high risk. Using this benchmark, none of the universities would be considered high risk. Diversity of Revenue One way universities can reduce their financial risks is by diversifying their revenue sources. Each university has a different capacity to generate revenue. Their ability to do so depends on factors such as location, size, perceived standing and student profiles. The breakdown of total university revenue is shown below: Sources of Revenue - at 31 December 100% 90% 20% 20% 19% 21% 22% 80% 70% 26% 28% 29% 26% 25% 60% 50% 16% 15% 14% 14% 15% 40% 30% 20% 39% 36% 39% 39% 39% 10% 0% 2003 2004 2005 2006 2007 Year Australian Government grants HECS payments Fees & charges Other Australian Government grants and HECS have remained fairly constant over the last five years. The declining trend in fees and charges has been offset by increases in other income. A further dissection of revenue is shown below. 2003 2004 2005 2006 2007 $m $m $m $m $m Australian Government grants 1,466 1,421 1,669 1,823 1,957 HECS 591 604 615 679 738 Fees and charges - Student fees - Domestic 170 163 172 177 187 - Student fees - Overseas 612 661 715 728 794 - Consultancy and contracts 191 215 230 260 267 Total fees and charges 973 1,039 1,117 1,165 1,248 Other income - Investment income 110 143 159 230 283 - Other 630 715 728 805 849 Total other income 740 858 887 1,035 1,132 Total operating revenue 3,770 3,922 4,288 4,702 5,075 Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 17
  • 26. Universities Overview ____________________________________________________________________________ Total operating revenue increased by 35 per cent over the last five years. The major source of revenue is Australian Government grants which increased by 33 per cent since 2003. DEEWR expects Australian Government grants to be not much more than 50 per cent of operating revenue. All universities except the University of New England continued to achieve this expectation. In 2007, the Australian government announced its major policy initiatives that included the phasing out of domestic undergraduate full fee paying places from 1 July 2009. Revenue from full fee paying domestic students rose ten per cent over the last five years. For 2007, these fees were four per cent of total operating revenue. Fees and charges increased by 28 per cent over the last five years. Revenue from fee-paying overseas students has increased by 30 per cent over the last five years. For individual universities, revenue from fee-paying overseas students as a percentage of total operating revenue ranged from five per cent to 27 per cent for 2007. Since 2003 there has been a 40 per cent increase in consultancy and contracts revenue. In the same period other income increased by 53 per cent with investment income rising by 157 per cent. Employee Benefits and On-Costs DEEWR monitors the ability of universities to meet essential needs by measuring employee benefits and on-costs as a percentage of total revenue. All ten universities had employee benefits and on-costs within DEEWR’s good practice benchmark of 50 per cent to 70 per cent. Universities ranged between 51 per cent for the University of Sydney to 60 per cent for the University of Western Sydney. Operating Result Although universities are not-for-profit organisations, DEEWR considers the operating result a useful measure of financial performance. Universities had a combined surplus of $386 million in 2007 ($370 million in 2006). More information on their performance is included in individual university comments within this Volume. 18 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 27. _____________________________________________________________________________Universities Overview The graph below illustrates the trend in operating result as a percentage of total operating revenues over the past five years. Nine universities reported a surplus for 2007 (all reported surpluses in 2006). Half the universities improved their results with the biggest improvement in percentage terms being Macquarie University at 246 per cent. This was primarily due to assets being transferred from preceding student organisations. The University of New South Wales was the only University to record a loss, of $6.5 million. This was primarily attributable to the closure of its educational services controlled entity in Singapore (UNSW Asia) and provisioning for other possible employment related taxes and superannuation obligations. Operating Result as % of Total Operating Revenue at 31 December 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 2003 2004 2005 2006 2007 Year As a proportion of operating revenues, the 2007 surpluses ranged from two per cent (University of New England) to 14.3 per cent (The University of Sydney). The increase in overseas student fees and favourable investment performance are the primary factors contributing to the improvement in the universities’ operating results over the past five years. Operational Performance New South Wales universities’ student to academic ratio of 26.7 is the third highest of any jurisdiction. New South Wales university ratios ranged from 20.3 for the University of New South Wales to 35.5 for Southern Cross University. Some universities have expressed concern that this ratio is misleading as it includes students enrolled with partner organisations but not teaching staff of those organisations. Accordingly, the information included within this report should be considered within this context. The ratio of equivalent full-time (EFT) students to full-time equivalent (FTE) academics (excluding staff not involved in teaching) is one indicator of education quality. From a student academic perspective, the lower the ratio the better. However, from a financial viewpoint, a lower ratio may translate into higher total salaries and related costs. This may adversely impact financial performance benchmarks. At the date of preparing this Report, DEEWR statistics for 2007 were not available. Statistics for 2006 show the ratio for more than half of Australia’s university jurisdictions increased. New South Wales universities in aggregate recorded the third highest ratio of all jurisdictions (also third highest in 2005 and 2004). Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 19
  • 28. Universities Overview ____________________________________________________________________________ Jurisdiction Number of EFT FTE Student : Academic Universities Students Academics Ratio 2006 2006 2006 2005 2004 New South Wales 10 201,563 7,532 26.7 25.7 26.0 Victoria 8 182,106 6,788 26.8 26.2 26.5 Queensland 7 131,289 4,762 27.6 28.0 29.1 South Australia 3 48,756 1,970 24.7 24.5 25.4 Western Australia 5 71,006 2,731 26.0 25.5 25.3 Tasmania 1 13,267 537 24.7 24.3 25.6 Northern Territory 1 3,081 173 17.8 18.6 16.8 Australian Capital Territory 2 18,210 898 20.3 22.1 22.3 Source: Australian Government Department of Education, Employment and Workplace Relations. Aggregated Results of Operations, Financial Position and Performance Indicators As in previous years we have eliminated deferred income and deferred expenses for superannuation from the tables. As mentioned previously in this Report, the Australian Accounting Standards require an entity to report all unconditional liabilities as current irrespective of when it expects to settle the liability. We have excluded long service leave except for what is expected to be settled in the next 12 months. The tables on the following pages aggregate the results of operations, financial positions and performance indicators for the universities and their controlled entities. 20 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 29. _____________________________________________________________________________Universities Overview PERFORMANCE INFORMATION Charles Sturt Macquarie Southern Cross Sydney 2007 2006 2007 2006 2007 2006 2007 2006 $m $m $m $m $m $m $m $m Abridged Income Statements (year ended 31 December) Total revenue 297.7 257.3 463.0 415.7 141.3 119.6 1,304.7 1,211.0 Total expenses 265.8 240.8 408.4 399.9 125.2 114.3 1,117.5 1,020.5 Outside equity interest/other -- -- -- -- -- -- -- 0.1 Operating result 31.9 16.5 54.6 15.8 16.1 5.3 187.2 190.6 Abridged Balance Sheets (at 31 December) Total assets 669.1 642.5 1,386.9 1,229.5 221.1 209.7 3,846.7 3,778.9 Total liabilities 125.8 138.4 254.7 281.3 38.5 43.3 616.5 654.4 Net assets 543.3 504.1 1,132.2 948.2 182.6 166.4 3,230.2 3,124.5 Performance Indicators (at 31 December) Current ratio (a) 1.9 1.2 2.1 1.6 3.1 2.0 1.6 1.3 Australian Government grants as a % of total revenue (b) 46.0 41.2 26.2 28.3 46.3 45.5 37.2 38.2 HECS as a % of total revenue (b) 20.0 22.7 12.1 12.3 21.2 22.2 9.8 10.2 Fees and charges as a % of total revenue (b) 16.1 17.5 43.0 45.3 14.5 15.5 19.5 18.4 Employee Benefits and on-costs as a % of total revenue (c) 57.2 58.3 51.7 57.0 53.1 57.3 51.3 49.0 Operating result as a % of total revenue (d) 10.7 6.4 11.8 3.8 11.4 4.4 14.3 15.7 Student numbers – EFT * nya 19,159 nya 20,788 nya 8,870 nya 35,582 Students per academic* nya 33.9 nya 28.9 nya 35.5 nya 22.6 Key: All data except ‘Student numbers’ and ‘Students per academic’ are based on the universities’ financial reports. They reflect the key indicators set out in the February 2000 Department of Education, Employment and Workplace Relations publication ‘Benchmarking: A Manual for Australian Universities’. That publication considers: (a) Current Ratio – an indicator of liquidity. Good practice is a ratio of more than 1.5 to less than three. (b) Diversity of Revenue – Universities should reduce financial risks from reduction or failure of an income source by having three or four major income sources with none below five per cent for any one source and preferably all above 15 per cent. Reliance on Australian Government funding should be decreasing, preferably to not much more than 50 per cent. (c) Employee Benefits and on-costs as a percentage of Total Operating Revenue – Good practice is between 50 per cent and 70 per cent. (d) Operating Result as a percentage of Total Operating Revenue – The essence of good practice is to have a reasonable safety margin that should be positive other than in exceptional years, the rationale for which should be reported in the university’s annual report. * Source: Australian Government Department of Education, Employment and Workplace Relations: Publications – Higher Education Statistics Collection. The academic numbers represent ‘Teaching Only’ and ‘Teaching and Research’. nya Not yet available. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 21
  • 30. Universities Overview ____________________________________________________________________________ New England New South Wales Newcastle Technology, Sydney 2007 2006 2007 2006 2007 2006 2007 2006 $m $m $m $m $m $m $m $m Abridged Income Statements (year ended 31 December) Total revenue 205.9 192.9 1,010.5 948.3 415.0 383.7 464.0 426.1 Total expenses 201.8 189.7 1,016.8 932.5 392.8 348.2 426.8 408.4 Outside equity interest/other -- -- (0.2) -- -- 0.4 0.6 1.3 Operating result 4.1 3.2 (6.5) 15.8 22.2 35.9 37.8 19.0 Abridged Balance Sheets (at 31 December) Total assets 368.8 379.4 2,136.0 1,952.5 975.0 970.0 1,239.6 1,143.4 Total liabilities 135.9 155.2 736.0 721.2 218.3 240.3 280.8 337.9 Net assets 232.9 224.2 1,400.0 1,231.3 756.7 729.7 958.8 805.5 Performance Indicators (at 31 December) Current ratio (a) 1.4 1.5 0.9 0.6 1.2 1.6 1.9 1.4 Australian Government grants as a % of total revenue (b) 51.1 47.4 38.3 39.0 42.7 42.8 32.3 31.7 HECS as a % of total revenue (b) 19.0 19.5 10.1 9.6 17.5 16.3 17.7 17.6 Fees and charges as a % of total revenue (b) 20.4 23.4 30.7 30.1 18.1 19.5 33.9 36.7 Employee Benefits and on-costs as a % of total revenue (c) 55.9 58.7 55.1 58.5 53.3 51.7 55.1 57.5 Operating result as % of total revenue (d) 2.0 1.7 (0.6) 1.7 5.3 9.4 8.2 4.5 Student numbers EFT * nya 9,174 nya 27,289 nya 17,804 nya 23,090 Students per academic* nya 22.4 nya 20.3 nya 28.9 nya 30.7 Key: All data except ‘Student numbers’ and ‘Students per academic’ are based on the universities’ financial reports. They reflect the key indicators set out in the February 2000 Department of Education, Employment and Workplace Relations publication ‘Benchmarking: A Manual for Australian Universities’. That publication considers: (a) Current Ratio – an indicator of liquidity. Good practice is a ratio of more than 1.5 to less than three. (b) Diversity of Revenue – Universities should reduce financial risks from reduction or failure of an income source by having three or four major income sources with none below five per cent for any one source and preferably all above 15 per cent. Reliance on Australian Government funding should be decreasing, preferably to not much more than 50 per cent. (c) Employee Benefits and on-costs as a percentage of Total Operating Revenue – Good practice is between 50 per cent and 70 per cent. (d) Operating Result as a percentage of Total Operating Revenue – The essence of good practice is to have a reasonable safety margin that should be positive other than in exceptional years, the rationale for which should be reported in the university’s annual report. * Source: Australian Government Department of Education, Employment and Workplace Relations: Publications – Higher Education Statistics Collection. The academic numbers represent ‘Teaching Only’ and ‘Teaching and Research’. nya Not yet available. 22 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 31. _____________________________________________________________________________Universities Overview Western Sydney Wollongong Total 2007 2006 2007 2006 2007 2006 $m $m $m $m $m $m Abridged Income Statements (year ended 31 December) Total revenue 422.5 405.9 350.1 341.2 5,074.7 4,701.7 Total expenses 392.8 363.1 341.1 316.7 4,689.1 4,334.0 Outside equity interest/other -- -- 0.1 0.5 0.6 2.2 Operating result 29.7 42.8 9.1 25.0 386.2 369.9 Abridged Balance Sheets (at 31 December) Total assets 1,010.5 879.4 687.0 681.8 12,540.7 11,867.1 Total liabilities 143.7 150.1 156.9 168.0 2,707.1 2,890.1 Net assets 866.8 729.3 530.1 513.8 9,833.6 8,977.0 Performance Indicators (at 31 December) Current ratio (a) 2.0 1.7 2.3 2.6 1.6 1.4 Australian Government grants as a % of total revenue (b) 45.2 44.3 38.9 41.4 38.6 38.8 HECS as a % of total revenue (b) 27.4 26.3 15.1 13.8 14.5 14.4 Fees and charges as a % of total revenue (b) 14.9 17.3 32.7 32.7 25.3 25.9 Employee Benefits and on-costs as a % of total revenue (c) 60.0 55.1 56.5 52.0 54.3 54.4 Operating result as % of total revenue (d) 7.0 10.6 2.6 7.3 7.7 7.9 Student numbers EFT * nya 23,948 nya 15,859 nya 201,563 Students per academic* nya 33.35 nya 27.2 nya 26.7 Key:All data except ‘Student numbers’ and ‘Students per academic’ are based on the universities’ financial reports. They reflect the key indicators set out in the February 2000 Department of Education, Employment and Workplace Relations publication ‘Benchmarking: A Manual for Australian Universities’. That publication considers: (a) Current Ratio – an indicator of liquidity. Good practice is a ratio of more than 1.5 to less than three. (b) Diversity of Revenue – Universities should reduce financial risks from reduction or failure of an income source by having three or four major income sources with none below five per cent for any one source and preferably all above 15 per cent. Reliance on Australian Government funding should be decreasing, preferably to not much more than 50 per cent. (c) Employee Benefits and on-costs as a percentage of Total Operating Revenue – Good practice is between 50 per cent and 70 per cent. (d) Operating Result as a percentage of Total Operating Revenue – The essence of good practice is to have a reasonable safety margin that should be positive other than in exceptional years, the rationale for which should be reported in the university’s annual report. * Source: Australian Government Department of Education, Employment and Workplace Relations: Publications – Higher Education Statistics Collection. The academic numbers represent ‘Teaching Only’ and ‘Teaching and Research’. nya Not yet available. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 23
  • 32. Universities Overview ____________________________________________________________________________ OTHER INFORMATION Our audits highlighted opportunities for universities to improve internal controls. These opportunities have been identified in letters we have issued or will be issuing to university management. We refer to more significant items in individual university comments within this Volume. Controlled Entities We recommend that universities review the need for separate entities to conduct their business with a view to reducing the number required. Compliance costs and governance risks are increasing and university resources would benefit from eliminating unnecessary entities. At 31 December 2007, the universities controlled 124 separate entities as shown in the following table. University Incorporated in Australia Incorporated Overseas Total Operational Dormant* Total Operational Dormant* Total Charles Sturt 8 -- 8 -- -- -- 8 Macquarie 25 1 26 -- -- -- 26 Southern Cross 3 -- 3 -- -- -- 3 Sydney 4 4 8 -- -- -- 8 New England 7 -- 7 -- -- -- 7 New South Wales 15 8 23 8 1 9 32 Newcastle 7 1 8 1 -- 1 9 Technology, Sydney 3 1 4 4 -- 4 8 Western Sydney 11 1 12 -- -- -- 12 Wollongong 8 -- 8 3 -- 3 11 Total 91 16 107 16 1 17 124 * Dormant entities are defined as those with no activity during this financial year. 24 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 33. _____________________________________________________________________________Universities Overview For financial reporting purposes these entities are consolidated into the financial reports of universities. Each entity is required under legislation to prepare a financial report each year and have it audited. Costs involved in complying with legislative requirements are increasing and can be significant. The requirements are not reduced for entities with few or no operations. A dormant company is still required: to prepare a financial report that complies with all appropriate accounting standards; have it audited in compliance with auditing and accounting standards; and ensure other legislative requirements are met. Universities need to consider the need for separate entities due to the compliance costs involved. Universities are exposed to risks from the operations of controlled entities. It is therefore essential that universities have in operation an effective corporate governance framework. This framework would include regular reporting by controlled entities to university finance and audit committees on operations, financial performance, risk and fraud management and compliance with legislation. We assist the universities in their governance role by providing them with the results of our audit for each controlled entity. In recent years we have noted an overall improvement in the level of governance operated by universities over their controlled entities. It is an area that universities need to continually monitor and improve in order to reduce risks created from controlled entities, especially those incorporated overseas. Last year we reported that generally universities complied with the Australian Government’s National Governance Protocols for higher public education institutions for overseeing commercial activities. Pre-Retirement Employment Contracts We recommend management liaise with the Commonwealth Department of Education, Employment and Workplace Relations on the extent of utilising pre-retirement employment contracts with the University’s employees. Six universities have utilised pre-retirement employment contracts from time to time to allow the university and the employee to agree that the employee will give up their status as a continuing employee and enter into a fixed-term contract prior to the employee’s retirement. The employee’s employment with the universities will end on the expiration of the contract. In return for agreeing to enter into this contract the employee receives a salary loading. Fixing the employee’s retirement date assists universities with succession planning. Employees are encouraged to seek superannuation advice when contemplating entering into a pre-retirement contract. It is common for the employees on pre-retirement contracts to be members of New South Wales Public Sector defined benefit superannuation funds. When the universities pay a salary loading under these pre-retirement contracts, it results in higher superannuation benefits to the employees. Funding of these defined benefit superannuation funds is the responsibility of the Australian Government. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 25
  • 34. Universities Overview ____________________________________________________________________________ Non-Current Physical Assets and Capital Works There is inconsistency in reporting property, plant and equipment asset values by universities. Details at 31 December 2007 were: University Measurement Basis Land Gross Buildings Gross Capital Value Value Expenditure Commitments $m $m $m Charles Sturt Fair Value 45.8 366.2 29.9 Macquarie Fair Value 364.3 427.4 164.4 Southern Cross Cost 11.8 125.1 0.2 Sydney Non Commercial – Cost 170.5 977.4 120.6 Commercial – Fair Value 53.6 77.3 13.8 New England Fair Value 18.6 365.4 10.0 New South Wales Fair Value 234.2 1,688.9 126.5 Newcastle Fair Value 35.2 617.7 5.1 Technology, Sydney Fair Value 350.1 1,017.8 9.9 Western Sydney Fair Value 353.5 343.4 15.8 Wollongong Cost 61.1 322.6 43.0 Total 1,698.7 6,329.2 539.2 Three universities continue to measure their major non current physical assets using the cost basis. Whilst there is no prohibition against using the cost method, an inconsistent measurement basis across the universities is not desirable as it diminishes comparability. Capital expenditure commitments reported in 2007 are $539 million. A majority of the universities have significant capital programs over the next few years. The capital expenditure programs are designed to primarily meet the following: improve infrastructure and address backlog maintenance provide suitable accommodation for students and staff replace outdated facilities with modern teaching and research facilities. The source of funding for these capital programs includes: cash flows from operating activities Australian Government grants Non-government grants sale of excess university property negotiated public private partnerships financing arrangements. 26 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 35. _____________________________________________________________________________Universities Overview Impact of Voluntary Student Unionism (VSU) on Universities Voluntary Student Unionism (VSU) came into effect in July 2006 and is governed by the Higher Education Support Act 2003. Under the Act, higher education providers cannot require a student to be a member of a student association, union or guild; and/or a person to pay a compulsory fee for facilities, amenities or services that are not of an academic nature. This financial year marked the first full year without compulsory union fees. Some universities received grants from the VSU transition fund however these funds provided only short term relief to the student unions. In addition to these grants, the universities used other methods of funding student union activities, including: donations taking over operations of student union associations writing off student union association loans provision of rent free accommodation for student union occupied buildings. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 27
  • 36. Charles Sturt University AUDIT OPINION The audits of the University and its continuing controlled entities’ financial reports for the year ended 31 December 2007 resulted in unqualified Independent Auditor’s Reports. Three controlled entities were voluntarily wound up at 31 December 2007 and have been or are being deregistered. They comprised Campus Pre-School Incorporated, Olive Street Services Limited and Rural Australia Foundation Limited. Audit opinions on the financial reports for these entities have not yet been issued. The Crown Solicitor has advised New South Wales Treasury that former directors (or equivalent) of a former statutory body can prepare and submit the financial report but they cannot sign the financial report. As a result, the Auditor-General cannot issue an audit opinion. New South Wales Treasury is investigating ways to overcome this problem. Unless otherwise stated, the following commentary relates to the consolidated entity. KEY ISSUES Investment Risk Management We recommend that the University re-evaluate its risk management strategy for its investment portfolio. At 31 December 2007, the University held investments that it acquired at a cost of $114 million. The continuing stress in the credit market and the resulting impact on the valuation of financial instruments resulted in the value of these investments falling to $106 million at 31 December 2007. The value has fallen a further $5.6 million in the two months to 29 February 2008. The University’s investments included collateralised debt obligations of $35.6 million. Management regards the University’s exposure to collateralised debt obligations as minimal and it intends holding the long term investments to maturity. Overseas Operations We recommend that the University reassess its corporate governance arrangements for its overseas operations. The University should develop policies and procedures to specifically identify and address the taxation, accounting and other obligations of relevant jurisdictions. The overseas campus (established in 2005) continues to grow. It recorded revenue of $5.4 million and a profit of $2.9 million for the year ($2.7 million and $60,000 in 2006). While we have not identified any instances of non compliance, the expansion of activities has significantly increased the University’s compliance requirements. 28 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 37. ___________________________________________________________________________Charles Sturt University The University has engaged a firm of accountants to assist it in meeting taxation and accounting obligations. PERFORMANCE INFORMATION (Comparative performance data on all universities appears in the ‘Universities Overview’ section earlier in this Volume. The information shown below is based on consolidated financial statements.) The University’s current ratio (a measure of its financial liquidity) was 1.9 at 31 December 2007, up from the previous year’s 1.2. At this level it is above the State’s average and the minimum level identified by the Australian Government’s Department of Education, Employment and Workplace Relations (DEEWR) ‘good practice’ parameters. Australian Government grants as a percentage of operating revenue increased, from 41.2 per cent in 2006 to 46 per cent in 2007. This is above the State’s average of 38.6 per cent but continues to be within the DEEWR ‘good practice’ parameters. Employee benefits and on-costs as a percentage of operating revenue decreased from 58.3 per cent in 2006 to 57.2 per cent in 2007. This is higher than the State’s average of 54.3 per cent but within the DEEWR ‘good practice’ parameters. OTHER INFORMATION We identified opportunities for the University to improve existing procedures. We will further discuss them with University staff and where appropriate report them to management. The significant areas include measurement of employee benefits, inventory accounting, inter-entity transactions, capital commitments disclosures and accounting for assets acquisition. Voluntary Student Unionism The University assumed responsibility for providing a number of services previously undertaken by the student union. It has contracted to acquire the assets owned by the union relating to student services at an estimated cost of $7.0 million. System Generated Transactions We recommend the University investigate alternate procedures for efficient reconciliations and clearing of certain ledger accounts. The University’s financial system does not provide sufficient details for certain control accounts resulting in onerous manual review to ensure appropriate reporting. Transactions in these accounts are system generated and have accumulated over a number of years. Management anticipates that the accounting system upgrade planned in 2008 will help resolve these issues. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 29
