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Victorian Auditor-General’s Office Annual Report 2011–12

Accountable officer’s declaration

In accordance with Financial Management Act 1994, I am pleased to present the Report of Operations for the Victorian Auditor General’s Office for the year ended 30 June 2012.

Signature of D D R PEARSON (Auditor-General)

D D R PEARSON
Auditor-General
Melbourne

24 August 2012

The President
Legislative Council
Parliament House
Melbourne Vic 3002
The Speaker
Legislative Assembly
Parliament House
Melbourne Vic 3002

Dear Presiding Officers

I am pleased to transmit, in accordance with section 7B of the Audit Act 1994, my annual report of the Victorian Auditor-General’s Office for the year ended 30 June 2012 for presentation to Parliament.

Yours faithfully

Signature of D D R PEARSON (Auditor-General)

D D R PEARSON
Auditor-General

24 August 2012

Introduction

The Victorian Auditor-General’s Office (VAGO) provides the Victorian Parliament with assurance about the financial integrity of the state and the efficiency, economy and effectiveness of public sector performance.

Principal legislation

The Constitution Act 1975, Part V, Division 3 governs the appointment and independence of the Auditor‑General. Parliament’s Public Accounts and Estimates Committee (PAEC) recommends the appointment of the Auditor-General, who can only be removed from office by a resolution from both Houses of Parliament.

The Audit Act 1994 defines the powers and responsibilities of the Auditor-General and VAGO.

Audit responsibilities

Under the Audit Act 1994, the Auditor-General has a legislative mandate to:

The Auditor-General’s mandate includes government departments, public bodies, educational institutions, public hospitals and local government authorities.

The Auditor-General also conducts audits to determine whether financial benefits that agencies provide to non‑government bodies are applied economically, efficiently and effectively.

Annual plan

Under section 7A of the Audit Act 1994, the Auditor-General must prepare an annual plan and present it to Parliament after consulting with PAEC. The Act, however, recognises the Auditor-General’s ultimate independence, autonomy and direct accountability to Parliament.

This annual report presents our achievements against the Annual Plan 2011–12 which was tabled in Parliament on 24 May 2011. The plan documented our projected key outcomes and outputs, influences on the public sector and major areas of audit interest for the year and the three subsequent years.

Available resources At 30 June 2012, we:
  • had 176 in-house staff (170 at 30 June 2011)
  • engaged 41 audit service providers (40 during 2010–11)
  • received $36.96 million in funding from Parliament ($36.16 million in 2010–11).
Financial management

Our net financial result for the year was a surplus of $578 173 (surplus of $515 847 in 2010–11).

Attest audit fee income for the year was $22.55 million ($21.90 million in 2010–11).

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At a glance

Reports and advice

Quantity

We tabled 37 reports in Parliament:

Quality

93 per cent of Parliamentarians who responded to surveys were satisfied with our reports. External assessors scored reports they reviewed better than our target of 80 per cent.

Timeliness
Cost
Future focus

We will consolidate the alignment of audit topics with community interest, and further improve report quality and stakeholder engagement.

Parliamentarians satisfaction with VAGO reports and services (per cent)

Parliamentarians satisfaction with VAGO reports and services (per cent)

Audit opinions

Quantity

We issued:

Quality

External reviews found all audits assessed complied in all material aspects with the standards.

Timeliness
Cost
Future focus

We will encourage improvement in performance reporting and further leverage the sector’s investment in accrual accounting.

Audit opinions issued within the statutory deadline (per cent)

Audit opinions issued within the • statutory deadline (per cent)

Promoting accountability

Impact of audits
Leveraging our experience
Future focus

Next year we will finalise our preparation for the next triennial performance audit of the office. This will include ongoing work on our quality framework, and responding to recent peer review recommendations.

References to VAGO reports in Parliamentary debate

References to VAGO reports in Parliamentary debate

Managing VAGO

Our staff
Benchmarking our activities

Our costs compare well with other Australian audit offices, particularly given our overall higher proportion of performance audits undertaken:

Workplace and environment
Future focus

We will finalise the realignment of our corporate and business support functions to better support audit operations.