  • 38. Charles Sturt University___________________________________________________________________________ FINANCIAL INFORMATION The consolidated financial information includes the financial reports of the University and its controlled entities. Abridged Income Statement Year ended 31 December Consolidated Parent 2007 2006 2007 2006 $'000 $'000 $'000 $'000 Australian Government grants 137,083 106,111 137,083 106,111 Higher Education Contribution Scheme 59,577 58,387 59,577 58,387 Fees and charges 47,789 44,994 47,789 44,994 Other 53,241 47,798 50,326 45,212 Deferred income – superannuation (17,618) (21,472) (17,618) (21,472) TOTAL REVENUE 280,072 235,818 277,157 233,232 Employee benefits and on-costs 170,273 150,014 169,164 149,127 Depreciation 20,377 18,612 20,377 18,612 Other 75,183 72,219 74,181 71,294 Deferred expense – superannuation (17,618) (21,472) (17,618) (21,472) TOTAL EXPENSES 248,215 219,373 246,104 217,561 OPERATING RESULT 31,857 16,445 31,053 15,671 Australian Government grants rose principally due to receipt of $18.0 million for setting up a dental faculty. Higher number of students and rate per student contributed to a $7.3 million increase in these grants. There were also one-off grants for Voluntary Student Union Transition ($2.1 million) and Learning and Teaching Performance ($1.5 million). Employee benefits and on-costs rose because of an increase in staff numbers mainly from the Orange Campus transfer in July 2006 and a four per cent rise in award rates. Deferred income and deferred expense reflect movements in the actuarially assessed employee superannuation liability for employees who are members of the State Government’s defined benefit superannuation plans. Because the Australian Government funds these movements, they do not impact the operating result. 30 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 39. ___________________________________________________________________________Charles Sturt University Abridged Balance Sheet At 31 December Consolidated Parent 2007 2006 2007 2006 $'000 $'000 $'000 $'000 Current assets 66,221 37,482 64,319 35,870 Non-current assets 602,869 605,043 596,308 599,338 TOTAL ASSETS 669,090 642,525 660,627 635,208 Current liabilities 51,310 46,368 51,307 46,360 Non-current liabilities 74,438 92,005 74,247 91,848 TOTAL LIABILITIES 125,748 138,373 125,554 138,208 NET ASSETS 543,342 504,152 535,073 497,000 Current assets increased due to increased cash and investments from the improved operating result. Non-current liabilities decreased largely due to a reduction in the deferred Government superannuation liability by $18.0 million. UNIVERSITY ACTIVITIES The University is constituted under the Charles Sturt University Act 1989. It mainly: provides educational and research facilities of university standard disseminates and increases knowledge and promotes scholarship provides distance education for students within New South Wales and elsewhere confers degrees of Bachelor, Master and Doctor and awards diplomas and other certificates develops governance, admission policies, financial arrangements and quality assurance processes that are significant to ensure the integrity of the University’s academic programs exercises commercial functions for the University’s benefit. For further information on the University, refer to www.csu.edu.au. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 31
  • 40. Charles Sturt University___________________________________________________________________________ CONTROLLED ENTITIES The following controlled entities have not been reported on separately as they are not considered material by their size or the nature of their operations to the consolidated entity. Entity Name Website Campus Pre-School Incorporated * Charles Sturt Services Limited * Charles Sturt Foundation Limited (and Trust) www.csu.edu.au/special/foundation Mitchell Services Limited * Olive Street Services Limited * Rivservices Limited * Rural Australia Foundation Limited * Western Research Institute www.wri.org.au * These entities do not have websites 32 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 41. Macquarie University AUDIT OPINION The audits of the University and its controlled entities’ financial reports for the year ended 31 December 2007 resulted in unqualified Independent Auditor’s Reports for the University and the following controlled entities: Access Macquarie Limited Australian Proteome Analysis Facility Limited CMBF Limited LAMS Foundation Limited LAMS International Pty Limited Macquarie Graduate School of Management Pty Limited U@MQ Limited. Unless otherwise stated, the following commentary relates to the consolidated entity. KEY ISSUES The University has, in conjunction with Dalcross Holdings Pty Limited, commenced constructing a 208 bed Private Hospital and Clinical Services block on its campus. The Australian School of Advanced Medicine at Macquarie University is the first medical school in Australia to be linked to a private teaching hospital on a university campus. It will offer advanced sub-specialty training for doctors, particularly in surgery, and is currently accepting enrolments for Masters and PhD programs. The estimated construction cost of these facilities is $112 million. PERFORMANCE INFORMATION (Comparative performance data on all universities appears in the ‘Universities Overview’ section earlier in this Volume. The information shown below is based on consolidated financial statements.) The University’s current ratio (a measure of its financial liquidity) was 2.1 at 31 December 2007. At this level it is higher than the State average of 1.6 and within the Australian Government’s Department of Education, Employment and Workplace Relations (DEEWR) ‘good practice’ parameters. Australian Government grants as a percentage of operating revenue for the year decreased slightly to 26.2 (28.3 in 2006). This is significantly lower than the State’s average of 38.6 per cent and represents the lowest level of reliance on Australian Government grants of all universities. Employee benefits and on-costs as a percentage of operating revenue fell from 57 per cent in 2006 to 51.7 per cent. This is lower than the State’s average of 54.3 per cent but within the DEEWR ‘good practice’ parameters. OTHER INFORMATION We identified opportunities for improvement to accounting and internal control procedures and will report them to management. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 33
  • 42. Macquarie University _____________________________________________________________________________ Investments Due to the financial markets recent movements, the University’s investment portfolio valued at mark to market decreased $6.3 million (5.3 per cent) from $98.7 million in the two months since 31 December 2007. Investments were 12.6 per cent of the total assets held by the consolidated entity as at 31 December 2007. FINANCIAL INFORMATION The consolidated financial information includes the financial reports of the University and its controlled entities. Abridged Income Statements Year ended 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Australian Government grants 121,439 117,432 121,439 117,432 Higher Education Contribution Scheme 56,186 51,180 56,186 51,180 Fees and charges 199,050 188,462 188,010 172,968 Other 86,341 58,577 57,942 55,655 Deferred income – superannuation (23,566) (38,490) (23,566) (38,490) TOTAL REVENUE 439,450 377,161 400,011 358,745 Employee benefits and on-costs 239,355 236,720 213,361 212,992 Depreciation 27,125 26,245 26,477 25,666 Other 141,886 136,962 145,788 143,381 Deferred expense – superannuation (23,566) (38,490) (23,566) (38,490) TOTAL EXPENSES 384,800 361,437 362,060 343,549 OPERATING RESULT 54,650 15,724 37,951 15,196 Other income includes $15.5 million transferred from preceding student organisations. U@MQ Limited, the controlled entity responsible for student services, recognised this income in the current year. The University did not control the preceding student organisations. Deferred income and deferred expense reflect movements in the actuarially assessed liability for employees who are members of the State Government’s defined benefit superannuation plans. Because the Australian Government funds these movements, they do not impact the operating result. 34 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 43. _____________________________________________________________________________ Macquarie University Abridged Balance Sheets At 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Current assets 243,021 179,676 212,771 174,998 Non-current assets 1,143,920 1,049,870 1,143,326 1,047,670 TOTAL ASSETS 1,386,941 1,229,546 1,356,097 1,222,668 Current liabilities 132,993 135,162 121,689 134,827 Non-current liabilities 121,700 146,156 134,939 145,524 TOTAL LIABILITIES 254,693 281,318 256,628 280,351 NET ASSETS 1,132,248 948,228 1,099,469 942,317 Non-current liabilities decreased largely due to a reduction in the deferred State Government’s defined superannuation liability of $22.3 million. Current assets increased largely due to the University holding more cash at year end than the prior year. The cash has been generated from operating activities. UNIVERSITY ACTIVITIES The University is constituted under the Macquarie University Act 1989. It mainly: provides educational facilities at university standard establishes facilities to provide courses of study, gives instruction to and examines external students and provides courses of study or instruction at such levels of attainment as the University’s Council considers appropriate to meet the special requirements of industry, commerce, or any other section of the community disseminates knowledge and promotes scholarship confers degrees of Bachelor, Master and Doctor and awards diplomas and other certificates. For further information on the University, refer to www.mq.edu.au. CONTROLLED ENTITIES Macquarie Graduate School of Management Pty Limited (MGSM) Year ended 31 December 2007 2006 $'000 $'000 Revenue 27,291 27,478 Expenses 25,536 27,468 Profit 1,755 10 Net assets (at 31 December) 4,138 2,383 The company promotes management education and conducts educational programs and research in management. For further information on the School, refer to www.mgsm.edu.au. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 35
  • 44. Macquarie University _____________________________________________________________________________ The following controlled entities have not been reported on separately as they are not considered material by their size or the nature of their operations to the consolidated entity. Entity Name Website Audits Completed Access Macquarie Limited www.access.mq.edu.au Australian Proteome Analysis Facility * Limited CMBF Limited * LAMS Foundation Limited * LAMS International Pty Limited * U@MQ Limited www.uatmq.com.au Audits Incomplete Macquarie University Private Hospital Trust * Macquarie University Property Investment * Company No. 2 Pty Limited Macquarie University Property Investment * Company Pty Limited Macquarie University Property Investment * Trust MU Private Hospital Pty Limited * MU Sub-Trust No. 1 * MU Sub-Trust No. 2 * MU Sub-Trust No. 3 * MU Sub-Trust No. 4 * MUPH Clinic Pty Limited * MUPH Clinic Sub-Trust * MUPH Hospital Pty Limited * MUPH Hospital Sub-Trust * MUPI Holding Trust No. 1 * MUPI Holding Trust No. 2 * MUPI Holding Trust No. 3 * MUPI Holding Trust No. 4 * MUPI Holding Trust No. 5 * MUPI Holding Trust No. 6 * * These entities do not have websites OTHER BODIES ASSOCIATED WITH THE UNIVERSITY The following bodies associated with the University have not been reported on separately as they are not considered material by their size or the nature of their operations. Entity Name Macquarie University Professorial Superannuation Scheme Sydney Educational Broadcasting Limited 36 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 45. Southern Cross University AUDIT OPINION The audits of the University and its controlled entities’ financial reports for the year ended 31 December 2007 resulted in unqualified Independent Auditor’s Reports. Unless otherwise stated, the following commentary relates to the consolidated entity. PERFORMANCE INFORMATION (Comparative performance data on all universities appears in the ‘Universities Overview’ section earlier in this Volume. The information shown below is based on consolidated financial statements.) The University’s current ratio (a measure of its financial liquidity) was 3.1 at 31 December 2007; an increase from the previous year’s two. At this level it is well above the State average of 1.6 and just outside the Australian Government’s Department of Education, Employment and Workplace Relations (DEEWR) ‘good practice’ parameters. Australian Government grants as a percentage of operating revenue increased, from 45.5 per cent in 2006 to 46.3 per cent in 2007. The University has the second highest level of reliance on Australian Government grants of all universities and is significantly higher than the State’s average of 38.6 per cent. Nevertheless it is within the DEEWR ‘good practice’ parameters. Employee benefits and on-costs as a percentage of operating revenue decreased from 57.3 per cent in 2006 to 53.1 per cent in 2007. This is lower than the State’s average of 54.3 per cent but within the DEEWR ‘good practice’ parameters. OTHER INFORMATION We identified opportunities for the University to improve existing procedures. We will further discuss them with University staff and where appropriate report them to management. The more significant areas related to the classification of leases, accounting for research income, preparation and posting of journals, and some matters impacting the University’s general computer control environment. Southern Cross University has recently concluded negotiation with the Gold Coast Airport and is now entering the construction phase of a campus at that site. Students applying to study in Semester One 2009 will be admitted to the current Tweed Heads campus and will be moving into the new Gold Coast campus when the foundation building is completed. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 37
  • 46. Southern Cross University _________________________________________________________________________ FINANCIAL INFORMATION The consolidated financial information includes the financial reports of the University and its controlled entities. Abridged Income Statements Year ended 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Australian Government grants 65,432 54,386 65,432 54,386 Higher Education Contribution Scheme 29,984 26,596 29,984 26,596 Fees and charges 20,501 18,527 20,385 18,527 Other 25,421 20,082 24,603 20,012 Deferred income – superannuation (5,025) (7,463) (5,025) (7,463) TOTAL REVENUE 136,313 112,128 135,379 112,058 Employee benefits and on-costs 75,056 68,572 74,207 68,173 Depreciation 5,687 6,054 5,677 6,048 Other 44,469 39,659 43,872 39,491 Deferred expense – superannuation (5,025) (7,463) (5,025) (7,463) TOTAL EXPENSES 120,187 106,822 118,731 106,249 OPERATING RESULT 16,126 5,306 16,648 5,809 Australian Government grants reflect additional funding received in 2007. In addition to funding for increased student numbers these grants also include non-recurrent amounts totalling $8.8 million for capital development, workplace reform and Voluntary Student Unionism. Following the introduction of Voluntary Student Unionism, Norsearch Limited (a University controlled entity) acquired the former Southern Cross University Union Ltd’s bar, function and catering facilities and gym. Increased student numbers also contributed to the rise in amounts received under the Higher Education Contribution Scheme. Higher international student numbers and amounts received from English language study programs were largely responsible for the rise in fees and charges. Other revenue increased mainly because of higher receipts from Higher Education Loan Programs, State and local government grants, investment income and consultancy and contracts services. Employee benefits and on-costs rose because of increases in award rates and staff numbers and higher employee leave entitlements. Other expenses increased over a number of areas largely relating to minor equipment purchases, property and facilities, software licensing and travel expenditure. Deferred income and deferred expense reflect movements in the actuarially assessed liability for employees who are members of the State Government’s defined benefit superannuation plans. Because the Australian Government funds these movements, they do not impact the operating result. 38 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 47. Southern Cross University Abridged Balance Sheets At 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Current assets 57,664 37,723 56,733 36,232 Non-current assets 163,426 171,965 157,052 165,522 TOTAL ASSETS 221,090 209,688 213,785 201,754 Current liabilities 25,789 25,311 25,685 25,106 Non-current liabilities 12,758 17,960 12,758 17,954 TOTAL LIABILITIES 38,547 43,271 38,443 43,060 NET ASSETS 182,543 166,417 175,342 158,694 Consistent with the operating result, net cash inflows from operating activities were largely responsible for the increase in net assets. UNIVERSITY ACTIVITIES The University is constituted under the Southern Cross University Act 1993. It mainly: provides educational facilities of university standard having particular regard to the needs of the north coast region of the State preserves, extends and disseminates knowledge through scholarship, research, creative works consultancy and internal and external teaching. For further information on the University, refer to www.scu.edu.au. CONTROLLED ENTITIES The following controlled entities have not been reported on separately as they are not considered material by their size or the nature of their operations to the consolidated entity. Entity Name Website Australian Plant DNA Bank Limited www.dnabank.com.au Biobank Pty Limited www.biobank.com Norsearch Limited * * This entity does not have a website Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 39
  • 48. The University of Sydney AUDIT OPINION The audits of the University and its continuing controlled entities’ financial reports for the year ended 31 December 2007 resulted in an unqualified Independent Auditor’s Report. Four companies controlled by the University were deregistered during the year due to no activity in recent years. They comprised Ucom Six Pty Limited (deregistered on the 15 July 2007), Ucom Seven Pty Limited (deregistered on 13 April 2007), Ucom Eleven Pty Limited (deregistered on 12 February 2007) and Ucom Fourteen Pty Limited (deregistered on 14 January 2007). Audit opinions on the financial reports for these four University controlled deregistered entities have not yet been issued. The Crown Solicitor has advised New South Wales Treasury that former directors (or equivalent) of a former statutory body can prepare and submit the financial report, but they cannot sign the financial report. As a result, the Auditor-General cannot issue an audit opinion. New South Wales Treasury is investigating ways to overcome this problem. Unless otherwise stated, the following commentary relates to the consolidated entity. KEY ISSUES Valuation of Museum Assets (Repeat Issue) We recommend that the University ensure its Nicholson and Macleay Museum assets are appropriately valued at least every five years. We are concerned that the Nicholson and Macleay Museum assets have not been subject to recent comprehensive valuations. A comprehensive valuation of the Nicholson Museum was completed in 1997 and the Macleay Museum in 1998. Valuations have subsequently been updated on the basis of global percentage increases to present these assets at fair value. The accounting standards require comprehensive valuations of non-current assets at least every five years. The University has a plan to revalue these collections progressively over the next four years. Excessive Annual Leave Balances (Repeat Issue) We recommend that management develop a leave plan with employees to reduce leave balances within an acceptable timeframe. We are concerned that a significant number of academic and general staff (1,671 staff) held leave balances in excess of the maximum allowed thresholds under the University’s leave policy. Annual leave balances in excess of maximum allowed thresholds continued to increase by 210 staff in 2007. In May 2006, the University changed the provisions in its academic and general staff awards to ensure that adequate notice of excess annual leave is given to staff to allow them to take the leave. The provisions also include forfeiture of annual leave if it is not taken within notified timeframes. At this stage the revised staff awards and other management actions have not significantly reduced excessive annual leave balances. 40 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 49. __________________________________________________________________________ The University of Sydney University Superannuation We recommend the University quantify and resolve employer superannuation underpayments as quickly as possible. In 2006, the University identified a past superannuation employer contribution underpayment in respect of some current and past employees. The University continues its efforts to determine the full financial impact of the underpayment and identify the individuals affected. An estimate of the underpayment of $7.5 million has been provided for in the 2007 financial report. PERFORMANCE INFORMATION (Comparative performance data on universities appears in the ‘Universities Overview’ section earlier in this Volume. The information shown below is based on consolidated financial statements.) The University’s current ratio (a measure of its financial liquidity) was 1.6 at 31 December 2007, an increase on the previous year’s 1.3. At this level it is above the minimum level identified by the Australian Government’s Department of Education, Employment and Workplace Relations (DEEWR) ‘good practice’ parameters and same as the State average of 1.6. Australian Government grants as a percentage of operating revenue decreased from 38.2 per cent in 2006 to 37.2 per cent in 2007. It is lower than the State’s average of 38.6 per cent and within the DEEWR ‘good practice’ parameters. Employee Benefits and on-costs as a percentage of operating revenue increased from 49 per cent in 2006 to 51.3 per cent in 2007. This is better than the State’s average of 54.3 per cent and within DEEWR ‘good practice’ parameters. OTHER INFORMATION We identified other opportunities for improvement to accounting and internal control procedures and have reported them to management. They included recommendations to improve systems controls and financial report preparation. Fall in Value of Financial Investments The University held financial asset investments of $1.1 billion at 31 December 2007 ($1.1 billion at 31 December 2006). A revaluation decrement of $114 million ($15.2 million increment) was recognised in equity due to the unrealised decrease in value of international and Australian equity markets in late 2007. At 31 January 2008, investment values decreased by a further $52.0 million. Capital Expenditure Program Capital expenditure in 2007 increased $40.8 million to $169 million. The University is addressing the challenges of: improving its infrastructure and addressing backlog maintenance providing suitable accommodation for students and staff replacing outdated facilities with modern teaching and research facilities; and developing a proactive asset development program. The University’s capital budget for 2008 to 2010 totals $882 million. It comprises: ‘Campus 2010’ program, $88.0 million; ‘Campus 2020' program, $311 million; Campus Expansion, $73.0 million; 'Teaching Hospital Development’ program, $35.0 million; property acquisitions, $151 million; and other capital works, $224 million. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 41
  • 50. The University of Sydney __________________________________________________________________________ Support of Student Organisations The University estimated its support of Student Organisations to be in excess of $8.0 million largely by in-kind support through the provision of scholarships, grounds, buildings, repairs and maintenance, and infrastructure cost reimbursements. In December 2007, the University signed a formal agreement with the University of Sydney Union formalising their relationship, their desire to protect the student experience and guaranteeing tenure to university buildings. FINANCIAL INFORMATION The consolidated financial information includes the financial reports of the University and its controlled entities. Abridged Income Statements Year ended 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Australian Government grants 485,937 462,595 485,937 462,595 Higher Education Contribution Scheme 127,530 123,366 127,530 123,366 Fees and charges 254,566 223,146 254,566 223,146 Other 436,710 401,945 432,708 401,380 Deferred income – superannuation (68,725) (129,419) (68,725) (129,419) TOTAL REVENUE 1,236,018 1,081,633 1,232,016 1,081,068 Employee benefits and on-costs 668,878 593,253 668,878 591,704 Depreciation 51,006 49,887 51,006 49,029 Other 397,646 377,314 397,609 376,351 Deferred expense – superannuation (68,725) (129,419) (68,725) (129,419) TOTAL EXPENSES 1,048,805 891,035 1,048,768 887,665 OPERATING RESULT 187,199 190,598 183,248 193,403 Fees and charges mainly comprised fee-paying overseas students $172 million ($148 million in 2006), fee-paying local students $33.1 million ($30.4 million), continuing education $11.4 million ($11.2 million), summer school fees $9.7 million ($8.8 million) and course fees $9.7 million ($7.2 million). Other income included investment income $153 million ($116 million), consulting and contract research income $98.5 million ($105 million), gain on disposal of assets $29.4 million ($57.2 million), contributions from organisations $24.9 million ($31.5 million) and donations and bequests $29.2 million ($26.5 million). Investment income increased mainly due to higher returns from managed funds in 2007. Employee benefits and on-cost expenses increased in 2007 by 12.7 per cent. Contributing to this increase was a combination of salary increases of four per cent, increased staff numbers of 5.4 per cent and increases in employee related provisions. Other expenses mainly comprised teaching and research grants $82.7 million ($84.7 million), scholarships, grants and prizes $62.0 million ($55.7 million), repairs and maintenance $44.4 million ($35.5 million), travel and related staff development and training $34.8 million ($31.7 million) and consultants and contractors $33.8 million ($26.4 million). 42 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 51. __________________________________________________________________________ The University of Sydney Deferred income and deferred expense reflect movements in the actuarially assessed liability for employees who are members of the State Government’s defined benefit superannuation plans. Because the Australian Government funds these movements, they do not impact on the operating result. Abridged Balance Sheets At 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Current assets 280,007 177,677 279,948 179,644 Non-current assets 3,566,667 3,601,200 3,553,665 3,589,526 TOTAL ASSETS 3,846,674 3,778,877 3,833,613 3,769,170 Current liabilities 239,118 204,961 238,783 204,029 Non-current liabilities 377,340 449,380 377,340 449,380 TOTAL LIABILITIES 616,458 654,341 616,123 653,409 NET ASSETS 3,230,216 3,124,536 3,217,490 3,115,761 Current assets increased by $102 million, mainly due to increases in cash and other financial assets. Non-current assets decreased by $34.5 million, mainly due to a decrease in financial assets of $94.6 million, offset by an increase in capital works balances of $68.6 million. Non-current assets include property, plant and equipment of $1.4 billion, financial asset investments of $939 million, and library and heritage assets of $656 million. Non-current liabilities decreased by $72.0 million, mainly due to the decrease in defined benefit superannuation liability of $72.3 million. Net assets comprise statutory funds that have conditions attached to their use (for example trusts, bequests and certain grants) of $632 million, asset revaluation reserves of $195 million and retained surpluses of $2.4 billion. UNIVERSITY ACTIVITIES The University of Sydney is established by the University of Sydney Act 1989. The University creates, preserves, transmits and applies knowledge through teaching, research, creative work and other forms of scholarship. For further information on the University, refer to www.usyd.edu.au. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 43
  • 52. The University of Sydney __________________________________________________________________________ CONTROLLED ENTITIES The following controlled entities have not been reported on separately as they are not considered material by their size or the nature of their operations to the consolidated entity. Entity Name Centre for United States Studies Pty Limited (formerly Ucom Twelve Pty Limited) Elastagen Pty Limited Institute for Magnetic Resonance Research The Bosch Institute The Sydney Institutes of Health and Medical Research Ucom Eleven Pty Limited Ucom Fifteen Pty Limited Ucom Fourteen Pty Limited Ucom Seven Pty Limited Ucom Six Pty Limited Ucom Sixteen Pty Limited Wentworth Annexe Limited OTHER BODIES ASSOCIATED WITH THE UNIVERSITY The following bodies associated with the University have not been reported on separately as they are not considered material by their size or the nature of their operations. For further financial and other information on these entities we have listed the entities’ websites. Entity Name Website United States Studies Centre Limited www.sydney.edu.au/us-studies/index.shtml University of Sydney Professorial * Superannuation System * This entity does not have a website 44 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 53. University of New England AUDIT OPINIONS The audits of the University and the following controlled entities’ financial reports for the year ended 31 December 2007 resulted in unqualified Independent Auditor’s Reports. Agricultural Business Research Institute Remarkspdf Pty Ltd (formerly UNE Rural Properties Pty Ltd) UNE Partnerships Pty Limited UNE Vision Pty Ltd Similarly the audit of International Livestock Resources and Information Centre Ltd for the year ended 30 June 2007 resulted in an unqualified Independent Auditor’s Report. The audits of the following controlled entities are not yet complete: Services UNE Limited University of New England Sports Association. Unless otherwise stated, the following commentary relates to the consolidated entity. PERFORMANCE INFORMATION (Comparative performance data on universities appears in the ‘Universities Overview’ section earlier in this Volume. The information shown below is based on consolidated financial statements.) The University’s current ratio (a measure of its financial liquidity) was 1.4 at 31 December 2007, a decrease from 1.5 at 31 December 2006. At this level it is lower than the State average and slightly lower than the minimum level identified by the Australian Government’s Department of Education, Employment and Workplace Relations (DEEWR) ‘good practice’ parameters. The University’s current ratio and operating result were impacted by the timing of the receipt of grants to fund the Rural Medical School. The University’s funds were used, as an additional $3.5 million grant from DEEWR will not be received until 2009. Australian Government grants as a percentage of operating revenue increased from 47.4 per cent in 2006 to 51.1 per cent in 2007. The University continues to have the highest level of reliance on Australian Government grants of all universities. The University has exceeded the DEEWR ‘good practice’ parameters in this respect and is significantly higher than the State’s average of 38.6 per cent. Employee benefits and on-costs as a percentage of operating revenue decreased from 58.7 per cent in 2006 to 55.9 per cent in 2007. This is above the State’s average of 54.3 and is within the DEEWR ‘good practice’ parameters. OTHER INFORMATION We identified opportunities for improvement in internal controls and reported them to management. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 45
  • 54. University of New England_________________________________________________________________________ Voluntary Student Unionism Voluntary Student Unionism (VSU) resulted in the University, through its controlled entities, assuming responsibility for providing a number of services previously undertaken by student organisations. Grants paid to these entities during 2007 totalled $963,000. FINANCIAL INFORMATION The consolidated financial information includes the financial reports of the University and its controlled entities. Abridged Income Statements Year ended 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Australian Government grants 105,236 91,418 105,236 91,418 Higher Education Contribution Scheme 39,108 37,597 39,108 37,597 Fees and charges 41,934 45,209 31,132 34,689 Other 19,629 18,659 14,644 13,006 Deferred income – superannuation (21,700) (27,123) (21,700) (27,123) TOTAL REVENUE 184,207 165,760 168,420 149,587 Employee benefits and on-costs 115,120 113,313 106,412 104,923 Depreciation and amortisation 12,295 11,810 11,453 11,044 Other 74,417 64,547 68,288 58,365 Deferred expense – superannuation (21,700) (27,123) (21,700) (27,123) TOTAL EXPENSES 180,132 162,547 164,453 147,209 OPERATING RESULT 4,075 3,213 3,967 2,378 The University received a capital development grant from the Australian Government of $3.5 million to establish a new rural medical school (the first intake of 60 students commenced in 2008). The joint medical program is the result of partnership between Hunter New England Health, the University of Newcastle and the University of New England. Deferred income and deferred expense reflect movements in the actuarially assessed liability for employees who are members of the State Government’s defined benefit superannuation plans. Because the Australian Government funds these movements they do not impact the operating result. 46 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 55. _________________________________________________________________________University of New England Abridged Balance Sheets At 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Current assets 55,682 51,327 46,064 41,065 Non-current assets 313,039 328,108 297,209 317,632 TOTAL ASSETS 368,721 379,435 343,273 358,697 Current liabilities 52,968 48,155 49,396 44,807 Non-current liabilities 82,911 107,044 81,902 106,234 TOTAL LIABILITIES 135,879 155,199 131,298 151,041 NET ASSETS 232,842 224,236 211,975 207,656 UNIVERSITY ACTIVITIES The University is constituted under the University of New England Act 1993. It: provides facilities for educational and research at university standard disseminates and increases knowledge provides courses of study across a range of fields, and carries out research to meet community needs participates in public discourse confers degrees of Bachelor, Master and Doctor and awards diplomas and other certificates provides teaching and learning that engage with advanced knowledge and inquiry, and develops and provides cultural, sporting, professional, technical and vocational services to the community. For further information on the University, refer to www.une.edu.au. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 47
  • 56. University of New England_________________________________________________________________________ CONTROLLED ENTITIES The following controlled entities have not been reported on separately as they are not considered material by their size or the nature of their operations to the consolidated entity. Entity Name Website Agricultural Business Research Institute www.abri.com.au UNE Partnerships Pty Limited www.unepartnerships.edu.au International Livestock Resources and www.ilric.com Information Centre Ltd UNE Vision Pty Ltd * Remarkspdf Pty Ltd (formerly UNE Rural * Properties Pty Ltd) University of New England Sports Association www.une.edu.au/sportune Services UNE Limited www.servicesune.com.au * These entities do not have websites OTHER BODIES ASSOCIATED WITH THE UNIVERSITY The following bodies associated with the University have not been reported on separately as they are not considered material by their size or the nature of their operations. Entity Name Website National Marine Science Centre Pty Ltd www.nmsc.edu.au University of New England Professorial * Superannuation Fund * This entity does not have a website 48 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 57. University of New South Wales AUDIT OPINIONS The audits of the University and its controlled entities’ financial reports for the year ended 31 December 2007 resulted in unqualified Independent Auditor’s Reports for 18 (including the parent) entities and qualified Independent Auditor’s Reports for three entities. We issued qualified Independent Auditor’s Reports on the following controlled entities: University of New South Wales Foundation and UNSW Hong Kong Foundation Limited As is common for organisations of this type, it is impractical for these entities to maintain an effective system of internal control over donation revenues they receive until their initial entry in the financial records. The Independent Auditor’s Reports for the year ended 31 December 2006 were similarly qualified. UNSW Asia School Limited We qualified the 1 January 2006 opening balances and the results of UNSW Asia School Limited’s operations and its cash flows for the year ended 31 December 2006, as we had not audited operations prior to 2006. We were unable to obtain sufficient appropriate audit evidence to form an opinion on the balances as at 31 December 2005. As these balances effect the determination of the results of operations and cash flows for the year ended 31 December 2006, we were unable to form an opinion on these results and cash flows. We issued unqualified Independent Auditor’s Reports for the following controlled entities: Australian Education Consultancy Ltd John Lewis and Pamela Lightfoot Trust NewSouth Eight Pty Ltd NewSouth Five Pty Ltd NewSouth Global India Pvt Limited NewSouth Global (Thailand) Limited NewSouth One Pty Ltd NewSouth Seven Pty Ltd NewSouth Six Pty Ltd NSW Minerals Industry/University of New South Wales Education Trust University of New South Wales Foundation Limited University of New South Wales International House Limited University of New South Wales Press Limited UNSW (Thailand) Limited UNSW Global (Singapore) Pte Limited UNSW Global Pty Limited UNSW Hong Kong Limited. The financial reports for A.C.N. 125 694 546 Pty Ltd and UNSW & Study Abroad - Friends and U.S. Alumni, Inc have not been submitted for audit at the date of this report. Dosimetry & Imaging Pty Ltd and UNSW Asia Foundation Limited both obtained exemptions from New South Wales Treasury not to prepare 2007 financial reports, therefore no audit was performed. UNSW Asia was voluntarily placed into liquidation on 24 December 2007. The audit opinion on the financial report has not been issued. The Crown Solicitor has advised New South Wales Treasury that former directors (or equivalent) of a statutory body can prepare and submit the financial report but they cannot sign the financial report. As a result, the Auditor-General cannot issue an audit opinion. New South Wales Treasury is investigating ways to overcome this problem. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 49
  • 58. University of New South Wales _____________________________________________________________________ Our audits for eight of the University’s controlled entities have not been completed, refer to Appendix 3 in this Volume for details. Unless otherwise stated, the following commentary relates to the consolidated entity. KEY ISSUES Singapore Campus – UNSW Asia In 2006, we reported the University was reviewing the scope and operation, financing and other arrangements of the UNSW Asia Campus in Singapore. This review was undertaken following below plan enrolments in the first semester of 2007 and similar results forecasted for subsequent semesters. In May 2007 UNSW Asia announced the closure of its Singapore campus and cessation of its principal business. The Singapore campus was officially closed on 28 June 2007 and the company was placed into voluntary liquidation in December 2007. At the date of this report the liquidation process is still ongoing. Following the closure of UNSW Asia, the University signed a settlement agreement in December 2007 with the Singapore Economic Development Board (EDB), the Government of the Republic of Singapore, the JTC Corporation and UNSW Asia. This resulted in the University assuming $47.6 million of UNSW Asia’s liabilities and closure costs in 2007, including a $16.9 million ANZ Bank loan, a $11.9 million EDB loan and repayment of a $13.8 million grant to the EDB. The closure costs included $3.5 million for staff termination payments. The amount of taxation liable on these payments is being confirmed with Singapore authorities. In December 2007, the University also signed an agreement with the EDB, in which the EDB and others will provide PhD scholarship support to the University for an amount up to SGD 2.0 million over five years commencing 1 January 2008. The EDB will also provide an aggregate of research collaboration grants for an amount up to SGD 4.0 million or 40 per cent of the total research cost, whichever is the lower, over five years. Both funding arrangements are subject to the University meeting appropriate conditions. Conflict of Interest We recommend that identified possible conflicts of interest be closely monitored by the University to enable formal resolution of conflicts that do eventuate. The President of UNSW Asia was also a board member of the EDB. This created a possible conflict of interest with the EDB being a major financier of UNSW Asia. Management advised us that the President completed the necessary conflict of interest declarations, although those documents could not be located. We were concerned how the University could satisfactorily conduct a review of its operations in Singapore while the President remained an EDB board member. After discussions with management and our sighting available documents we were satisfied that the University managed this matter satisfactorily. Outstanding Employment Issues We recommend the University establish a formal project to resolve outstanding employment issues in 2008. The project director should formally report on progress and issues monthly to the University executive. 50 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 59. _____________________________________________________________________ University of New South Wales During 2007, the University identified a number of employment issues that required significant attention by management at a time when significant resources were also needed for the closure of the Singapore campus. As a result management was unable to complete the employment issues. Three significant employment related issues were identified by management requiring ‘Notices of Voluntary Disclosures Pending’ being sent to authorities. These letters advised of possible underpayment of taxes and superannuation obligations. Management sought assistance from taxation advisers and advise they will complete an extensive review in 2008 to ascertain the extent of necessary actions and payments to resolve these matters. Based on work to-date the University recorded $11.8 million of liabilities as at 31 December 2007. Pre-Retirement Employment Contracts We recommend management liaise with the Commonwealth Department of Education, Employment and Workplace Relations on the extent of utilising pre-retirement employment contracts with the University’s employees. The University has for many years utilised pre-retirement employment contracts, as permitted by the Higher Education Contract of Employment Award 1998 (the Award). The Award states: Where a full-time or part-time employee declares that it is his or her intention to retire, a fixed term contract expiring on or around the relevant date may be adopted as the appropriate type of employment for a period of up to five years. The pre-retirement contract allows the University and the employee to agree that the employee will give up their status as a continuing employee and enter into a fixed-term contract of up to five years duration prior to the employee’s retirement. The employee’s employment with the University will end on the expiration of the contract. In return for agreeing to enter into this contract the employee receives a salary loading of up to 25 per cent for the short term contract. Fixing employees’ retirement dates assists the University with succession planning. Employees are encouraged to seek superannuation advice when contemplating entering into a pre-retirement contract. It is common for the employees on pre-retirement contracts to be members of New South Wales Public Sector defined benefit superannuation funds. When the University pays a salary loading under these pre-retirement contracts, it results in higher superannuation benefits to the employees. Funding of these defined benefit superannuation funds is the responsibility of the Australian Government. Management has advised us that they are currently reviewing the University’s use of pre-retirement contracts, including the communication of their use to appropriate stakeholders. Controlled Entities (Repeat Item) The complexity of the University group structure continues to pose significant challenges for the University to address and manage. These include: timely identification, communication, reporting and resolution of issues ensuring appropriate governance and controls are in place across the group and operate effectively throughout the year. We understand management is continuing to review the appropriateness of the group structure with a view to addressing these issues. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 51
  • 60. University of New South Wales _____________________________________________________________________ Australian Defence Force Academy (ADFA) Superannuation (Repeat Item) In 2006, we reported the University planned to transfer investments it was holding to fund superannuation liabilities of ADFA staff to the State Superannuation Scheme (SSS Fund). This was not achieved. However, the University has received advice from its actuary on how to proceed on this matter. In 2004, the University reached agreement with the Australian Government for funding superannuation liabilities of ADFA staff transferred to the University when ADFA became a University College. In December 2004 the Australian Government paid the University $25.5 million for those liabilities. Since then it has been the University’s obligation to fund current and future liabilities. The investment has grown by $12.6 million to $38.1 million at 31 December 2007. These funds are externally managed as part of the University’s pool of general investments. Student Debtors and other Reconciliations (Repeat Item) Last year, we reported management had identified the need to complete a review of credit balances in student debtors’ accounts during 2007. These balances date back several years and comprise thousands of small accounts. Management advised us that this review will be completed in 2008. Co-operative Research Centre for Eye Research and Technology (CRCERT) (Repeat item) For four years, we reported that the University was conducting an investigation into matters relating to CRCERT. This investigation is being conducted in accordance with clause 14.2 of the UNSW (Academic Staff) Enterprise Agreement 2003 ‘Initial Procedures for Dealing with Allegations of Misconduct or Serious Misconduct’. We have been advised that the University received the complete report in 2007 from the independent investigator appointed under the Enterprise Agreement and that the matter is being dealt with. Resolution is expected in 2008. PERFORMANCE INFORMATION (Comparative performance data on all universities appears in the ‘Universities Overview’ section earlier in this Volume.) The University’s current ratio (a measure of its financial liquidity) was 0.9 at 31 December 2007, an increase on the previous year’s 0.6. At this level it is below the State’s average of 1.6 and below the minimum level identified by the Australian Government’s Department of Education, Employment and Workplace Relations (DEEWR) ‘good practice’ parameters. However, another DEEWR guideline, the Annual Institutional Assessment Framework, suggests a current ratio of more than one is low risk, between 0.75 and one is medium risk, and less than or equal to 0.75 is high risk. Using this benchmark, the University’s current ratio would be considered medium risk. The University has $290 million available for sale financial assets that are readily convertible to cash to fund any short-term funding requirements as and when required. Australian Government grants as a percentage of operating revenue decreased from 39.1 per cent in 2006 to 38.3 per cent in 2007. It is slightly lower than the State’s average of 38.6 per cent, but within the DEEWR ‘good practice’ parameters. Employee benefits and on-costs as a percentage of operating revenue decreased from 58.5 per cent in 2006 to 55.1 per cent in 2007. This is higher than the State’s average of 54.3 per cent, but within the DEEWR ‘good practice’ parameters. The University reported a deficit of $6.5 million. This was primarily attributable to the closure of UNSW Asia (costing the University in excess of $47.0 million) and $11.8 million of provisioning for possible employment related taxes and superannuation obligations, mentioned above under Outstanding Employment Issues. 52 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 61. _____________________________________________________________________ University of New South Wales OTHER INFORMATION Fall in Value of Financial Investments The University held financial asset investments of $360 million at 31 December 2007 ($347 million at 31 December 2006). A revaluation decrement of $36.3 million ($5.7 million increment in 2006) was recognised due to the decrease in value of investments as a result of global credit market uncertainties. At 29 February 2008, the investment values decreased by a further $24.0 million (6.7 per cent) due to ongoing uncertainties in the global credit market. Capital Expenditure Program Capital expenditure in 2007 was $95.9 million, a decrease of $59.2 million on 2006. However, the University has a significant capital program over the next few years, including building accommodation at High Street and Anzac Parade and the cancer research building near gate nine on the main campus. The University’s capital commitments at 31 December 2007 totalled $126 million. The capital expenditure program is designed to meet the following major challenges for the University: improve its infrastructure and address backlog maintenance (which was approximately $238 million at 31 December 2007) provide suitable accommodation for students and staff, and replace outdated facilities with modern teaching and research facilities. In order to fund the significant capital program the University did the following: negotiated public private partnerships for the two accommodation sites whereby the majority of the funding is met by the private sector arranged a $41.0 million financing arrangement over some of the University’s property on Anzac Parade negotiated a $35.0 million contribution from the Children’s Cancer Institute Australia for Medical Research received a significant grant from the Lowy Family towards the cost of the cancer research building. Asset Valuation In 2007, management improved the ways it values properties by: providing detailed instructions to its valuers and received the valuation results performing a detailed review and reconciliation of the North Mall Development Zone project. This process identified the need to reverse $5.7 million of over-capitalised costs changing its policy to now depreciate student accommodation buildings over their expected useful lives. This required recognising $4.5 million of depreciation for prior periods. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 53