Financial summary 2011–12 and 2010–11

Financial summary

2011–12

2010–11

Change

($’000)

($’000)

(per cent)

Operating revenue

37 120

36 490

1.7

Operating expenses

36 542

35 974

1.6

Total assets

13 445

12 712

5.8

Total liabilities

6 787

6 631

2.4

Surplus/(deficit)

578

516

12.0

Net equity

6 658

6 081

9.5

[Figure 1] Five-year statistics

Five-year statistics

2011–12

2010–11

2009–10

2008–09

2007–08

Reports tabled in Parliament

Report of the Auditor-General on the finances of the state

(number)

1

1

1

1

1

Reports on public sector agencies’ financial statements

(number)

5

6

5

3

3

Performance audit reports

(number)

29

30

26

26

29

External assessment of Parliamentary reports

(per cent)

83

Parliamentarian satisfaction with reports and services

(per cent)

93

98

92

92

83

Audit reports on financial statements

Audit responsibilities (entities at 30 June 2012)

(number)

561

551

557

587

621

Unqualified opinions issued during reporting year

(number)

545

547

553

588

633

Disclaimed opinions issued during reporting year(a)

(number)

14

Qualified opinions issued during reporting year

(number)

4

5

4

4

7

Total opinions issued during reporting year

(number)

563

551

557

592

640

Audit opinions issued within time frame

(per cent)

99

99

100

98

96

Audits externally reviewed meet standards

(per cent)

100

Audit reports on performance statements

Audit reports on local government performance statements

Unqualified opinions issued during reporting year

(number)

77

77

77

78

79

Qualified opinions issued during reporting year

(number)

2

1

1

1

Total opinions issued during reporting year

(number)

79

78

78

79

79

Audit reports on regional water authority performance statements

Unqualified opinions issued during reporting year

(number)

16

15

15

16

15

Qualified opinions issued during reporting year

(number)

1

Total opinions issued during reporting year

(number)

16

15

15

16

16

Audit reports on technical and further education institute performance statements

Unqualified opinions issued during reporting year

(number)

20

20

20

19

19

Qualified opinions issued during reporting year

(number)

Total opinions issued during reporting year

(number)

20

20

20

19

19

Resources

In-house staff

(number)

176

170

173

153

153

Attest audit service providers

(number)

41

40

36

34

36

Average days sick leave per employee

(number)

6.4

7.2

6.2

7.1

5.6

Workers compensation claims

(number)

5

4

4

3

1

Injuries reported

(number)

4

4

4

3

Grievances lodged

(number)

5

2

2

1

Staff training and professional development per employee

(days)

6.1

6.7

9.7

6.4

10.1

Financial management

Expenditure on audit service providers

($million)

10.8

10.2

9.5

9.7

8.6

Revenue from audit fees

($million)

22.5

21.9

20.8

19.3

17.9

Operating surplus/(deficit)

($million)

0.6

0.5

0.8

(1.5)

(1.9)

Assets

($million)

13.4

12.7

11.4

10.9

11.3

Liabilities

($million)

6.8

6.6

5.8

6.1

4.8

(a) During 2010-11 the state received entities as settlement of a 17‑year debenture created as part of the state’s privatisation of electricity assets. There was insufficient evidence to support the transactions and balances of those entities, and therefore we issued disclaimed opinions for 14 entities.

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Auditor-General’s Review

D D R Pearson profile picture

This has been a challenging year for the Victorian public sector. The economic uncertainty of the past few years has led to significant fiscal austerity requiring public sector managers to be even more efficient and economical in delivering services.

When budgets are cut, VAGO’s role as the independent external auditor becomes even more important. As the public sector strives to maintain performance with fewer resources there is greater risk that staff take shortcuts and apply less rigour in their daily activities. Independent scrutiny is therefore crucial for assuring that government is spending public money to maximise outcomes while not compromising accountability.

We appreciate the pressures that our audited agencies are facing, and we will continue to help agencies identify opportunities for the more efficient and effective use of resources.

Persistent issues across the public sector

For three years now, we have looked across the results of each year’s audit program and identified persistent public sector challenges and weakness. These include managing the performance of outsourced services, the quality of oversight, the evidentiary basis for planning and decision‑making, and reporting performance meaningfully.

To some extent, the pattern of these persistent issues is the product of our risk-based approach to selecting performance audit topics and focus areas for attest audits. Yet the shortcomings we continue to encounter are generally foreseeable.

Our analysis shows that focused purposeful management, where programs are managed for delivering intended outcomes rather than relying solely on processes, is the recurring missing element. Agencies can improve both outcomes and accountability—achieving one does not have to compromise the other.

I have shared the findings of our analysis extensively with ministers, departmental secretaries, agencies, the private sector, and through public addresses. These insights are generally received enthusiastically, with many people drawing from them to inform their efforts to improve public management.

It is worrying that in the main, the same issues recur every year. I acknowledge that real change takes time, but the frequency with which the same problems recur is troubling. It suggests that these weaknesses are cultural, pervasive, and deeply entrenched across the public sector.