  • 62. University of New South Wales _____________________________________________________________________ Additionally, management committed to undertake further investigations into disclosing investments at ‘cost less impairment’ rather than ‘net of impairment’ in its 2008 financial report: continuing its review of governance, controls and processes that support University decisions to enter into and manage significant asset transactions. NewSouth Innovations Pty Limited (NS Innovations) In 2006 we reported that: formal agreements were not in place to confirm the terms and conditions of convertible note instruments between NS Innovations and related companies. Management has since entered into formal agreements the structure of the Boards of NS Innovations and related companies may give rise to potential conflicts of interest. Management has now reviewed the structure and appointed directors that reduce the conflict that funding arrangements for NS Innovations will need to be reviewed during 2007 as arrangements are not clear as to the quantity, timing and certainty of future funding. This review is ongoing. FINANCIAL INFORMATION The consolidated financial information includes the financial reports of the University and its controlled entities. Abridged Income Statements Year ended 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Australian Government grants 387,298 370,216 387,298 370,216 Higher Education Contribution Scheme 102,526 90,659 102,526 90,659 Fees and charges 309,810 285,076 238,745 209,255 Other 210,884 201,378 192,858 160,647 Deferred (expense)/ income – superannuation (50,669) (90,369) (50,669) (90,369) TOTAL REVENUE 959,849 856,960 870,758 740,408 Employee benefits and on-costs 556,380 554,553 515,668 500,408 Depreciation and amortisation 45,215 46,081 43,439 43,082 Other 368,197 330,938 325,945 276,576 Operating loss from discontinued operation 47,036 -- 47,598 -- Deferred expense/ (income) - superannuation (50,669) (90,369) (50,669) (90,369) TOTAL EXPENSES 966,159 841,203 881,981 729,697 Outside equity interest and income (expenses)/ tax benefit (172) 39 -- -- OPERATING RESULT (6,482) 15,796 (11,223) 10,711 54 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 63. _____________________________________________________________________ University of New South Wales The majority of the increase in Australian Government grants of $17.1 million was due to five new grants (Capital Development Pool, HEFA Learning and Teaching Performance Fund, HEFA Operating CTS, Australian Scheme for Higher Education and Implementation Assistance Program) amounting to $8.0 million. In addition, UNSW qualified for a 2.5 per cent increase in Australian Grant Scheme by complying with the Higher Education Workplace Relations Requirements and National Governance Protocols. The increase of $25.0 million fees and charges was mainly due to a seven per cent increase in international student numbers, a 16 per cent increase in domestic postgraduate students and a 19 per cent increase in domestic undergraduate students. The deferred income and expense superannuation amounts reflect movements in the actuarially assessed liability for employees who are members of the State Government’s defined benefit superannuation plans. These have no impact on the operating result because the Australian Government funds the majority of this liability. Increase in other expenses of $37.3 million was mainly due to increases in contract services of $13.9 million and non-capitalised equipment of $8.3 million. The $47.0 million operating loss from discontinued operations relates to the closure of UNSW Asia. FINANCIAL INFORMATION Abridged Balance Sheets At 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Current assets 195,139 127,478 164,164 82,100 Non-current assets 1,940,836 1,825,022 1,861,856 1,738,897 TOTAL ASSETS 2,135,975 1,952,500 2,026,020 1,820,997 Current liabilities 286,951 265,690 276,553 242,824 Non-current liabilities 449,032 455,503 447,486 446,124 TOTAL LIABILITIES 735,983 721,193 724,039 688,948 NET ASSETS 1,399,992 1,231,307 1,301,981 1,132,049 The increase in the University’s total assets is predominantly due to property, plant and equipment revaluation increments of $152 million and an increase in major capital expenditure incurred for buildings during 2007. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 55
  • 64. University of New South Wales _____________________________________________________________________ UNIVERSITY ACTIVITIES The University is constituted under the University of New South Wales Act 1989. It mainly: provides education and research facilities of university standard aids, by research and other suitable means, the advancement, development and practical application of science to industry and commerce provides instruction and carries out research in humane studies and medicine and other disciplines as the Council may determine. For further information on the University, refer to www.unsw.edu.au. CONTROLLED ENTITIES UNSW Global Pty Limited (Global) Global operates controlled entities in Singapore, Hong Kong, India and Thailand. The companies provide undergraduate preparation courses and various language programs and services, conduct educational testing, manage study abroad programs and facilitate technical assistance and training activities. Year ended 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $'000 $'000 Revenue 77,376 69,131 73,802 66,630 Expenses 70,703 66,249 68,195 64,725 Profit 6,673 2,882 5,607 1,905 Net assets (at 31 December) 19,370 15,130 18,025 14,718 Revenue rose mainly due to an increase in fees and charges. The increase in expenses was mainly due to a rise in commissions paid to agents and administrative costs. Net assets increased by $4.2 million primarily due to an increase in cash and cash equivalents and a decrease in trade and other payables. For further information on Global, refer to www.nsg.unsw.edu.au. University of New South Wales Foundation The Foundation is the main fundraising arm of the University. Year ended 31 December 2007 2006 $'000 $'000 Revenue 19,550 11,054 Expenses 7 7 Gain/(loss) on sale of financial assets 99 (468) Surplus 19,642 10,579 Net assets (at 31 December) 59,615 53,493 56 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 65. _____________________________________________________________________ University of New South Wales Revenue rose due to receipt of a significant grant from the Lowy Family and an increase in investment income. The following controlled entities have not been reported on separately as they are not considered material by their size or the nature of their operations to the consolidated entity. Entity Name Website A.C.N 125 694 546 Pty Ltd * Acyte Biotech Pty Ltd http://www.acyte.com AGSM Limited http://www.agsm.edu.au Audio Nomad Pty Ltd * Australian Education Consultancy Limited http://www.aecl.com.hk Cystemix Pty Limited * Dosimetry & Imaging Pty Limited * HepatoCell Therapeutics Pty Limited * John Lewis and Pamela Lightfoot Trust * NewSouth Eight Pty Ltd * NewSouth Five Pty Ltd * NewSouth Four Pty Ltd * NewSouth Global (Thailand) Limited * NewSouth Global India Private Limited http://www.unswindiaoffice.com NewSouth Innovations Pty Limited http://www.nsinnovations.com.au NewSouth One Pty Ltd * NewSouth Seven Pty Ltd * NewSouth Six Pty Ltd * NSW Minerals Industry/University of New * South Wales Education Trust Qucor Pty Limited http://www.qucor.com.au University of New South Wales Foundation * Limited University of New South Wales International http://www.ihunsw.edu.au House Limited University of New South Wales Press Limited http://www.unswpress.com.au UNSW & Study Abroad - Friends and U.S. * Alumni, Inc UNSW (Thailand) Limited http://www.unswthailandoffice.com UNSW Asia Foundation Limited * UNSW Asia School Limited * UNSW Global (Singapore) Pte Limited http://www.singapore.unsw.edu.au UNSW Hong Kong Foundation Limited * UNSW Hong Kong Limited http://www.hongkong.unsw.edu.au * These entities do not have websites Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 57
  • 66. University of Newcastle AUDIT OPINION The audits of the University and its controlled entities’ financial reports for the year ended 31 December 2007 resulted in unqualified Independent Auditor’s Reports. Unless otherwise stated, the following commentary relates to the consolidated entity. PERFORMANCE INFORMATION (Comparative performance data on all universities appears in the ‘Universities Overview’ section earlier in this Volume. The information shown below is based on consolidated financial statements.) The University’s current ratio (its ability to meet short term financial obligations) was 1.2 at 31 December 2007, a decrease from the previous year’s 1.6. This ratio is lower than the State average of 1.6 and below the Australian Government’s Department of Education, Employment and Workplace Relations (DEEWR) ‘good practice’ parameters. Australian Government grants as a percentage of operating revenue slightly decreased from 42.8 per cent in 2006 to 42.7 per cent in 2007 and are within DEEWR ‘good practice’ parameters. The State’s average was 38.6 per cent. Employee benefits and on-costs as a percentage of operating revenue increased to 53.3 per cent in 2007 (51.7 per cent in 2006) and is within DEEWR ‘good practice’ parameters. The State’s average was 54.3 per cent. OTHER INFORMATION We identified a number of opportunities to improve accounting and internal control procedures at the University and its controlled entities and have reported them to management. A number of these issues have been raised previously, however the University has advised that they require a longer timeframe to resolve. The University has instituted processes to monitor and report on progress in resolving issues raised. Voluntary Student Unionism Voluntary Student Unionism (VSU) resulted in the University, through a subsidiary company, assuming responsibility for providing a number of services previously undertaken by student organisations. An independent company, the University of Newcastle Union Limited (UNUL), was responsible for many student services at the Newcastle campus. In the absence of income from student union fees this company was unable to continue operating. On 1 April 2007, all operations, assets, and liabilities of UNUL (net assets of $2.1 million) were transferred to the University’s subsidiary company UoN Services Limited for nil consideration. In order to assist in capital works and to replace income previously obtained from student membership fees the University gave a subsidy to UoN Services Limited of $1.9 million. In 2006, UNUL received membership fees of $1.5 million. In 2007, UoN Services Limited received membership fees of $59,000, which is a decrease of $1.4 million. In total during 2007, the University spent $2.7 million on payments to student associations. 58 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 67. __________________________________________________________ University of Newcastle Credit Cards In our 2007 Report to Parliament Volume Two, it was noted that there were problems with the University’s employees extensive use, and large number, of credit cards. The University is continuing to improve controls and, from March 2008, cards will be automatically cancelled by the University where there is non-compliance with the internal policy regarding their use. Commercial Activities (Repeat Item) Universities enter into commercial activities for various reasons including to commercialise research. To help ensure all activities are adequately identified, monitored and risks and benefits reported, procedures and records are required. We previously reported to the University that a commercial activities register was required to record details for all activities. It is also a requirement of the University’s enabling legislation. The original target implementation date for the creation of a commercial activities register was 30 June 2007. However, this has been extended to 30 June 2008. Investments Due to the recent movements in financial markets the University’s investment portfolio has decreased $7.4 million (8.4 per cent) in the three months since 31 December 2007. Investments were nine per cent of the total assets held by the consolidated entity as at 31 December 2007. FINANCIAL INFORMATION The consolidated financial information includes the financial reports of the University and its controlled entities. Year ended 30 June Consolidated Parent 2007 2006 2007 2006 $'000 $'000 $'000 $'000 Australian Government financial assistance 256,121 234,464 256,121 234,464 Fees and charges 75,307 74,807 55,051 56,616 Other 183,560 74,467 81,983 73,810 Deferred income – superannuation (18,966) (33,889) (18,966) (33,889) TOTAL REVENUE 396,022 349,849 374,189 331,001 Employee benefits and on-costs 221,385 198,371 212,184 190,409 Depreciation and amortisation 33,164 29,443 32,554 29,038 Other 138,336 119,988 130,132 111,962 Deferred expense – superannuation (18,966) (33,889) (18,966) (33,889) TOTAL EXPENSES 373,919 313,913 355,904 297,520 OPERATING RESULT 22,103 35,936 18,285 33,481 Deferred income and deferred expense reflect movements in the actuarially assessed liability for employees who are members of the State Government’s defined benefit superannuation plans. Because the Australian Government funds these movements, they do not impact on the operating result. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 59
  • 68. University of Newcastle ___________________________________________________________ At 31 December Consolidated Parent 2007 2006 2007 2006 $'000 $'000 $'000 $'000 Current assets 73,516 93,147 56,621 78,704 Non-current assets 901,504 876,538 898,686 873,812 TOTAL ASSETS 975,020 969,685 955,307 952,516 Current liabilities 87,073 82,363 77,149 72,082 Non-current liabilities 131,160 157,948 130,915 157,848 TOTAL LIABILITIES 218,233 240,311 208,064 229,930 NET ASSETS 756,787 729,374 747,243 722,586 Net assets for the consolidated entity have increased by $27.4 million principally due to the operating result and asset revaluations performed during the year. UNIVERSITY ACTIVITIES The University is constituted under the University of Newcastle Act 1989. It mainly: provides educational and research facilities, having particular regard to the needs of the Hunter Region, the Central Coast and surrounding areas encourages the dissemination, advancement, development and application of knowledge provides courses of study and carries out research to meet the needs of the community confers degrees, including Bachelor, Master and Doctor, and awards diplomas and certificates. For further information on the University, refer to www.newcastle.edu.au. CONTROLLED ENTITIES The following controlled entities have not been reported on separately as they are not considered material by their size or the nature of their operations to the consolidated entity. The audits resulted in unqualified Independent Auditor’s reports and did not identify any significant issues or risks, except as noted below. GraduateSchool.com Pty Limited During the year the company took action to rectify deficiencies it identified in the control environment. The audit also identified specific control weaknesses including; failure to monitor and follow up debtors, lack of control of physical assets, lack of supporting documentation for some payments and journal entries, no formal approval of student fee charges, and incorrect costing for inventory and inadequate control over stock-take procedures. The Finance section of the University is now providing financial services to the company and is addressing the weaknesses identified. 60 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 69. __________________________________________________________ University of Newcastle UON, Singapore Pte Ltd UON, Singapore Pte Ltd offers a number of the University’s undergraduate and post graduate degree courses at campuses in Singapore. The University has an agreement with a Singaporean education provider to teach University degrees from their campuses. This means that the University did not have to purchase infrastructure in Singapore and benefits from its partner’s local knowledge. The company was incorporated on 8 March 2006 and is still in the start up phase of its operations. It was planned that the company would incur losses for the first two years before turning profitable. To date, losses of $467,000 have been incurred. UON, Singapore Pte Ltd has liabilities that are greater than its assets by $386,000. The largest creditor of the company is the University which is owed $1.9 million at 31 December 2007. The University has provided a letter of support to the company and anticipates that UON, Singapore Pte Ltd will make a profit in 2008 and start to repay the monies owing to the University. UoN Services Limited UoN Services Limited acquired the assets and liabilities of the University of Newcastle Union Limited on 1 April 2007. The University of Newcastle Union Limited existed to provide facilities, services and amenities for its Members. However, due to the introduction of voluntary student unionism, the business was transferred to UoN Services Limited. The University obtained control of Degrees in Catering Pty Ltd on 1 April 2007 from the University of Newcastle Union Limited. Degrees in Catering Pty Ltd exists to provide catering at functions, occasions, or events held in locations outside of designated licensed areas. It is consolidated with UoN Services and the University. TheraPPy Pty Limited was wound up during 2007 and the remaining company proceeds distributed to shareholders. Entity Name Website GraduateSchool.com Pty Limited www.gradschool.com.au Hunter Uni-Clinics Pty Limited * - Cessnock Uni-Clinic Trust * The University of Newcastle Research www.newcastle.edu.au/tunra Associates Limited - Probiotic Health Pty Limited * UoN Foundation Ltd www.newcastle.edu.au/foundation UoN Services Limited * - Degrees in Catering Pty Ltd * UON, Singapore Pte Ltd www.newcastle.edu.au/campus/singapore * These entities do not have websites Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 61
  • 70. University of Technology, Sydney AUDIT OPINION The audits of the University and its controlled entities’ financial reports for the year ended 31 December 2007 resulted in unqualified Independent Auditor’s Reports. KEY ISSUES Corporate Governance and Risk Management Framework Last year we recommended alignment of the risk management framework of the University and Insearch Limited to further enhance governance. During the year, Insearch Limited’s Board was reconstituted to increase the University’s representatives and the term of any director restricted to eight years. This initiative allowed Insearch Limited to improve its corporate governance through the addition of directors’ skills. Ku-ring-gai Campus Rezoning The University endorsed a strategy in July 2003 to review its options for the long term use of the Ku-ring-gai Campus. With the consent of the University Council, the preferred concept plan for the Ku-ring-gai Campus was submitted to the New South Wales Department of Planning under Part 3A of the Environmental Protection Act 1997 (EPA Act). The submission seeks the introduction of a new site-specific land use zone to permit a wider range of uses including residential. The University is now waiting for the Minister's decision. Indications are that a formal decision will be made in early May 2008. PERFORMANCE INFORMATION (Comparative performance data on all universities appears in the ‘Universities Overview’ section earlier in this Volume. The information shown below is based on consolidated financial statements.) The University’s current ratio (a measure of its financial liquidity) was 1.9 at 31 December 2007. This is an increase from the previous year’s ratio of 1.4 and higher than the minimum level identified by the Australian Government’s Department of Education, Employment and Workplace Relations (DEEWR) ‘good practice’ parameters. Australian Government grants as a percentage of operating revenue increased, from 31.7 per cent in 2006 to 32.3 per cent. However, it remains lower than the State’s average of 38.6 per cent, and well within the DEEWR ‘good practice’ parameters. Employee benefits and on-costs as a percentage of operating revenue decreased from 57.5 per cent in 2006 to 55.1 per cent in 2007. The University’s percentage is higher than the State’s average of 54.3 per cent, but within DEEWR ‘good practice’ parameters. 62 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 71. ___________________________________________________________________ University of Technology, Sydney Backlog Maintenance The University’s back log maintenance improved by 36 per cent, from $19.8 million in 2006 to $12.7 million in 2007. This improvement is a continuation of the efforts that began three years ago as shown below: Year ended 31 December Actual 2005 2006 2007 $’000 $’000 $’000 Backlog maintenance 24,300 19,800 12,700 OTHER INFORMATION We identified some opportunities for improvement in accounting and internal control procedures and have reported them to management. FINANCIAL INFORMATION The consolidated financial information includes the financial reports of the University and its controlled entities. Abridged Income Statements Year ended 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Australian Government grants 150,064 135,255 150,064 135,255 Higher Education Contribution Scheme 81,923 74,960 81,923 74,960 Fees and charges 157,421 156,465 124,863 125,971 Other 74,551 59,446 69,878 61,451 Deferred income – superannuation (24,179) (41,131) (24,179) (41,131) TOTAL REVENUE 439,780 384,995 402,549 356,506 Employee benefits and on-costs 255,792 245,089 238,376 230,843 Depreciation 49,768 42,054 47,881 40,311 Other 121,275 121,247 106,164 104,175 Deferred expense – superannuation (24,898) (42,402) (24,898) (42,402) TOTAL EXPENSES 401,937 365,988 367,523 332,927 OPERATING RESULT 37,843 19,007 35,026 23,579 Higher Education Contribution Scheme (HECS) fees increased by 9.3 per cent because of the continuing impact of the 25 per cent increase in fees in 2005. The University sold the Aarons Hotel property for a profit of $4.0 million. This contributed to the 25 per cent increase in other revenue. The University also received a $3.0 million donation from Insearch Limited. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 63
  • 72. University of Technology, Sydney___________________________________________________________________ Deferred income and deferred expenses reflect movements in the actuarially assessed liability for employees who are members of the State Government’s defined benefit superannuation plans. Because the Australian Government funds these movements, they do not impact on the operating result. Depreciation increased by 18.3 per cent, mainly due to the addition of $11.5 million capitalised from capital works in progress and depreciation on the Science Building that was capitalised late in 2006. Abridged Balance Sheets At 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Current assets 138,186 99,430 112,365 79,729 Non-current assets 1,101,402 1,044,001 1,090,181 1,031,767 TOTAL ASSETS 1,239,588 1,143,431 1,202,546 1,111,496 Current liabilities 100,188 99,772 86,320 88,917 Non-current liabilities 180,576 238,141 178,957 236,004 TOTAL LIABILITIES 280,764 337,913 265,277 324,921 NET ASSETS 958,824 805,518 937,269 786,575 Current assets increased mainly due to an increase of $31.7 million in managed fund investments. Non-current assets increased by $57.4 million mainly due to: an increase in the value shares held in an educational company $3.2 million an increase in land and building values as a result of a revaluation in the current year of $113 million a decrease in property of $21.5 million from the sale of Aaron’s Hotel a decrease in non-current receivables by $24.2 million relating to the adjustment to deferred government contributions for superannuation. Non-current liabilities reduced by $57.6 million mainly due to a $32.5 million decrease in borrowings. UNIVERSITY ACTIVITIES The University is constituted under the University of Technology, Sydney Act 1989. It mainly provides and is responsible for: educational facilities at university standard courses of study or instruction across a range of fields and carrying out of research to meet the needs of the community the encouragement of the dissemination, advancement, development and application of knowledge informed by free inquiry, and the conferring of degrees, including those of Bachelor, Master and Doctor, and the awarding of diplomas, certificates and other awards. For further information on the University, refer to www.uts.edu.au. 64 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 73. ___________________________________________________________________ University of Technology, Sydney CONTROLLED ENTITIES Insearch Limited Insearch Limited operates controlled entities in China and Thailand. It has a branch in England and two joint ventures in China and Vietnam. It has also signed about 400 agency agreements worldwide to enrol students from various countries. Year ended 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $'000 $'000 Revenue 40,609 33,634 39,577 32,818 Expenses 38,354 37,039 37,960 36,771 Profit/(loss) 2,255 (3,405) 1,617 (3,953) Net assets (at 31 December) 17,067 14,961 14,803 13,349 Revenue increased by 20.7 per cent mainly due to an increase in the number of both international and domestic students. Insearch Limited is a company limited by guarantee. It provides education courses in English language, business, information technology and other disciplines to Australian and international students. Insearch Limited also provides approximately 1,000 full fee paying students to the University annually. It is accredited as a higher education institution. The following controlled entity has not been reported on separately as it is not considered material by its size or the nature of its operations to the consolidated entity. Entity Name Website accessUTS Pty Limited www.accessuts.uts.edu.au OTHER BODY ASSOCIATED WITH THE UNIVERSITY The following body associated with the University has not been reported on separately as it is not considered material by its size or the nature of its operations. Entity Name Website Sydney Educational Broadcasting Limited www.2ser.uts.edu.au (SEBL) Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 65
  • 74. University of Western Sydney AUDIT OPINION The audits of the University and its continuing controlled entities’ financial reports for the year ended 31 December 2007 resulted in unqualified Independent Auditor’s Reports. The Sydney Graduate School of Management Limited was voluntarily deregistered on 30 June 2007. The audit opinion on the financial report has not been issued. The Crown Solicitor has advised New South Wales Treasury that former directors (or equivalent) of a former statutory body can prepare and submit the financial report but they cannot sign the financial report. As a result, the Auditor-General cannot issue an audit opinion. New South Wales Treasury is investigating ways to overcome this problem. Unless otherwise stated, the following commentary relates to the consolidated entity. PERFORMANCE INFORMATION (Comparative performance data on universities appears in the ‘Universities Overview’ section earlier in this Volume. The information shown below is based on consolidated financial statements.) The University’s current ratio (a measure of its financial liquidity) was two at 31 December 2007, higher than the previous year’s 1.7. It is higher than the State average of 1.6 and the minimum level identified by the Australian Government’s Department of Education, Employment and Workplace Relations (DEEWR) ‘good practice’ parameters. Australian Government grants as a percentage of operating revenue increased from 44.3 per cent in 2006 to 45.2 per cent in 2007. Although higher than the State’s average of 38.6 per cent, it is within the DEEWR ‘good practice’ parameters. Employee benefits and on-costs as a percentage of operating revenue increased significantly from 55.1 per cent in 2006 to 60 per cent in 2007. Although it is above the State’s average of 54.3 per cent, it is within the DEEWR ‘good practice’ parameters. OTHER INFORMATION We identified opportunities for improvement to accounting and internal control procedures and have reported them to management. Due to recent movements in financial markets, the University’s investment portfolio has decreased $7.6 million (7.2 per cent) in the two months since 31 December 2007. Investments were 10.4 per cent of total assets held by the consolidated entity as at 31 December 2007. 66 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 75. ______________________________________________________________________ University of Western Sydney FINANCIAL INFORMATION The consolidated financial information includes the financial reports of the University and its controlled entities. Abridged Income Statements Year ended 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Australian Government grants 191,078 179,835 191,078 179,835 Higher Education Contribution 115,672 106,730 115,672 106,730 Scheme Fees and charges 62,986 70,150 50,082 56,235 Other 52,733 49,220 41,497 38,126 Deferred income – superannuation (17,967) (27,800) (17,967) (27,800) TOTAL REVENUE 404,502 378,135 380,362 353,126 Employee benefits and on-costs 253,422 223,469 239,375 210,127 Depreciation 24,226 22,623 23,755 22,250 Other 115,127 116,975 114,986 108,796 Deferred expense – superannuation (17,967) (27,800) (17,967) (27,800) TOTAL EXPENSES 374,808 335,267 360,149 313,373 Outside equity interest 59 (36) -- -- OPERATING RESULT 29,753 42,832 20,213 39,753 The decrease in fees and charges is due primarily to the implementation of Voluntary Student Unionism and the removal of the University’s ability to charge students an amenities fee. Employee benefits and on-costs increased mainly due to rises in award rates and an increase in redundancy costs. Deferred income and deferred expense reflect movements in the actuarially assessed liability for employees who are members of the State Government’s defined benefit superannuation plans. Because the Australian Government funds these movements, they do not impact the operating result. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 67
  • 76. University of Western Sydney ______________________________________________________________________ Abridged Balance Sheets At 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Current assets 135,866 100,538 129,772 94,956 Non-current assets 874,634 778,866 872,703 776,936 TOTAL ASSETS 1,010,500 879,404 1,002,475 871,892 Current liabilities 93,123 80,606 108,191 85,878 Non-current liabilities 50,534 69,516 47,608 67,817 TOTAL LIABILITIES 143,657 150,122 155,799 153,695 NET ASSETS 866,843 729,282 846,676 718,197 The increase in current assets was due primarily to the reclassification of non-current land and buildings to current assets held for sale. Non-current assets increased mainly due to the revaluation of land and buildings. The decrease in non-current liabilities was largely as a result of a reduction in defined benefit superannuation liabilities of $17.0 million. UNIVERSITY ACTIVITIES The University is constituted under the University of Western Sydney Act 1997. It mainly: provides educational facilities of a university standard, having particular regard to the needs and aspirations of residents of Greater Western Sydney achieves excellence through a commitment to scholarship, teaching, learning and research and provides educational services in the regional, national and international community beginning in the community of Greater Western Sydney disseminates and increases knowledge, undertakes and promotes research and scholarship and contributes to the intellectual life of Greater Western Sydney develops consultancy and entrepreneurial activities, including research and development initiatives, that will contribute to the development of Greater Western Sydney awards diplomas and degrees of Bachelor, Master and Doctor and other certificates and awards. For further information on the University, refer to www.uws.edu.au. 68 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 77. ______________________________________________________________________ University of Western Sydney CONTROLLED ENTITIES The following controlled entities have not been reported on separately as they are not considered material by their size or the nature of their operations to the consolidated entity. The University of Western Sydney assumed control of Television Sydney (TVS) Limited in October 2007 by taking a controlling interest in Education Training Community Television (ETC TV) Limited, which is the only member of TVS. Entity Name Website Cadre Design Pty Limited and Cadre www.cadre.com.au Design Unit Trust Education Training Community * Television (ETC TV) Limited - Television Sydney (TVS) Limited www.tvs.org.au SGSM Limited * Sydney Graduate School of www.sgsm.com.au Management Limited Sydney West International College Pty www.swic.austiger.com Limited University of Western Sydney www.uws.edu.au/about/uwsfoundation/foundation Foundation Limited and University of Western Sydney Foundation Trust UWS College Pty Limited www.uwscollege.edu.au UWS Conference and Residential * Colleges Limited uwsconnect Limited www.uwsconnect.com.au Whitlam Institute Within the University www.whitlam.org of Western Sydney Limited and Whitlam Institute Within the University of Western Sydney Trust * These entities do not have websites Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 69
  • 78. University of Wollongong AUDIT OPINION The audits of the University and its controlled entities’ financial reports for the year ended 31 December 2007 resulted in unqualified Independent Auditor’s Reports, other than for Illawarra Technology Corporation Limited (ITC). We expressed a qualified opinion on ITC’s financial report. The qualification related to the valuation of investments for the comparative period only. We believed that as at 31 December 2007, the fair value of these assets was reliably determined. In our opinion, these assets at 31 December 2006 should have been measured at historical cost, because fair value could not be reliably determined. Had ITC measured the assets at historical cost for the comparative period, its non-current assets at 31 December 2006 would have been reduced by $3.2 million and non-current liabilities - deferred tax would have been reduced by $900,000. Total equity and reserves at 31 December 2006 would have been reduced by $2.3 million. Unless otherwise stated, the following commentary relates to the consolidated entity. PERFORMANCE INFORMATION (Comparative performance data on universities appears in the ‘Universities Overview’ section earlier in this Volume. The information shown below is based on consolidated financial statements.) The University’s current ratio (a measure of its financial liquidity) was 2.3 at 31 December 2007, down from the previous year’s 2.6. It continues to reflect a low risk assessment per the Commonwealth Department of Education, Employment and Workplace Relations (DEEWR) ‘good practice’ parameters. The University intends to use some of its surplus cash and investments to fund its 2008-2011 capital works program. Australian Government grants as a percentage of operating revenue decreased from 41.4 per cent in 2006 to 38.9 per cent in 2007. It is higher than the State’s average of 38.6 per cent and continues to be within the DEEWR ‘good practice’ parameters. Employee benefits and on-costs as a percentage of operating revenue have increased to 56.5 per cent. At this level it is above the State’s average of 54.3 per cent, but remains within the DEEWR ‘good practice’ parameters. OTHER INFORMATION We identified opportunities for improvement to accounting and internal control procedures and have reported them to management. Innovation Campus We reported last year that the University is developing and constructing the Innovation Campus via a joint venture arrangement with a private sector firm. The completed campus will include teaching facilities, research and development facilities, retail and services facilities, a hotel, student accommodation and residential accommodation. During 2007 progress was made on infrastructure works, and in the construction of four buildings on the campus. Expenditure at 31 December 2007 was $28.3 million. The University has approved capital expenditure of $78.0 million for the four buildings. 70 Auditor-General’s Report to Parliament 2008 Volume Two
  • 79. University of Wollongong The success of the campus will depend on the ability of the University and its joint venture partner to attract investors and tenants. They are continuing to pursue a number of opportunities in this regard. Investments Due to the financial market turmoil in recent months, the University’s investment portfolio has decreased $6.9 million (6.2 per cent) in the three months since 31 December 2007. These investments account for 16.1 per cent of total assets held by the consolidated entity at 31 December 2007. Future Capital Works We also reported last year that the University had commenced a significant capital works program. It plans to spend in excess of $150 million over the next few years, including on the buildings at the Innovation Campus. It will fund this program from a combination of internal funds, grants from the Australian Government and debt. The New South Wales Treasurer has given approval for the University to borrow up to $85.0 million. FINANCIAL INFORMATION The consolidated financial information includes the financial reports of the University and its controlled entities: Abridged Income Statements Year ended 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Australian Government grants 136,154 141,418 136,154 141,418 Higher Education Contribution Scheme 55,512 49,652 55,512 49,652 Fees and charges 114,601 111,686 82,259 83,897 Other 43,814 38,440 26,572 23,660 Deferred income - superannuation (9,006) (18,517) (9,006) (18,517) TOTAL REVENUE 341,075 322,679 291,491 280,110 Employee benefits and on-costs 197,697 177,339 167,652 150,331 Depreciation 21,918 25,516 20,016 23,551 Other 118,964 110,757 104,831 101,294 Deferred expense - superannuation (9,006) (18,517) (9,006) (18,517) TOTAL EXPENSES 329,573 295,095 283,493 256,659 Income tax benefit (106) (489) -- (640) Operating result from discontinued operations (2,523) (3,115) -- -- OPERATING RESULT 9,085 24,958 7,998 24,091 The decrease in Australian Government grants was mainly due to grant funding of $20.3 million which was received in the previous financial year, to construct the medical school buildings and the global transnational crime prevention centre. The decrease was offset by an increase in funding of $8.2 million due to increased student numbers and an increase in the funding rate per student; and $4.1 million for the Voluntary Student Unionism Program. Auditor-General’s Report to Parliament 2008 Volume Two 71
  • 80. University of Wollongong The increase in the Higher Education Contribution Scheme was mainly due to an increase in funded places, together with an increased rate charge. Funded places grew from 8,444 in 2006 to 8,825 in 2007. Employee benefits and on-costs increased, primarily because of salary increases and further growth in staff numbers for the medical school and other research activities. Deferred income and deferred expense reflect movements in the actuarially assessed liability for employees who are members of the State Government’s defined benefit superannuation plans. Because the Australian Government funds these movements, they do not impact the operating result. Abridged Balance Sheets At 31 December Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Current assets 135,902 156,914 115,218 141,592 Non-current assets 551,105 524,815 544,522 516,986 TOTAL ASSETS 687,007 681,729 659,740 658,578 Current liabilities 78,873 79,146 62,252 64,639 Non-current liabilities 78,026 88,814 87,192 98,229 TOTAL LIABILITIES 156,899 167,960 149,444 162,868 NET ASSETS 530,108 513,769 510,296 495,710 The decrease in current assets of $21.0 million was mainly due to reduced cash and investment balances, which were used to fund capital works projects during the year. This is reflected in an increase in non-current assets. The decrease in non-current liabilities was mainly due to a further reduction in the University’s defined superannuation liability following an actuarial reassessment. UNIVERSITY ACTIVITIES The University is constituted under the University of Wollongong Act 1989. It mainly: provides educational and research facilities of university standard, having particular regard to the needs of the Illawarra region provides courses of study across a range of fields and carries out research to meet community needs disseminates and increases knowledge, and confers degrees of Bachelor, Master and Doctor and awards diplomas and other certificates. For further information on the University, refer to www.uow.edu.au. 72 Auditor-General’s Report to Parliament 2008 Volume Two
  • 81. University of Wollongong CONTROLLED ENTITIES Illawarra Technology Corporation Limited (ITC) ITC was established to support and add value to the strategic goals and objectives of the University. Its activities include marketing and recruiting for the University, delivering offshore and pre-university education, and providing international contract and consulting services. ITC is a Company limited by shares. It owns ITC Education Ltd, ITC (New Zealand) Limited (ITCNZ), ITC Europe Ltd, ITC (Middle East) Ltd and University of Wollongong Emirates Limited. Management told us that ITC Europe Ltd, which has been inactive since 2001, will be wound up during 2008. ITC (Middle East) Ltd and University of Wollongong Emirates were established on 3 April and 15 August 2007 respectively. These companies are currently not active. Under ITC’s 2006-08 Strategic Plan, the board of ITC is continuing to position ITC and its controlled entities to achieve growth and profitability that represents an acceptable commercial rate of return. ITC’s summarised consolidated financial information is: Year ended 31 December 2007 2006 $'000 $'000 Revenue 55,675 56,605 Expenses 53,637 55,407 Income tax (benefit)/expense (292) 138 Profit 2,330 1,060 Net assets (at 31 December) 5,575 2,579 The Wollongong College operations in Auckland (ITCNZ) ceased in November 2007. According to ITC, this was due to the poor state of the New Zealand education market and recent losses generated by this division. Management told us that in order to look after current students there will continue to be some teaching activities in 2008. A loan to ITCNZ has been fully provided for as a doubtful debt by ITC. The decrease in revenue and related costs was due to the closure of ITC’s Projects division, following a period of significant competitor rationalisation within the industry and subsequent pressure on margins. This resulted in operating losses in recent years. In February 2008, ITC acquired a 60 per cent equity holding (controlling interest) in a specialist education provider for $650,000. In addition, it provided a loan of $650,000 to the education provider repayable at the provider’s discretion. In March 2008, ITC signed a conditional agreement to sell its International English Language Testing System (IELTS) Australia Pty Ltd investment for $3.2 million. Auditor-General’s Report to Parliament 2008 Volume Two 73
  • 82. University of Wollongong Wollongong UniCentre Limited This company, limited by guarantee, aims to complement the academic activities of the University of Wollongong by providing relevant products, services and facilities to meet the diverse social and cultural needs of the University population. In November 2004, the board of the company established a wholly owned subsidiary, UniCentre Conferences and Functions Pty Limited, to provide conference and function services. Wollongong UniCentre Limited’s summarised consolidated financial information is: Year ended 31 December 2007 2006 $'000 $'000 Revenue 14,491 14,999 Expenses 14,755 14,160 Income tax 15 13 (Loss)/profit (279) 826 Net assets (at 31 December) 8,828 9,107 Membership fees have reduced significantly as a result of membership no longer being compulsory. This decrease was offset by an increase in revenue for provision of childcare, and conferences and function services. We reviewed the Company’s ability to continue to operate as a going concern. It reported a consolidated loss of $279,000 for 2007 ($826,000 profit), and is projecting losses for the next five years. We performed a detailed analysis of the Company’s budget, including revised cash flow projections. We are satisfied the going concern assumption is appropriate for the next 12 months. However, the Company will need to continue to closely monitor its financial situation. University of Wollongong Recreation and Aquatic Centre Limited This Company, limited by guarantee, principally provides aquatic and recreational facilities to the University community and the general public. Year ended 31 December 2007 2006 $'000 $'000 Revenue 2,176 3,392 Expenses 3,106 2,917 Income tax -- -- (Loss)/profit (930) 475 Net assets (at 31 December) 5,445 6,375 The operations of the company were heavily impacted by the change to voluntary student unionism introduced by the Australian Government. Revenue from student membership fell substantially, resulting in an operating loss of $930,000 for the year ($475,000 profit). The loss, together with an unfavourable liquidity ratio and projected losses for the next few years, had called into question the company’s ability to continue as a going concern. The University is committed to supporting the ongoing development of the company and as such, if required, will provide financial support and assist the company in its ongoing activities. 74 Auditor-General’s Report to Parliament 2008 Volume Two
  • 83. University of Wollongong The company’s long term viability will depend on its ability to attract members. It has implemented several strategies to address this matter. The following controlled entity has not been reported on separately as it is not considered material by its size or the nature of its operations to the consolidated entity. Entity Name Sydney Business School Pty Ltd Auditor-General’s Report to Parliament 2008 Volume Two 75
  • 84. Minister for Primary Industries Game Council of New South Wales New South Wales Grains Board Refer to Appendix 1 for: Trustees of the Farrer Memorial Research Scholarship Fund Wild Dog Destruction Board Wine Grapes Marketing Board 77
  • 85. Game Council of New South Wales AUDIT OPINION The audit of the Council and its controlled entity’s financial reports for the year ended 30 June 2007 resulted in unqualified Independent Auditor’s Reports. KEY ISSUES While an unqualified opinion was issued on the Council’s financial report, the following significant matter was identified. Material Uncertainty Regarding Continuation as a Going Concern The financial report stated that the Council had an excess of liabilities over assets at the reporting date and its ongoing viability is dependent on its ability to derive sufficient future government funding. This indicated material uncertainty about the Council’s ability to continue as a going concern. In the event the Council was unable to continue as a going concern, it may be required to realise assets and extinguish its liabilities other than in the normal course of business and at amounts different from those currently stated in the financial report. This has been an ongoing issue for the past three financial years notwithstanding the Treasurer has extended funding to the Council until 30 April 2008. We recommend that positive measures be taken to resolve the Council’s ongoing financial viability. FINANCIAL INFORMATION Year ended 30 June 2007 2006 $’000 $’000 Revenue 864 2,454 Expenses 2,325 1,965 (Deficit)/surplus (1,461) 489 Net liabilities (at 30 June) 1,606 145 The reduction in New South Wales Government Grants to $250,000 ($2.0 million in 2005-06) significantly impacted on the revenue for the year. Furthermore, an increase in general administration costs to $1.1 million ($843,000), contributed significantly to the increase in expenses. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 79
  • 86. Game Council of New South Wales __________________________________________________________________ COUNCIL ACTIVITIES The Game Council of New South Wales was constituted under the Game and Feral Animal Control Act 2002 (the Act). The Council’s functions include: representing the interest of the licensed game hunters in matters arising under the Act administering the licensing system under the Act for game hunters and to engage agents for that purpose providing necessary advice to the Minister for Primary Industries on game and feral animal control and also makes recommendations to relevant New South Wales Government Ministers for the purpose of declaring the availability of public lands for game hunting. The Council is subject to the direction and control of the Minister for Primary Industries in the exercise of its functions. For further information on the Council, refer to www.gamecouncil.nsw.gov.au. CONTROLLED ENTITY Game Council Division The Division provides personnel services to the Council. The Division assumed responsibility for all employee related expenses and liabilities which are then funded by the Council. This entity will always record a nil net profit. 80 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 87. New South Wales Grains Board AUDIT OPINION The audit of the Board’s financial report for the period ended 10 October 2007 resulted in an unqualified Independent Auditor’s Report. KEY ISSUES Termination of New South Wales Grains Board Scheme of Arrangement On 10 November 2000, an Administrator was appointed to run the affairs of the Board under the Grains Marketing Act 1991. The Administrator was also appointed as scheme administrator for the Scheme of Arrangement between the Board and its creditors as approved by the Supreme Court of New South Wales on 24 October 2001. The responsibilities of the Scheme Administrator included realising the Board’s assets, paying creditors and taking action for the recovery of damages where possible in line with the terms of the Scheme. Distributions to creditors and asset recoveries under the Scheme are now complete and the Scheme was terminated on 10 October 2007 upon the occurrence of all the terminating events specified in the scheme. Further details on the operations of the Administrator and the financial reports are included in the Board’s annual report for the period ended 10 October 2007. FINANCIAL INFORMATION Abridged Income Statement For the period 1 October 2005 to 24 October 2001 to 10 October 2007 30 September 2005 $’000 $’000 TOTAL REVENUE 272,925 23,685 TOTAL EXPENSES 57,503 95,649 PROFIT/(LOSS) 214,422 (71,964) Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 81