One of the recurring findings concerns managing performance when services are outsourced or devolved. Over the past 20 or so years, delivery of government services has increasingly been outsourced to the private sector.

While services may be at arm’s length, this does not mean the funding agency is no longer accountable for good, efficient service delivery. Activities can be outsourced—but accountability for outcomes cannot. Yet we continue to see insufficient monitoring and the emergence of gaps in governance. Consequently, our audits often recommend that departments strengthen their oversight.

The other side of this coin is the deficiencies we repeatedly find in performance reporting. An adequate performance reporting framework is crucial for harnessing the benefits of outsourcing, and yet our audits continually conclude that few agencies use relevant and appropriate performance measures that are reported in ways the community can understand. This issue is not restricted to outsourced services, but is pervasive across the public sector.

These themes have been provided to the Better Services Implementation Taskforce, which is looking at options for more efficient and innovative service delivery in the public sector. This recently created taskforce, as well as the Independent Review of State Finances, provide the opportunity to address these persistent themes. I urge government to continue its work in seeking to address these weaknesses.

Addressing the diminishing audit mandate

My ability to adequately audit these issues has been diminished rapidly because my audit mandate is outdated. The current audit legislation does not reflect the past two decades of change in approach to service delivery. Because service delivery increasingly involves private sector providers, amendments to give ‘follow the dollar’ powers are necessary if the traditional comprehensive audit mandate is to be maintained.

2011–12 has been a significant year in relation to the audit mandate at state and national levels, with ‘follow the dollar’ powers implemented in most Australian jurisdictions. This represents a major shift in the external audit and accountability landscape. These powers now exist in varying degrees in the Northern Territory, Queensland, Tasmania, Western Australia, and nationally. We hope that the impetus for change arising from the Public Accounts and Estimates Committee’s 2010 Inquiry into Victoria’s Audit Act 1994 is not lost. We look forward to legislative reform being placed back on the agenda as a high priority.

We are also seeking amendments to the Act to allow us to undertake joint audits and share certain information with interstate and national audit offices. This would allow us to keep pace with the national reform agenda of the Council of Australian Governments and the state’s integrity reforms.

As these arrangements are not available under our current legislation, we have been trialling new types of projects and ways we can collaborate with other integrity bodies, to the extent possible within the current restrictions of the Act. We are taking part in a collaborative performance audit of homelessness with other audit offices, and we have seconded staff to the Victorian Ombudsman in order to facilitate a more joined-up approach.

I am pleased to see that sharing information and undertaking joint investigations is on the government’s agenda in relation to the Independent Broad-based Anti‑corruption Commission. As the Audit Act stands, however, my ability to join a collaborative investigation and share information is limited. Therefore, until the Act is amended, the coherence of the state’s integrity system will remain in doubt.

Continuous improvement at VAGO

As the external audit landscape changes, in-house we continue to focus on improving our practices and products.

This year we engaged more with stakeholders after the tabling of reports to follow through on our commitment to be a catalyst for continuous improvement in the public sector. As much as possible, I and my staff speak to the community about reports.

For example, I spoke at the Public Records Office Victoria’s Record Management Network Meeting about the record-keeping related findings from the performance audit Freedom of Information, and to the Local Government Professionals CEO Forum about the performance audit Performance Reporting by Local Government.

In the case of this latter audit, we have committed to work with the audited agency, the Department of Planning and Community Development, to assist it to address our recommendations as it develops a robust performance reporting framework for local government. We look forward to the work ahead on this and other such projects.

VAGO has come a long way in engaging with stakeholders. Our ‘no surprises’ approach in communicating audit issues to agencies is now well established. Our approach continues to evolve, and in-depth consultation with audited entities now starts earlier in the audit process. This begins with our rolling four-year annual plan, which gives audited agencies fair warning of our intended future focus. As much as possible, we aim to keep the plan stable to allow agencies time to prepare.

Like our audited agencies, we are also subject to scrutiny and in 2013 we will undergo our next triennial performance audit. Since the 2010 audit we have been preparing by improving our processes. The audit is an important accountability measure over the office and provides Parliament and the public with assurance of the efficiency and effectiveness of our activities and performance.

My term as Auditor‑General

As this will be my last annual report as Auditor-General of Victoria, I also want to reflect on my term in this role. Principally I want to thank the staff of VAGO who have supported me over the past six years. Without this support, the significant advances we have made in our strategic and annual planning approaches, engagement with our stakeholders and audit clients, and quality of our reporting would not have been possible.