  • 88. New South Wales Grain Board______________________________________________________________________ The profit recorded resulted from the write back of loans extinguished on the termination of the Scheme in accordance with its terms. Abridged Balance Sheet As at 10 October 2007 30 September 2005 $’000 $’000 TOTAL ASSETS -- 2,751 TOTAL LIABILITIES -- 217,713 NET LIABILITIES -- 214,422 BACKGROUND The Board was established under the Grains Marketing Act 1991 which provides that the Board may ‘do all things necessary for and incidental to achieving the purpose of improving the marketing of coarse grains and oilseeds in New South Wales’. Details of the collapse of the Board can be found in the Independent Commission Against Corruption’s publication ‘Report on Investigation of Certain Officers of the New South Wales Grains Board’, August 2003 available at www.icac.nsw.gov.au. 82 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 89. Minister for Sport and Recreation Refer to Appendix 1 for: Parramatta Stadium Trust 83
  • 90. Premier Refer to Appendix 1 for: Trustees of the ANZAC Memorial Building 85
  • 91. Treasurer Residual Business Management Corporation 87
  • 92. Residual Business Management Corporation AUDIT OPINION The audits of the Corporation and its controlled entities’ financial reports for the year ended 30 June 2007 resulted in unqualified Independent Auditor’s Reports. Unless otherwise stated the following commentary relates to the consolidated entity. KEY ISSUES Oversight and Delays in Financial Reporting We recommend that oversight arrangements of the Corporation and its entities be formalised and documented, including the role of the Treasury and the manner the Corporation is to report to it. We previously recommended that the New South Wales Treasury’s oversight of the Corporation and its entities be increased to compensate for the limited internal controls, and to ensure the financial reports of the entities are submitted for audit within statutory time frames. The Corporation has established new reporting arrangements with Treasury. However, these have not been formalised and documented. The delays in reporting for the year ended 30 June 2006 resulted in the Corporations and controlled entities 2007 financial reports also being delayed. However, work papers prepared by the Corporation and its controlled entities to support the 2007 financial report disclosures improved significantly from the prior year, and we are advised that the financial reports for 30 June 2008 will be submitted for audit on time. FINANCIAL INFORMATION The consolidated financial information includes the financial reports of the Corporation and its controlled entities. Abridged Consolidated Income Statement Year ended 30 June Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Total revenue 3,871 4,031 441 519 Total expenditure 5,934 4,172 1,993 3,208 Loss 2,063 141 1,552 2,689 The main reason for the increase in the consolidated loss was the write-down of a non-current intangible asset held by a controlled entity Pacific Solar Pty Limited by $4.4 million. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 89
  • 93. Residual Business Management Corporation __________________________________________________________ Abridged Consolidated Balance Sheet At 30 June Consolidated Parent 2007 2006 2007 2006 $’000 $’000 $’000 $’000 Current assets 18,022 16,092 5,460 4,681 Non-current assets 5,605 10,928 4,093 5,747 TOTAL ASSETS 23,627 27,020 9,553 10,428 Current liabilities 4,147 5,399 3,250 2,573 Non-current liabilities 470 364 -- -- TOTAL LIABILITIES 4,617 5,763 3,250 2,573 NET ASSETS 19,010 21,257 6,303 7,855 Current assets include $12.6 million of cash and investments. CORPORATION ACTIVITIES The Corporation is a statutory authority constituted by the Pacific Power (Dissolution) Act 2003. It is responsible for the management of the residual assets, rights and liabilities of the former Pacific Power, and has no role in undertaking new business activities. For further information on the Corporation, refer to www.pacificpower.net.au. CONTROLLED ENTITIES The Corporation is the parent entity of Pacific Power (Subsidiary No. 1) Pty Ltd and the majority shareholder of Pacific Solar Pty Limited. The following controlled entities have not been reported on separately as they are not considered material by their size or the nature of their operations to the consolidated entity. Entity Name Website Pacific Power (Subsidiary No. 1) Pty Ltd www.pacificpower.net.au Pacific Solar Pty Limited www.pacsolar.com.au 90 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 94. Section Three Performance Auditing Performance Audit Reports Tabled in Parliament since Volume Six of 2007 Performance Audits in Progress This Section provides a summary of Performance Audit Reports presented to Parliament. The full Reports are available on the Audit Office website at http://www.audit.nsw.gov.au/reports.htm 91
  • 95. Performance Audit Reports Tabled in Parliament since Volume Six of 2007 We have tabled five performance audit reports in Parliament since Volume Six 2007 of our New South Wales Auditor-General’s Report on financial audits. Our findings and recommendations for any performance audit reports can be found on our website www.audit.nsw.gov.au/publications/reports/performance/performance_reports.htm. AGEING WORKFORCE - TEACHERS The report examines how the Department of Education and Training is managing the impact of an ageing workforce on the educational services it delivers. Key Findings The Department is faced with the loss of large numbers of retiring teachers and their associated skills. While the overall impact of the ageing workforce is likely to be gradual, there is still a risk of teacher shortages. Statistics show that 41 per cent of school teachers are aged 50 years and over. The Department estimates that in the next five years (to 2012) more than 16,000 or 33 per cent of permanent school teachers will be reaching retirement age. TAFE is in a similar situation, with some Institutes expecting 30 to 40 per cent of teaching staff to retire in the next five years. The Department has focused considerable effort on recruiting and retaining younger teachers. But a continuing reliance on the recruitment and retention of younger workers may not be sustainable, given the ageing population and an increasingly tight labour market. The Department’s aggregate projections indicate a state-wide oversupply of school teachers. However, we consider that this could mask shortages at specific schools and in specific subject areas, such as mathematics and science. Projections for TAFE NSW Institutes typically only look forward a year. Importantly, the New South Wales Government’s Mature Workforce Policy and Guidelines recognised the need for strategies for a mature workforce as early as 1998. There is good guidance material available from the Department of Premier and Cabinet on workforce planning and mature aged retention strategies. The Department has increased its focus on retaining the critical knowledge and skills of staff who are about to retire. There are also moves to introduce phased retirement. The report was tabled in Parliament on 13 February 2008. MANAGING DEPARTMENTAL AMALGAMATIONS The report examines two case studies - amalgamations creating the Department of Commerce (2003) and the Department of Primary Industries (2004). It assesses if the amalgamations were well planned and implemented, and achieved anticipated outcomes and benefits. Amalgamations are major projects that are challenging for managers and must be managed at all levels of the new organisation. Services to clients and staff morale need to be maintained during job uncertainty, and business systems need to be consolidated. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 93
  • 96. Performance Audit Reports tabled in Parliament since Volume Six of 2007 Key Findings Both Commerce and DPI substantially achieved their amalgamation financial savings targets. The Departments are expected to achieve savings of about $150 million and $190 million respectively over their first four years. However, the Commerce amalgamation is not providing other expected benefits, such as improved and lower cost customer service. The Primary Industries amalgamation achieved more by combining services that had similar customers. The Commerce amalgamation combined a number of services with different customers and consequently operates as a group of semi-independent organisations. To assist with future amalgamations we have produced a better practice guide with checklists. We also support improved reporting of performance against amalgamation objectives in annual reports. The report and the better practice guide were tabled in Parliament on 5 March 2008. EFFICIENCY OF THE OFFICE OF THE DIRECTOR OF PUBLIC PROSECUTIONS The Office of the Director of Public Prosecutions (ODPP) prosecutes the most serious criminal cases on behalf of the people of New South Wales. This audit examines how well the ODPP can demonstrate its efficiency. The ODPP is independent of the government. This does not, however, remove the need for it to manage public resources appropriately and demonstrate value for money. In the course of the audit we noted that the ODPP has developed a sound reputation for its prosecutorial integrity among the legal profession. Key Findings The ODPP does not have good enough information on the cost of its services, which is a significant barrier to good management. It also needs to improve its efficiency indicators, establish targets, and compare its performance over time and to others. It then needs to use this to support decision making and enhance reporting. Despite the inadequacy of performance information, our investigations identified some significant opportunities for the ODPP to improve its management practices. These include better managing Crown Prosecutors, monitoring and improving staff satisfaction, and reporting more transparently to stakeholders. The ODPP also needs to make sure it has the right number of prosecutors at the right level to minimise costs while delivering quality services. Our research into practices in prosecution services elsewhere suggests changes to how the ODPP allocates and processes cases could lead to savings. It is not possible, however, to be sure without better information on current costs and services. The ODPP has not demonstrated a capacity to keep pace with reforms to public sector and legal practice management and accountability. It needs a very senior, professional manager with a clear mandate to improve resource management and accountability right across its operations. The report was tabled in Parliament on 26 March 2008. 94 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 97. Performance Audit Reports tabled in Parliament since Volume Six of 2007 MANAGING THE AMALGAMATION OF THE GREYHOUND AND HARNESS RACING REGULATORY AUTHORITY This report examines the management of the amalgamation of the regulatory functions of the former Greyhound Racing Authority and Harness Racing Authority to form the Greyhound and Harness Racing Regulatory Authority. Key Findings The amalgamation achieved staff reductions, the sale of a surplus building and the refurbishment of the Authority’s remaining building. However, the amalgamation started more than three years ago and is still not complete. It has cost more than anticipated and stakeholders are dissatisfied. This is largely due to the surplus building not being sold promptly, the refurbishment costing more than anticipated and reductions in staff numbers taking too long. The key expectations of the amalgamation were for the racing industry bodies to receive a return from the sale of the surplus building and also receive annual savings of $800,000 based on staff reductions. The amalgamation proceeds were to be used to pay for the proposed greyhound registration system. Instead, the Authority is seeking $535,000 from Greyhound Racing NSW. The audit notes that there were significant operational issues at the time of amalgamation and that these diverted the Authority from concentrating on the amalgamation. These included resolving high levels of bad debts and disciplinary actions against two senior stewards. The audit recommends that the Authority finalise outstanding amalgamation issues, with specific attention to finalising its structure, installing the greyhound registration system and reporting on the amalgamation’s costs and benefits. Other recommendations focus on the Authority connecting its planning and budgeting, agreeing efficiency dividends with the Minister, and developing a strategy for communicating with stakeholders. The report was tabled in Parliament on 3 April 2008. WORKING WITH HOTELS AND CLUBS TO REDUCE ALCOHOL-RELATED CRIME Both the NSW Police Force (Police) and the Office of Liquor, Gaming and Racing (OLGR) have a role to play in reducing alcohol-related crime on or near licensed premises. One way to do this is to stop people from reaching high levels of intoxication. To help achieve this pubs and clubs must serve alcohol responsibly. In this audit we wanted to find out whether Police and OLGR work with hotels and clubs to reduce alcohol-related crime. Specifically we wanted to know whether they: work with licensed premises to promote responsible service of alcohol take appropriate action for breaches of responsible service of alcohol laws. Key Findings Excluding domestic violence incidents, the number of alcohol-related assaults has almost doubled over the last ten years from 10,305 in 1997-98 to 20,475 in 2006-07. Almost a third of these occur on licensed premises such as hotels and clubs. Although alcohol-related crime is increasing, we found that the number of alcohol-related assaults had reduced or stabilised in 14 per cent of police commands over the last two years. OLGR has also had success in reducing alcohol-related assaults in a number of licensed premises. A balance between education and enforcement is most likely to help licensees comply with responsible service of alcohol laws and reduce drunken behaviour. This means supporting licensees to serve alcohol responsibly, then taking appropriate action when offences occur. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 95
  • 98. Performance Audit Reports tabled in Parliament since Volume Six of 2007 We found that both Police and OLGR work with pubs and clubs to promote and enforce responsible service of alcohol laws. However, Police tend to rely more on enforcement rather than preventing breaches from occurring in the first place. One of the key problems the audit identified was inconsistencies in how each agency dealt with offences. For example, one licensing officer might take a licensee to court for a practice that another issued a warning for. And it is only in recent years that Police and OLGR have focused on reducing intoxication. This includes taking action against licensees. Patrons also need to be educated about responsible drinking and their obligations under the liquor laws. Although patron education campaigns have been run in some regions, more is needed statewide. We have recommended a joint approach to licensing, more patron education, better guidance on working with licensees, and public reporting on action taken against problem pubs and clubs. Both agencies support our recommendations and have projects underway to address many of the issues raised in our report. The report was tabled in Parliament on 23 April 2008. 96 ___________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 99. Performance Audits in Progress The planned tabling dates for audits in progress are: Title Planned Tabling Date Protecting our Rivers: Follow-up of Performance Audit 21 May 2008 nd Waste Reduction and Recycling Efforts in Government Agencies 2 quarter of 2008 Managing Injured Officers: NSW Police Force 2nd quarter of 2008 Out of Hospital Programs: NSW Health 3rd quarter of 2008 Heavy Vehicle Safety 3rd quarter of 2008 Improving Literacy and Numeracy in Public Schools 4th quarter of 2008 Administration of Grants 4th quarter of 2008 For up-to-date information on audits in progress, refer to www.audit.nsw.gov.au. Auditor-General’s Report to Parliament 2008 Volume Two ___________________________________________ 97
  • 100. Appendices Appendix 1 Agencies not reported elsewhere in this Volume Appendix 2 Financial Reports not received by Statutory Date (as at 6 May 2008) Appendix 3 Financial Reports received but Audit Incomplete by Statutory Date (as at 6 May 2008) Appendix 4 Erratum 99
  • 101. Appendix 1 – Agencies not reported elsewhere in this Volume The following audits resulted in unqualified Independent Auditor’s Reports and did not identify any significant issues or risks. Entity Name Website CHEC English Language Centre www.coffsenglish.com.au Parramatta Stadium Trust www.parramattastadium.com.au - Parramatta Stadium Trust Division * Technical Education Trust Funds * Trustees of the ANZAC Memorial Building www.dpc.nsw.gov.au Trustees of the Farrer Memorial Research www.dpi.nsw.gov.au Scholarship Fund Unilinc Limited www.unilinc.edu.au Wild Dog Destruction Board * - Wild Dog Destruction Board Division * Wine Grapes Marketing Board www.wgmb.net.au * These entities do not have websites Auditor-General’s Report to Parliament 2008 Volume Two __________________________________________ 101
  • 102. Appendix 2 - Financial Reports not received by Statutory Date (as at 6 May 2008) Entity Name Period/Year Ended Due Date Date Financial Report Received A.C.N. 125 694 546 Pty Ltd 31 December 2007 11 February 2008 Not yet received for audit Centre for United States Pty Limited 31 December 2007 11 February 2008 12 February 2008 CHEC English Language Centre 30 June 2007 10 August 2007 4 February 2008 Dosimetry & Imaging Pty Ltd 31 December 2007 11 February 2008 Obtained exemption from New South Wales Treasury not to prepare 2007 financial reports Elastagen Pty Limited 31 December 2007 11 February 2008 12 February 2008 Macquarie University Private 31 December 2007 11 February 2008 Hospital Trust Macquarie University Property 31 December 2007 11 February 2008 22 April 2008 Investment Company No. 2 Pty Limited Macquarie University Property 31 December 2007 11 February 2008 22 April 2008 Investment Company Pty Limited Macquarie University Property 31 December 2007 11 February 2008 Investment Trust MU Private Hospital Pty Limited 31 December 2007 11 February 2008 22 April 2008 MU Sub-Trust No. 1 31 December 2007 11 February 2008 MU Sub-Trust No. 2 31 December 2007 11 February 2008 MU Sub-Trust No. 3 31 December 2007 11 February 2008 MU Sub-Trust No. 4 31 December 2007 11 February 2008 MUPH Clinic Pty Limited 31 December 2007 11 February 2008 22 April 2008 MUPH Clinic Sub-Trust 31 December 2007 11 February 2008 MUPH Hospital Pty Limited 31 December 2007 11 February 2008 22 April 2008 MUPH Hospital Sub-Trust 31 December 2007 11 February 2008 MUPI Holding Trust No. 1 31 December 2007 11 February 2008 MUPI Holding Trust No. 2 31 December 2007 11 February 2008 MUPI Holding Trust No. 3 31 December 2007 11 February 2008 MUPI Holding Trust No. 4 31 December 2007 11 February 2008 MUPI Holding Trust No. 5 31 December 2007 11 February 2008 MUPI Holding Trust No. 6 31 December 2007 11 February 2008 Rural Lands Protection Boards 31 December 2006 11 February 2007 28 March 2008 Division Rural Lands Protection Boards 31 December 2007 11 February 2008 31 March 2008 Division The Bosch Institute 31 December 2007 11 February 2008 12 February 2008 The Institute for Magnetic 31 December 2007 11 February 2008 12 February 2008 Resonance Research The Sydney Institutes of Health and 31 December 2007 11 February 2008 12 February 2008 Medical Research 102 __________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 103. __________________________ Appendix 2 - Financial Reports not received by Statutory Date (as at 6 May 2008) Entity Name Period/Year Ended Due Date Date Financial Report Received Ucom Eleven Pty Limited 12 February 2007 26 March 2007 12 February 2008 Ucom Fifteen Pty Limited 31 December 2007 11 February 2008 12 February 2008 Ucom Fourteen Pty Limited 14 January 2007 26 February 2007 12 February 2008 Ucom Seven Pty Limited 13 April 2007 25 May 2007 12 February 2008 Ucom Six Pty Limited 15 July 2007 27 August 2007 12 February 2008 Ucom Sixteen Pty Limited 31 December 2007 11 February 2008 12 February 2008 United States Studies Centre 31 December 2007 11 February 2008 12 February 2008 Limited UNSW & Study Abroad – Friends and 31 December 2007 11 February 2008 Not yet received for U.S. Alumni, Inc audit UNSW Asia 21 December 2007 1 February 2008 4 February 2008 UNSW Asia Foundation Limited 31 December 2007 11 February 2008 Obtained exemption from New South Wales Treasury not to prepare 2007 financial reports Wentworth Annexe Limited 31 December 2007 11 February 2008 12 February 2008 Auditor-General’s Report to Parliament 2008 Volume Two __________________________________________ 103
  • 104. Appendix 3 - Financial Reports received but Audit Incomplete by Statutory Date (as at 6 May 2008) The Public Finance and Audit Act 1983 requires that we issue an audit opinion within ten weeks of receiving an agency’s financial report. The Act also states that we cannot issue our opinion until the agency has signed its financial report. ACN 093 230 374 Pty Limited (formerly TAFE Global Pty Limited) The audit of the financial report is now complete. We expect to issue the Independent Auditor’s Report soon. Rural Lands Protection Boards Division The audit of the financial report for the year ended 31 December 2006 is in progress. The financial report was received on 28 March 2008 and the audit will commence in May 2008. Services UNE Limited The audit of the financial report for the year ended 31 December 2007 is not complete due to issues associated with workpapers supporting the financial report. State Council of Rural Lands Protection Boards The audit of the financial report for the year ended 31 December 2007 is in progress. We expect to issue the opinion soon. State Council of Rural Lands Protection Boards Division The audit of the financial report for the year ended 31 December 2007 is in progress. We expect to issue the opinion soon. University of New England Sports Association The audit of the financial report for the year ended 30 June 2007 is yet to commence. Controlled Entitles of the University of New South Wales Acyte Biotech Pty Limited The audit of the financial report for the year ended 31 December 2007 is nearing completion. The delay in the audit was caused by issues identified in the valuation of the convertible notes and call options. We expect to issue the opinion soon. AGSM Ltd The audit of the financial report for the year ended 31 December 2007 is in progress. The delay in the audit was caused by issues arising from transfer of business functions. We expect to issue the opinion soon. 104 __________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 105. __________ Appendix 3 - Financial Reports received but Audit Incomplete by Statutory Date (as at 6 May 2008) Audio Nomad Pty Limited The audit of the financial report for the year ended 31 December 2007 is nearing completion. Delay has occurred due to issues identified, including the valuation and recognition of preference shares. We expect to issue an opinion soon. Cystemix Pty Ltd The audit of the financial report for the year ended 31 December 2007 is nearing completion. The delay in the audit was caused by issues identified in the valuation of the convertible notes and call options. We expect to issue the opinion soon. HepatoCell Therapeutics Pty Ltd The audit of the financial report for the year ended 31 December 2007 is nearing completion. The delay in the audit was caused by issues identified in the valuation of the convertible notes and call options. We expect to issue the opinion soon. NewSouth Four Pty Ltd The audit of the financial report for the year ended 31 December 2007 is almost complete. We expect to issue the opinion soon. NewSouth Innovations Pty Limited The audit of the financial report for the year ended 31 December 2007 is almost complete. The delay in the audit was caused by issues identified, including valuation of investments and possible underpayment of taxes in relation to an employment related issue. We expect to issue the opinion soon. Qucor Pty Limited The audit of the financial report for the year ended 31 December 2007 is nearing completion. The delay in the audit was caused by issues identified in the valuation of the convertible notes and call options. We expect to issue the opinion soon. Former Statutory Bodies We are unable to complete the audits of statutory bodies that have been abolished, dissolved or its name removed from Schedule 2 of the Public Finance and Audit Act 1983. The Crown Solicitor has advised New South Wales Treasury that former directors (or equivalent) of a former statutory body can prepare and submit the financial report but they cannot sign the financial report and, as a result, the Auditor General cannot issue an audit opinion. New South Wales Treasury is investigating ways to overcome this problem. Campus Pre-School Incorporated This controlled entity of Charles Sturt University was voluntarily wound up at 31 December 2007 and is being deregistered. Olive Street Services Limited This controlled entity of Charles Sturt University was voluntarily wound up at 31 December 2007 and deregistered on 18 February 2008. Rural Australia Foundation Limited This controlled entity of Charles Sturt University was voluntarily wound up at 31 December 2007 and is being deregistered. Auditor-General’s Report to Parliament 2008 Volume Two __________________________________________ 105
  • 106. Appendix 3 - Financial Reports received but Audit Incomplete by Statutory Date (as at 6 May 2008) __________ Tow Truck Authority of New South Wales The Tow Truck Authority of New South Wales was abolished with effect from 30 November 2007 by the Tow Truck Industry Amendment Regulation Act 2007. UNSW Asia This controlled entity of the University of New South Wales was placed into voluntary liquidation on 24 December 2007. 106 __________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 107. Appendix 4 – Erratum Erratum to Volume One 2008, page 91 The NSW Ovine Johne's Disease Transaction Based Contribution Scheme for the year ended 30 June 2007 had a qualified Independent Auditor's Report. Commentary on the Scheme will be published in Volume Four of my 2008 Report. Auditor-General’s Report to Parliament 2008 Volume Two __________________________________________ 107
  • 108. Index 109
  • 109. Index A Page Board, Physiotherapists Registration ................Vol 4 2007 Board, Podiatrists Registration .......................Vol 4 2007 A.C.N. 093 230 374 Pty Limited ..................... Vol 4 2007 Board, Psychologists Registration ....................Vol 4 2007 A.C.N. 125 694 546 Pty Limited .............................57 Board, Rental Bond.....................................Vol 5 2007 Aboriginal Affairs, Department of ................... Vol 6 2007 Board, Veterinary Practitioners ......................Vol 4 2007 Aboriginal Affairs, Minister of........................ Vol 6 2007 Board, Wild Dog Destruction ................................101 Aboriginal Housing Office Group of Staff........... Vol 5 2007 Board, Wine Grapes Marketing..............................101 Aboriginal Housing Office............................. Vol 5 2007 Board, Workers’ Compensation (Dust Diseases) ...Vol 5 2007 Aboriginal Land Council, New South Wales ........ Vol 6 2007 Boards, State Council of Rural Lands Protection ..Vol 2 2007 Access Macquarie Limited.....................................36 Border Rivers-Gwydir Catchment accessUTS Pty Limited .........................................65 Management Authority............................Vol 4 2007 Acyte Biotech Pty Ltd ..........................................57 Bosch Institute, The............................................ 44 Adult Migrant English Service, NSW ................. Vol 4 2007 Brett Whiteley Foundation, The......................Vol 4 2007 Ageing, Disability and Home Care, Department of Vol 5 2007 Budget Result, The Statement of the ...............Vol 3 2007 Agencies not reported elsewhere in this Volume ...... 101 Building and Construction Industry Long Agricultural Business Research Institute ..................48 Service Payments Corporation ...................Vol 5 2007 Agricultural Scientific Collections Trust............ Vol 6 2007 Building Insurers’ Guarantee Corporation ..........Vol 5 2007 AGSM Limited ....................................................57 Building Professionals Board ..........................Vol 4 2007 ANZAC Health and Medical Research Foundation Buroba Pty Limited .....................................Vol 5 2007 Trust Fund.......................................... Vol 1 2008 ANZAC Health and Medical Research Foundation . Vol 1 2008 C ANZAC Memorial Building, Trustees of the .............. 101 C.B. Alexander Foundation............................Vol 6 2007 Architects Registration Board, NSW................. Vol 4 2007 Cabinet, Department of Premier and ...............Vol 5 2007 Art Gallery of New South Wales Foundation ....... Vol 4 2007 Cadre Design Pty Limited ..................................... 69 Art Gallery of New South Wales Trust .............. Vol 5 2007 Cadre Design Unit Trust ....................................... 69 Arts Education Foundation Trust .................... Vol 4 2007 Campus Pre-School Incorporated............................ 32 Arts, Minister for ...................................... Vol 5 2007 Cancer Institute Division ..............................Vol 6 2007 Arts, Sport and Recreation, Department of the... Vol 5 2007 Cancer Institute NSW ..................................Vol 6 2007 Asbestos Diseases Research Foundation, Casino Control Authority Division ....................Vol 4 2007 The (ADRF) ......................................... Vol 5 2007 Casino Control Authority, New South Wales........Vol 4 2007 Attorney General....................................... Vol 5 2007 Centennial Park and Moore Park Trust ..............Vol 5 2007 Attorney General’s Department ..................... Vol 5 2007 Centennial Parklands Foundation ....................Vol 5 2007 Audio Nomad Pty Ltd ...........................................57 Central West Catchment Management Authority ..Vol 4 2007 Audit Communication with Ministers................ Vol 4 2007 Centre for United States Studies Pty Limited............. 44 Aus Health International Pty Limited ............... Vol 6 2007 Cessnock Uni-Clinic Trust ..................................... 61 Australian Centre for Advanced Computing Charles Sturt Foundation Limited (and Trust) ............ 32 and Communications Pty Ltd .................... Vol 5 2007 Charles Sturt Services Limited ............................... 32 Australian Education Consultancy Limited.................57 Charles Sturt University ....................................... 28 Australian Institute of Asian Culture CHEC English Language Centre .............................101 and Visual Arts Limited, The .................... Vol 5 2007 Chief Investigator of the Office of Transport Australian Museum Trust.............................. Vol 5 2007 Safety Investigations ..............................Vol 4 2007 Australian Plant DNA Bank Limited..........................39 Children, Office for ....................................Vol 4 2007 Australian Proteome Analysis Facility Limited ............36 Chipping Norton Lake Authority ......................Vol 6 2007 Australian Technology Park Precinct Chiropractors Registration Board ....................Vol 4 2007 Management Ltd (ATP) ........................... Vol 6 2007 City West Housing Pty Limited .......................Vol 5 2007 Australian Water Technologies Pty Ltd ............ Vol 4 2007 Climate Change, Environment and Water, Minister for...9 AWT International (Thailand) Limited ............. Vol 4 2007 Clinical Excellence Commission Special B Purpose Service Entity ............................Vol 1 2008 Clinical Excellence Commission ......................Vol 1 2008 Banana Industry Committee .......................... Vol 4 2007 CMBF Limited.................................................... 36 Belgenny Farm Agricultural Heritage Coal Compensation Board, New South Wales ......Vol 5 2007 Centre Trust ....................................... Vol 1 2007 Cobar Water Board Division ...........................Vol 2 2007 Biobank Pty Limited ............................................39 Cobar Water Board .....................................Vol 2 2007 Board of Studies Casual Staff Division .............. Vol 4 2007 Coffs Harbour Technology Park Limited ............Vol 4 2007 Board of Studies, Office of the ...................... Vol 5 2007 Commerce, Department of............................Vol 5 2007 Board of Studies, The ................................. Vol 4 2007 Commerce, Minister for ...............................Vol 5 2007 Board of Surveying and Spatial Information ....... Vol 4 2007 Commission for Children and Young People, NSW.Vol 4 2007 Board of Vocational Education and Community Relations Commission for Training, NSW...................................... Vol 4 2007 a Multicultural NSW ...............................Vol 4 2007 Board, Building Professionals ........................ Vol 4 2007 Community Relations Commission, Office of the ..Vol 4 2007 Board, Chiropractors Registration ................... Vol 4 2007 Community Services, Department of ................Vol 5 2007 Board, Cobar Water ................................... Vol 2 2007 Community Services, Minister for ....................Vol 5 2007 Board, Dental Technicians Registration ............ Vol 4 2007 Cooks Cove Development Corporation (CCDC) .....Vol 5 2007 Board, Liquor Administration ........................ Vol 4 2007 Corporation Sole, ‘Minister Administering Board, Lord Howe Island .............................. Vol 5 2007 the Environmental Planning and Board, Mine Subsidence............................... Vol 5 2007 Assessment Act 1979’ .............................Vol 5 2007 Board, New South Wales Coal Compensation ...... Vol 5 2007 Corporation Sole, ‘Minister Administering Board, New South Wales Grains ..............................81 the Heritage Act 1977’............................Vol 5 2007 Board, New South Wales Medical .................... Vol 4 2007 Corrective Services, Department of .................Vol 5 2007 Board, NSW Architects Registration................. Vol 4 2007 Corruption, Independent Commission Against .....Vol 5 2007 Board, NSW Vocational Education and Country Energy Gas Pty Limited......................Vol 4 2007 Training Accreditation............................ Vol 4 2007 Country Energy..........................................Vol 4 2007 Board, Nurses and Midwives.......................... Vol 4 2007 Cowra Japanese Garden Maintenance Board, Optical Dispensers Licensing ................ Vol 4 2007 Foundation Limited................................Vol 1 2008 Board, Optometrists Registration ................... Vol 4 2007 Cowra Japanese Garden Trust........................Vol 1 2008 Board, Osteopaths Registration...................... Vol 4 2007 Crime Commission Division, New South Wales .....Vol 4 2007 Auditor-General’s Report to Parliament 2008 Volume Two __________________________________________ 111
  • 110. Index Crime Commission, New South Wales .............. Vol 4 2007 Financial Reports Received but Audit Crime Commission, Office of the Incomplete by Statutory Date (as at 6 May 2008) ... 104 New South Wales .................................. Vol 4 2007 Fire Brigades, New South Wales...................... Vol 5 2007 Crown Employees (NSW Fire Brigades Forestry Commission Division......................... Vol 6 2007 Firefighting Staff, Death and Disability) Forestry Commission of New South Wales Superannuation Fund, The....................... Vol 4 2007 (Trading as Forests NSW) ......................... Vol 6 2007 Crown Entity, The ..................................... Vol 5 2007 Foundation for the Historic Houses Trust Crown Lands Homesites Program .................... Vol 4 2007 of NSW Limited .................................... Vol 5 2007 Crown Leaseholds Entity.............................. Vol 5 2007 Foundation for the Historic Houses Trust of NSW . Vol 5 2007 Crown Property Portfolio ............................. Vol 5 2007 Cystemix Pty Limited .......................................... 57 G Game Council Division ......................................... 80 D Game Council of New South Wales.......................... 79 Dams Safety Committee .............................. Vol 4 2007 Gaming and Racing, Minister for ..................... Vol 5 2007 Degrees in Catering Pty Ltd................................... 61 Gosford Water Supply Authority ..................... Vol 4 2007 Delta Electricity Australia Pty Ltd .................. Vol 4 2007 GraduateSchool.com Pty Limited ........................... 60 Delta Electricity........................................ Vol 4 2007 Greater Southern Area Health Service Special Dental Board of New South Wales................... Vol 1 2008 Purpose Service Entity ............................ Vol 1 2008 Dental Technicians Registration Board ............. Vol 4 2007 Greater Southern Area Health Service .............. Vol 1 2008 Department of Aboriginal Affairs.................... Vol 6 2007 Greater Western Area Health Service Special Department of Ageing, Disability and Home Care Vol 5 2007 Purpose Service Entity ............................ Vol 1 2008 Department of Commerce ............................ Vol 5 2007 Greater Western Area Health Service ............... Vol 1 2008 Department of Community Services ................ Vol 5 2007 Greyhound and Harness Racing Regulatory Department of Corrective Services ................. Vol 5 2007 Authority Division.................................. Vol 5 2007 Department of Education and Training............. Vol 4 2007 Greyhound and Harness Racing Regulatory Department of Environment and Climate Change Vol 1 2008 Authority ............................................ Vol 5 2007 Department of Health................................. Vol 1 2008 Growth Centres Commission .......................... Vol 4 2007 Department of Housing, NSW ........................ Vol 5 2007 Department of Juvenile Justice ..................... Vol 5 2007 H Department of Lands .................................. Vol 5 2007 Hamilton Rouse Hill Trust ............................. Vol 5 2007 Department of Local Government................... Vol 5 2007 Hawkesbury-Nepean Catchment Department of Planning .............................. Vol 5 2007 Management Authority............................ Vol 4 2007 Department of Premier and Cabinet................ Vol 5 2007 Health Administration Corporation Special Department of Primary Industries................... Vol 6 2007 Purpose Service Entity ............................ Vol 1 2008 Department of State and Regional Development . Vol 5 2007 Health Administration Corporation .................. Vol 1 2008 Department of the Arts, Sport and Recreation.... Vol 5 2007 Health Care Complaints Commission ................ Vol 4 2007 Department of Water and Energy ................... Vol 6 2007 Health Care Complaints Commission, Director of Public Prosecutions, Office of ......... Vol 5 2007 Office of the........................................ Vol 5 2007 Dosimetry & Imaging Pty Ltd ................................. 57 Health Foundation, New South Wales ............... Vol 5 2007 Downtown Utilities Pty Limited ..................... Vol 4 2007 Health Overview ........................................ Vol 1 2008 Dumaresq - Barwon Border Rivers Commission.... Vol 4 2007 Health, Department of ................................ Vol 1 2008 Duquesne Utilities Pty Ltd............................ Vol 5 2007 Health, Minister for .................................... Vol 1 2008 HealthQuest Special Purpose Service Entity.......... Vol 1 2008 E HealthQuest ............................................. Vol 1 2008 Education and Training, Department of............ Vol 4 2007 HepatoCell Therapeutics Pty Limited ..................... 57 Education and Training, Minister for........................ 13 Historic Houses Trust of New South Wales ......... Vol 5 2007 Education Training Community Television Historic Houses Trust of NSW Limited, (ETC TV) Limited ........................................... 69 Foundation for the ................................ Vol 5 2007 Elastagen Pty Limited .......................................... 44 Historic Houses Trust of NSW, Election Funding Authority of New South Wales .. Vol 4 2007 Foundation for the ................................ Vol 5 2007 Electoral Commission, New South Wales........... Vol 5 2007 Home Care Service Division ........................... Vol 5 2007 Electricity Industry, Overview of the ............... Vol 4 2007 Home Care Service of New South Wales ............ Vol 5 2007 Electricity Tariff Equalisation Ministerial Home Purchase Assistance Fund ..................... Vol 5 2007 Corporation ........................................ Vol 5 2007 Honeysuckle Development Corporation ............. Vol 4 2007 Emergency Services, Minister for.................... Vol 5 2007 Housing, Minister for................................... Vol 5 2007 Energy Industries Superannuation Scheme......... Vol 5 2007 Housing, NSW Department of......................... Vol 5 2007 Energy Industries Superannuation Scheme......... Vol 5 2007 Hunter New England Area Health Service Energy Management International Pty Limited.... Vol 4 2007 Special Purpose Service Entity .................. Vol 1 2008 Energy, Minister for ................................... Vol 4 2007 Hunter New England Area Health Service .......... Vol 1 2008 EnergyAustralia......................................... Vol 4 2007 Hunter Uni-Clinics Pty Limited .............................. 61 Environment and Climate Change, Department of Vol 1 2008 Hunter Water Australia Pty Limited. ................ Vol 4 2007 Environment Protection Authority .................. Vol 1 2008 Hunter Water Corporation ............................ Vol 4 2007 Environmental Trust................................... Vol 6 2007 Hunter-Central Rivers Catchment Eraring Energy .......................................... Vol 4 2007 Management Authority............................ Vol 4 2007 F I Fair Trading Administration Corporation ........... Vol 4 2007 Illawarra Technology Corporation Limited (ITC) ......... 73 Farrer Memorial Research Scholarship Independent Commission Against Corruption ...... Vol 5 2007 Fund, Trustees of the ................................... 101 Independent Pricing and Regulatory Tribunal Festival Development Corporation .................. Vol 4 2007 Division .............................................. Vol 6 2007 Film and Television Office, New South Wales ..... Vol 5 2007 Independent Pricing and Regulatory Tribunal ..... Vol 6 2007 Finance, Minister for .................................. Vol 5 2007 Independent Transport Safety and Reliability Financial Counselling Trust Fund .................... Vol 4 2007 Regulator Division ................................. Vol 4 2007 Financial Reports Not Received by Independent Transport Safety and Statutory Date (as at 6 May 2008) ...................... 102 Reliability Regulator .............................. Vol 4 2007 112 __________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 111. Index Industrial Relations, Minister for .................... Vol 5 2007 Milk Marketing (NSW) Pty Limited ...................Vol 5 2007 Infrastructure Implementation Corporation ....... Vol 5 2007 Mine Subsidence Board ................................Vol 5 2007 Ingham Health Research Institute ................... Vol 1 2008 Mineral Resources, Minister for ......................Vol 5 2007 Insearch Limited ................................................65 Minister Assisting the Minister for Finance .........Vol 1 2008 Institute for Magnetic Resonance Research ...............44 Minister for Aboriginal Affairs ........................Vol 6 2007 Institute of Psychiatry ................................ Vol 4 2007 Minister for Ageing and Minister for Institute of Sport Division............................. Vol 4 2007 Disability Services .................................Vol 5 2007 Institute of Sport, New South Wales ................ Vol 4 2007 Minister for Arts ........................................Vol 5 2007 Institute of Teachers, NSW ........................... Vol 4 2007 Minister for Climate Change, Institute of Teachers, Office of the................. Vol 4 2007 Environment and Water ....................................9 Integral Energy Australia.............................. Vol 4 2007 Minister for Commerce ................................Vol 5 2007 Internal Audit Bureau Division ....................... Vol 4 2007 Minister for Community Services .....................Vol 5 2007 Internal Audit Bureau of New South Wales ........ Vol 4 2007 Minister for Disability Services .......................Vol 5 2007 International Livestock Resources and Minister for Education and Training ........................ 13 Information Centre Ltd ...................................48 Minister for Emergency Services .....................Vol 5 2007 J Minister for Energy .....................................Vol 4 2007 Minister for Finance ....................................Vol 5 2007 Jenolan Caves Reserve Trust Division ......................12 Minister for Gaming and Racing ......................Vol 5 2007 Jenolan Caves Reserve Trust .................................11 Minister for Health .....................................Vol 1 2008 John Lewis and Pamela Lightfoot Trust ....................57 Minister for Housing ....................................Vol 5 2007 Judicial Commission of New South Wales .......... Vol 5 2007 Minister for Industrial Relations ......................Vol 5 2007 Justice Health Special Purpose Service Entity..... Vol 1 2008 Minister for Justice.....................................Vol 5 2007 Justice Health .......................................... Vol 1 2008 Minister for Juvenile Justice ..........................Vol 5 2007 Justice, Minister for ................................... Vol 5 2007 Minister for Lands ......................................Vol 5 2007 Juvenile Justice, Department of .................... Vol 5 2007 Minister for Local Government .......................Vol 5 2007 Juvenile Justice, Minister for ........................ Vol 5 2007 Minister for Mineral Resources .......................Vol 5 2007 Minister for Planning ...................................Vol 5 2007 L Minister for Police ......................................Vol 5 2007 Lachlan Catchment Management Authority........ Vol 4 2007 Minister for Ports and Waterways....................Vol 1 2008 Lake Illawarra Authority .............................. Vol 4 2007 Minister for Primary Industries .............................. 77 LAMS Foundation Limited .....................................36 Minister for Redfern Waterloo ........................Vol 6 2007 LAMS International Pty Limited ..............................36 Minister for Roads ......................................Vol 6 2007 Land Development Working Account................ Vol 5 2007 Minister for Small Business ............................Vol 4 2007 Landcom................................................. Vol 5 2007 Minister for Sport and Recreation........................... 83 Lands, Department of ................................. Vol 5 2007 Minister for State Development ......................Vol 5 2007 Lands, Minister for ..................................... Vol 5 2007 Minister for Tourism....................................Vol 4 2007 Legal Aid Commission of New South Wales ........ Vol 5 2007 Minister for Transport..................................Vol 5 2007 Legal Aid Commission, Office of the ................ Vol 5 2007 Minister for Water Utilities ...........................Vol 6 2007 Legal Aid Temporary Staff Division.................. Vol 5 2007 Minister for Youth ......................................Vol 4 2007 Legal Opinions Provided by the Crown Solicitor .. Vol 1 2007 Ministerial Corporation for Industry .................Vol 5 2007 Legal Profession Admission Board ................... Vol 5 2007 Ministry for Police ......................................Vol 4 2007 Legislature (Audit of Members’ Additional Ministry of Transport...................................Vol 5 2007 Entitlements), The .......................................... 3 Mitchell Services Limited ..................................... 32 Legislature, The........................................ Vol 5 2007 Motor Accidents Authority of New South Wales ...Vol 5 2007 Liability Management Ministerial Corporation..... Vol 5 2007 Motor Accidents Authority of New Library Council of New South Wales (State Library)Vol 5 2007 South Wales, Office of ..................................... Vol 5 2007 Library of New South Wales Foundation, State ... Vol 5 2007 Motor Vehicle Repair Industry Authority ............Vol 4 2007 Lifetime Care and Support Authority of MU Private Hospital Pty Limited ............................. 36 New South Wales .................................. Vol 5 2007 MU Sub-Trust No. 1............................................. 36 Liquor Administration Board ......................... Vol 4 2007 MU Sub-Trust No. 2............................................. 36 Local Government, Department of.................. Vol 5 2007 MU Sub-Trust No. 3............................................. 36 Local Government, Minister for...................... Vol 5 2007 MU Sub-Trust No. 4............................................. 36 Lord Howe Island Board ............................... Vol 5 2007 MUPH Clinic Pty Limited ...................................... 36 Lotteries Corporation, New South Wales ........... Vol 5 2007 MUPH Clinic Sub-Trust ......................................... 36 Lower Murray-Darling Catchment MUPH Hospital Pty Limited ................................... 36 Management Authority ........................... Vol 4 2007 MUPH Hospital Sub-Trust...................................... 36 Luna Park Reserve Trust ....................................... Vol 4 2007 MUPI Holding Trust No. 1 ..................................... 36 MUPI Holding Trust No. 2 ..................................... 36 M MUPI Holding Trust No. 3 ..................................... 36 Macquarie Generation................................. Vol 4 2007 MUPI Holding Trust No. 4 ..................................... 36 Macquarie Graduate School of Management Pty Limited MUPI Holding Trust No. 5 ..................................... 36 (MGSM) .......................................................35 MUPI Holding Trust No. 6 ..................................... 36 Macquarie University...........................................33 Murray Catchment Management Authority .........Vol 4 2007 Macquarie University Private Hospital Trust ..............36 Murrumbidgee Catchment Management Authority Vol 4 2007 Macquarie University Professorial Museum of Applied Arts and Sciences, Superannuation Scheme ..................................36 Trustees of..........................................Vol 5 2007 Macquarie University Property Investment Company No. 2 Pty Limited ...............36 N Macquarie University Property Namoi Catchment Management Authority ..........Vol 4 2007 Investment Company Pty Limited.......................36 National Marine Science Centre Pty Ltd ................... 48 Macquarie University Property Natural Resources Commission Division .............Vol 4 2007 Investment Trust ...........................................36 Natural Resources Commission .......................Vol 4 2007 Marine Parks Authority ................................ Vol 1 2008 New South Wales Aboriginal Land Council ..........Vol 6 2007 Maritime Authority of NSW Division ................. Vol 6 2007 New South Wales Casino Control Authority.........Vol 4 2007 Maritime Authority of NSW ........................... Vol 6 2007 New South Wales Coal Compensation Board .......Vol 5 2007 Medical Board, New South Wales .................... Vol 4 2007 New South Wales Crime Commission Division ......Vol 4 2007 Auditor-General’s Report to Parliament 2008 Volume Two __________________________________________ 113
  • 112. Index New South Wales Crime Commission ............... Vol 4 2007 Office of the New South Wales Rural New South Wales Crime Commission, Assistance Authority............................... Vol 1 2007 Office of the ....................................... Vol 4 2007 Office of the NSW Food Authority ................... Vol 5 2007 New South Wales Electoral Commission ............ Vol 5 2007 Office of the Police Integrity Commission .......... Vol 4 2007 New South Wales Film and Television Office ...... Vol 5 2007 Office of the Protective Commissioner and New South Wales Fire Brigades ...................... Vol 5 2007 Public Guardian – Common Fund ................ Vol 1 2007 New South Wales Government ................................... Office of the Protective Commissioner and Telecommunications Authority (Telco), The . Vol 5 2007 Public Guardian .................................... Vol 5 2007 New South Wales Grains Board............................... 81 Office of the Redfern Waterloo Authority .......... Vol 6 2007 New South Wales Health Foundation ............... Vol 5 2007 Office of the State Property Authority.............. Vol 5 2007 New South Wales Institute of Sport ................. Vol 4 2007 Office of the Sydney Harbour Foreshore Authority Vol 5 2007 New South Wales Lotteries Corporation............ Vol 5 2007 Office of the WorkCover Authority .................. Vol 5 2007 New South Wales Medical Board..................... Vol 4 2007 Office of World Youth Day Co-ordination AuthorityVol 5 2007 New South Wales Rural Assistance Authority ...... Vol 1 2007 Olive Street Services Limited ................................ 32 New South Wales Rural Assistance Authority, Ombudsman’s Office ................................... Vol 5 2007 Office of the ....................................... Vol 1 2007 Optical Dispensers Licensing Board .................. Vol 4 2007 New South Wales Rural Fire Service ................ Vol 5 2007 Optometrists Registration Board ..................... Vol 4 2007 New South Wales Technical and Further Osteopaths Registration Board ....................... Vol 4 2007 Education Commission Division ................. Vol 4 2007 Overview of Health..................................... Vol 1 2008 New South Wales Treasury Corporation ............ Vol 4 2007 Overview of Rail Services ............................. Vol 4 2007 Newcastle International Sports Centre Trust ...... Vol 1 2008 Overview of the Electricity Industry................. Vol 4 2007 Newcastle Port Corporation .......................... Vol 6 2007 Overview of Transport and Roads Services ......... Vol 5 2007 Newcastle Showground and Exhibition Ovine Johne’s Disease Transaction Based Centre Trust ....................................... Vol 6 2007 Contribution Scheme, NSW....................... Vol 1 2008 NewSouth Eight Pty Ltd........................................ 57 NewSouth Five Pty Ltd......................................... 57 P NewSouth Four Pty Ltd ........................................ 57 Pacific Industry Services Corporation Pty Limited Vol 5 2007 NewSouth Global (Thailand) Limited........................ 57 Pacific Power (Subsidiary No 1) Pty Ltd ................... 90 NewSouth Global India Pvt Limited ......................... 57 Pacific Solar Pty Limited ...................................... 90 NewSouth Innovations Pty Limited ......................... 57 Pacific Western Pty Limited .......................... Vol 4 2007 NewSouth One Pty Ltd ......................................... 57 Parklands Foundation Limited ........................ Vol 5 2007 NewSouth Seven Pty Ltd ...................................... 57 Parliamentary Contributory Superannuation Fund Vol 5 2007 NewSouth Six Pty Ltd .......................................... 57 Parramatta Park Trust ................................. Vol 4 2007 Norsearch Limited .............................................. 39 Parramatta Stadium Trust ...................................101 North Coast Area Health Service Special Parramatta Stadium Trust Division ........................101 Purpose Service Entity ........................... Vol 1 2008 Payments to Other Government Bodies North Coast Area Health Service .................... Vol 1 2008 Under the Control of the Minister .............. Vol 4 2007 Northern Rivers Catchment Performance Audit Reports Tabled in Management Authority ........................... Vol 4 2007 Parliament since Volume Six of 2007.................. 93 Northern Sydney and Central Coast Area Health Performance Audits in Progress ............................. 97 Service Special Purpose Service Entity ........ Vol 1 2008 Pharmacy Board of New South Wales ............... Vol 1 2008 Northern Sydney and Central Coast Area Health Physiotherapists Registration Board ................. Vol 4 2007 Service .............................................. Vol 1 2008 Planning, Department of .............................. Vol 5 2007 NorthPower Energy Services Pty Limited .......... Vol 4 2007 Planning, Minister for .................................. Vol 5 2007 NSW Adult Migrant English Service .................. Vol 4 2007 Podiatrists Registration Board ....................... Vol 4 2007 NSW Architects Registration Board.................. Vol 4 2007 Police Force, NSW ...................................... Vol 5 2007 NSW Board of Vocational Education and Training Vol 4 2007 Police Integrity Commission Division ................ Vol 4 2007 NSW Businesslink Pty Limited ........................ Vol 5 2007 Police Integrity Commission .......................... Vol 4 2007 NSW Commission for Children and Young People . Vol 4 2007 Police, Minister for ..................................... Vol 5 2007 NSW Department of Housing ......................... Vol 5 2007 Police, Ministry for ..................................... Vol 4 2007 NSW Fire Brigades Superannuation Pty Ltd ........ Vol 2 2007 Port Kembla Port Corporation ........................ Vol 6 2007 NSW Food Authority ................................... Vol 5 2007 Ports and Waterways, Minister for................... Vol 1 2008 NSW Food Authority, Office of the .................. Vol 5 2007 Premier and Cabinet, Department of ............... Vol 5 2007 NSW Institute of Teachers ............................ Vol 4 2007 Premier ........................................................... 85 NSW Minerals Industry/University of Primary Industries, Department of .................. Vol 6 2007 New South Wales Education Trust ...................... 57 Primary Industries, Minister for ............................. 77 NSW Ovine Johne’s Disease Transaction Probiotic Health Pty Limited ................................. 61 Based Contribution Scheme ..................... Vol 1 2008 Protective Commissioner and Public NSW Police Force ...................................... Vol 5 2007 Guardian – Common Fund, Office of the ....... Vol 1 2007 NSW Self Insurance Corporation ..................... Vol 5 2007 Protective Commissioner and Public NSW Vocational Education and Training Guardian, Office of................................ Vol 5 2007 Accreditation Board .............................. Vol 4 2007 Psychologists Registration Board ..................... Vol 4 2007 Nurses and Midwives Board........................... Vol 4 2007 Public Transport Ticketing Corporation Division .. Vol 5 2007 Public Transport Ticketing Corporation............. Vol 5 2007 O Public Trustee NSW .................................... Vol 5 2007 Office for Children..................................... Vol 4 2007 Office of the Board of Studies ....................... Vol 5 2007 Q Office of the Community Relations Commission .. Vol 4 2007 Qualified Independent Audit Reports Issued ....... Vol 5 2007 Office of the Community Relations Commission .. Vol 4 2007 Qucor Pty Limited .............................................. 57 Office of the Director of Public Prosecutions ..... Vol 5 2007 Office of the Health Care Complaints Commission Vol 5 2007 R Office of the Institute of Teachers.................. Vol 4 2007 Office of the Legal Aid Commission................. Vol 5 2007 Rail Corporation New South Wales................... Vol 4 2007 Office of the Motor Accidents Authority of Rail Infrastructure Corporation ...................... Vol 4 2007 New South Wales .................................. Vol 5 2007 Rail Services, Overview of ............................ Vol 4 2007 Office of the New South Wales Crime Commission Vol 4 2007 Redfern Waterloo Authority, Office of the ......... Vol 6 2007 114 __________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two
  • 113. Index Redfern Waterloo, Minister for ...................... Vol 6 2007 Sydney Catchment Authority Division ...............Vol 5 2007 Redfern-Waterloo Authority.......................... Vol 6 2007 Sydney Catchment Authority .........................Vol 5 2007 Regional Land Management Corporation Pty Ltd.. Vol 4 2007 Sydney Cricket and Sports Ground Trust Remarkspdf Pty Ltd.............................................48 Division .............................................Vol 4 2007 Rental Bond Board ..................................... Vol 5 2007 Sydney Cricket and Sports Ground Trust............Vol 4 2007 Rental Housing Assistance Fund ..................... Vol 5 2007 Sydney Desalination Plant Pty Limited ..............Vol 4 2007 Residual Business Management Corporation...............89 Sydney Educational Broadcasting Limited ................. 65 Responsible Gambling Fund .......................... Vol 5 2007 Sydney Ferries Corporation ...........................Vol 5 2007 Rice Marketing Board for the State of Sydney Graduate School of Management New South Wales .................................. Vol 6 2007 Limited....................................................... 69 Riverina Citrus.......................................... Vol 6 2007 Sydney Harbour Authority Casual Staff Rivservices Limited .............................................32 Division, The........................................Vol 5 2007 Roads and Traffic Authority Division ................ Vol 6 2007 Sydney Harbour Authority, Office of the ...........Vol 5 2007 Roads and Traffic Authority of New South Wales . Vol 6 2007 Sydney Harbour Foreshore Authority ................Vol 5 2007 Roads, Minister for..................................... Vol 6 2007 Sydney Institutes of Health and Rouse Hill Hamilton Collection Pty Ltd, The....... Vol 5 2007 Medical Research, The.................................... 44 Royal Alexandra Hospital for Children Sydney Metropolitan Catchment Special Purpose Service Entity .................. Vol 1 2008 Management Authority............................Vol 4 2007 Royal Alexandra Hospital for Children, The ....... Vol 1 2008 Sydney Olympic Park Authority Sydney Royal Botanic Gardens and Domain Trust .......... Vol 4 2007 Olympic Park Aquatic and Athletic Rural Assistance Authority, New South Wales ..... Vol 1 2007 Centres Division ....................................Vol 5 2007 Rural Australia Foundation Limited .........................32 Sydney Olympic Park Authority.......................Vol 5 2007 Rural Fire Service, New South Wales ............... Vol 5 2007 Sydney Olympic Park Authority, The Office of the ..................................Vol 5 2007 S Sydney Opera House Trust ............................Vol 5 2007 SAS Trustee Corporation - Pooled Fund ............ Vol 5 2007 Sydney Pilot Service Pty Ltd ..........................Vol 6 2007 SAS Trustee Corporation Division .................... Vol 5 2007 Sydney Ports Corporation .............................Vol 6 2007 SAS Trustee Corporation .............................. Vol 5 2007 Sydney South West Area Health Service Self Insurance Corporation, NSW .................... Vol 5 2007 Special Purpose Service Entity...................Vol 1 2008 Services UNE Limited...........................................48 Sydney South West Area Health Service ............Vol 1 2008 Sesquicentenary of Responsible Government Sydney Water Corporation ............................Vol 4 2007 Trust Fund.......................................... Vol 5 2007 Sydney West Area Health Service Special SGSM Limited ....................................................69 Purpose Service Entity ............................Vol 1 2008 Small Business Development Corporation Sydney West Area Health Service ....................Vol 1 2008 of New South Wales................................ Vol 42007 Sydney West International College Pty Small Business, Minister for .......................... Vol 4 2007 Limited....................................................... 69 South Eastern Sydney and Illawarra Area Health Service Special Purpose T Service Entity ...................................... Vol 1 2008 TCorp Nominees Pty Limited .........................Vol 4 2007 South Eastern Sydney and Illawarra Area Teacher Housing Authority of New South Wales ...Vol 5 2007 Health Service ..................................... Vol 1 2008 Technical and Further Education Commission Southern Cross University.....................................37 Division, New South Wales .......................Vol 4 2007 Southern Rivers Catchment Management Technical and Further Education Commission .....Vol 4 2007 Authority ........................................... Vol 4 2007 Technical Education Trust Funds...........................101 Special Minister of State .............................. Vol 5 2007 Television Sydney (TVS) Limited ............................ 69 Sport and Recreation, Minister for ............................ 83 The Asbestos Diseases Research Foundation .......Vol 5 2007 Sporting Injuries Committee ......................... Vol 4 2007 The Australian Institute of Asian Culture State and Regional Development, Department of Vol 5 2007 and Visual Arts Limited ...........................Vol 5 2007 State Council of the Rural Lands Protection The Board of Studies ...................................Vol 4 2007 Boards Division (the Division) ................... Vol 2 2007 The Bosch Institute ............................................ 44 State Council of the Rural Lands The Brett Whiteley Foundation.......................Vol 4 2007 Protection Boards ................................. Vol 2 2007 The Crown Employees (NSW Fire Brigades State Development, Minister for .................... Vol 5 2007 Firefighting Staff, Death and Disability) State Emergency Service ............................. Vol 5 2007 Superannuation Fund..............................Vol 4 2007 State Library of New South Wales Foundation .... Vol 5 2007 The Crown Entity .......................................Vol 5 2007 State Property Authority.............................. Vol 5 2007 The Hamilton Rouse Hill Trust........................Vol 5 2007 State Property Authority, Office of the ............ Vol 5 2007 The Legislature (Audit of Members’ State Rail Authority.................................... Vol 4 2007 Additional Entitlements) ...................................3 State Records Authority of New South Wales...... Vol 5 2007 The Legislature .........................................Vol 5 2007 State Sports Centre Trust Division of the The New South Wales Government Government Service .............................. Vol 4 2007 Telecommunications Authority (Telco).........Vol 5 2007 State Sports Centre Trust............................. Vol 4 2007 The Office of the Sydney Olympic Park State Super Financial Services Australia Authority ............................................Vol 5 2007 Limited ............................................. Vol 5 2007 The Rouse Hill Hamilton Collection Pty Ltd ........Vol 5 2007 State Transit Authority Division ..................... Vol 5 2007 The Royal Alexandra Hospital for Children .........Vol 1 2008 State Transit Authority................................ Vol 5 2007 The Sydney Harbour Foreshore Authority State Water Corporation .............................. Vol 4 2007 Casual Staff Division...............................Vol 5 2007 State, Special Minister of ............................. Vol 5 2007 The Sydney Institutes of Health and Statement of the Budget Result, The............... Vol 3 2007 Medical Research .......................................... 44 Superannuation Administration Corporation The University of Newcastle Research (trading as Pillar Administration)............... Vol 5 2007 Associates Limited......................................... 61 Sydney 2009 World Masters Games Organising The University of Sydney ..................................... 40 Committee Division ............................... Vol 4 2007 TheraPPY Pty Limited ......................................... 61 Sydney 2009 World Masters Games Organising Total State Sector Accounts ..........................Vol 3 2007 Committee ......................................... Vol 4 2007 Tourism, Minister for...................................Vol 4 2007 Sydney Business School Pty Ltd ..............................75 Tow Truck Authority of New South Wales ..........Vol 5 2006 Auditor-General’s Report to Parliament 2008 Volume Two __________________________________________ 115
  • 114. Index TransGrid................................................ Vol 4 2007 University of Western Sydney ............................... 66 Transport Infrastructure Development University of Wollongong Recreation and Corporation ........................................ Vol 4 2007 Aquatic Centre Limited................................... 74 Transport, Minister for ................................ Vol 5 2007 University of Wollongong ..................................... 70 Transport, Ministry of ................................. Vol 5 2007 UNSW & Study Abroad – Friends and Treasurer ......................................................... 87 US Alumni, Inc.............................................. 57 Treasury Corporation Division........................ Vol 4 2007 UNSW (Thailand) Limited ..................................... 57 Treasury Corporation, New South Wales ........... Vol 4 2007 UNSW Asia Foundation Limited .............................. 57 Treasury ................................................. Vol 5 2007 UNSW Asia School Limited .................................... 57 Trust, Agricultural Scientific Collections........... Vol 6 2007 UNSW Asia........................................................ 50 Trust, Art Gallery of New South Wales ............. Vol 5 2007 UNSW Global (Singapore) Pte Limited ...................... 57 Trust, Arts Education Foundation ................... Vol 4 2007 UNSW Global Pty Limited ..................................... 56 Trust, Australian Museum............................. Vol 5 2007 UNSW Hong Kong Foundation Limited...................... 57 Trust, Belgenny Farm Agricultural UNSW Hong Kong Limited ..................................... 57 Heritage Centre .................................. Vol 1 2007 UoN Foundation Ltd............................................ 61 Trust, Centennial Park and Moore Park ............ Vol 5 2007 UoN Services Limited .......................................... 61 Trust, Environmental.................................. Vol 6 2007 UON, Singapore Pte Ltd ....................................... 61 Trust, Jenolan Caves Reserve ................................ 11 Upper Parramatta Catchment Trust Division....... Vol 5 2007 Trust, Luna Park Reserve ............................. Vol 4 2007 Upper Parramatta River Catchment Trust .......... Vol 5 2007 Trust, Newcastle International Sports Centre ..... Vol 1 2008 UWS College Pty Limited ...................................... 69 Trust, Newcastle Showground and UWS Conference and Residential Exhibition Centre ................................. Vol 6 2007 Colleges Limited ........................................... 69 Trust, Parramatta Park ............................... Vol 4 2007 uwsconnect Limited ........................................... 69 Trust, Parramatta Stadium.................................. 101 Trust, Royal Botanic Gardens and Domain ......... Vol 4 2007 V Trust, State Sports Centre............................ Vol 4 2007 Valley Commerce Pty Limited ........................ Vol 5 2007 Trust, Sydney Cricket and Sports Ground .......... Vol 4 2007 Veterinary Practitioners Board ....................... Vol 4 2007 Trust, Sydney Opera House........................... Vol 5 2007 Vocational Education and Training Trust, The Hamilton Rouse Hill ...................... Vol 5 2007 Accreditation Board, NSW........................ Vol 4 2007 Trust, Upper Parramatta River Catchment ........ Vol 5 2007 Vocational Education and Training, Trust, Wentworth Park Sporting Complex ......... Vol 4 2007 NSW Board of....................................... Vol 4 2007 Trust, Wollongong Sportsground..................... Vol 5 2007 Trustees of the ANZAC Memorial Building ............... 101 W Trustees of the Farrer Memorial Research Scholarship Fund ............................ 101 Waste Recycling and Processing Corporation Trustees of the Museum of Applied (WSN Environment Solutions) .................... Vol 5 2007 Arts and Sciences ................................. Vol 5 2007 Water and Energy, Department of................... Vol 6 2007 Water Utilities, Minister for .......................... Vol 6 2007 U Wentworth Annexe Limited .................................. 44 Wentworth Park Sporting Complex Trust ........... Vol 4 2007 U@MQ Limited ................................................... 36 Western Catchment Management Authority ....... Vol 4 2007 Ucom Eleven Pty Limited...................................... 44 Western Research Institute................................... 32 Ucom Fifteen Pty Limited ..................................... 44 Western Sydney Buses Division ....................... Vol 5 2007 Ucom Fourteen Pty Limited .................................. 44 Whitlam Institute Within the University Ucom Seven Pty Limited....................................... 44 of Western Sydney Limited .............................. 69 Ucom Six Pty Limited .......................................... 44 Whitlam Institute Within the University Ucom Sixteen Pty Limited..................................... 44 of Western Sydney Trust ................................. 69 UNE Partnerships Pty Limited ................................ 48 Wild Dog Destruction Board Division ......................101 UNE Vision Pty Ltd .............................................. 48 Wild Dog Destruction Board .................................101 Unilinc Limited ................................................ 101 Wine Grapes Marketing Board...............................101 Uniprojects Pty Limited............................... Vol 5 2007 Wollongong Sportsground Trust Division ............ Vol 5 2007 United States Studies Centre Limited ...................... 44 Wollongong Sportsground Trust ...................... Vol 5 2007 Universities Admissions Centre (NSW & ACT) Wollongong UniCentre Limited .............................. 74 Pty Limited......................................... Vol 5 2007 WorkCover Authority of New South Wales.......... Vol 6 2007 Universities Overview.......................................... 15 WorkCover Authority, Office of the ................. Vol 5 2007 University of New England Professorial Workers Compensation Commission Superannuation Fund ..................................... 48 of New South Wales ............................... Vol 6 2007 University of New England Sports Association ............ 48 Workers Compensation Nominal Insurer University of New England .................................... 45 (trading as The NSW WorkCover Scheme) ..... Vol 1 2008 University of New South Wales Foundation ............... 56 Workers’ Compensation (Dust Diseases) Board .... Vol 5 2007 University of New South Wales Foundation World Youth Day Co-ordination Authority .......... Vol 5 2007 Limited ....................................................... 57 Wyong Water Supply Authority ....................... Vol 4 2007 University of New South Wales International House Limited .............................................. 57 Y University of New South Wales Press Limited............. 57 University of New South Wales............................... 49 Youth, Minister for ..................................... Vol 4 2007 University of Newcastle Research Associates Limited, The ............................................... 61 Z University of Newcastle ....................................... 58 Zoological Parks Board Division ...................... Vol 5 2007 University of Sydney Professorial Zoological Parks Board of NSW ....................... Vol 5 2007 Superannuation System................................... 44 University of Sydney, The..................................... 40 University of Technology, Sydney ........................... 62 University of Western Sydney Foundation Limited ....................................................... 69 University of Western Sydney Foundation Trust .......................................................... 69 116 __________________________________________ Auditor-General’s Report to Parliament 2008 Volume Two

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