It has been my privilege to implement many initiatives suggested by staff. Perhaps most notably was the suggestion to develop the Annual Plan into a four‑year rolling plan. The Annual Plan has been aligned with the stated goals of the elected government to provide Parliament with greater assurance on the relevance, significance, risk and materiality of our planned audit coverage. It has been especially gratifying to receive positive feedback from Parliamentarians and others in relation to the approach and the quality of our reports.

Our approach to reporting to Parliament with more concise, focused and reader-friendly performance audit reports, and the adoption of a sector-based approach to reporting on our annual attest audits of entity annual financial reports has required significant effort.

Similarly, our reporting on the financial sustainability of the Public Hospitals, Local Government and Water sectors has further leveraged the significant investment in the adoption of accrual accounting.

I also acknowledge the support of fellow integrity officials and the good relationships with secretaries, chief executive officers, chairs of audit committees, chief financial officers, program managers and, importantly, audit liaison staff of audited entities for their cooperation and commitment to constructive relationships.

The contribution of audit service providers and subject matter specialist contractors has also been an important component in achieving the delivery of the audit program. I thank them for their valuable assistance.

I also recognise the support provided by the Public Accounts and Estimates Committees of the 55th, 56th, and 57th Parliaments.

It has been an honour to serve as Victoria’s 25th Auditor-General and to complete a 42-year public service career, including the past 21 years as an Auditor-General. The time is now right for me to move on to the next phase of life and it has been a privilege to be able to contribute to improving the accountability and performance of the public sector.

Signature of D D R Pearson

Des Pearson
Auditor-General
24 August 2012

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Reports and advice

The Victorian Government’s Budget process requires departments and agencies to report against outputs, including information on performance measures (quantity, quality, timeliness and cost).

VAGO’s output group 1 relates to the Parliamentary reports and services we provide to Parliament, departments and agencies.

Introduction

Our purpose is to provide independent and objective assurance to Parliament on the accountability and performance of the state and local government sectors. We provide this assurance through our attest and performance audits, and report our results publicly.

In addition to our tabled products, we respond directly to inquiries from Members of Parliament and the public.

This chapter covers our performance in delivering reports and advice. Figure 2 summarises our performance against our targets for our Parliamentary reports and services.

[Figure 2] Performance against output group 1 targets

Performance measures

Unit of measure

Target 2012–13

Actual 2011–12

Target 2011–12

Actual 2010–11

Quantity

Auditor-General’s reports

(number)

36

37(a)

36

39

Quality

Average score of audit reports by external assessors

(per cent)

80

83

80

n/a

Overall level of external satisfaction with audit reports and services—Parliamentarians

(per cent)

85

93

85

98

Overall level of external satisfaction with audits—audit clients

(score)(b)

n/a(c)

71(d)

75

67

Timeliness

Reports completed on time

(per cent)

90

87(e)

90

90

Inquiries from Members of Parliament and the public responded to within 28 days

(per cent)

95

99

95

99

Cost

Total output cost

($mil)

14.9

13.7

14.1

14.7

(a) The higher than target result is due to carry forward of audits from previous financial years.

(b) The score is a rating out of 100, and represents the average rating across all respondents. The score is the average score transformed to a 100 point scale.

(c) This will not be reported in 2012–13. Two new performance indicators have been introduced which more directly reflect the quality of the audit report.

(d) The lower than target score is consistent with previous years’ results.

(e) The lower than expected result is due in part to carry forward of audits from previous financial years.

Quantity

In relation to reporting to Parliament, each year we produce:

Figure 3 shows our performance for each category against our 2011–12 targets.

[Figure 3] Performance against 2011–12 targets

Product type

Target 2012–13

Actual 2011–12

Target 2011–12

Performance audit reports

28

29

28

Reports on results of attest audits

5

5

5

Report on the annual financial report of the state of Victoria

1

1

1

Annual plan

1

1

1

Annual report

1

1

1

Total

36

37

36

The reports we tabled in Parliament during 2011–12 are listed in Figure 4. Consistent with the approach used in our Annual Plan 2011–12, our audit reports are presented against each of the government’s five goals for a stronger, fairer and safer Victoria.

[Figure 4] Reports tabled in Parliament during 2011–12

A growing economy

Performance audit reports

Biotechnology in Victoria: the Public Sector’s Investment

Business Planning for Major Capital Works and Recurrent Services in Local Government

Management of Road Bridges

Melbourne Markets Redevelopment

Supporting Changes in Farming Practices: Sustainable Irrigation

Services that work

Performance audit reports

Access to Public Housing

Casual Relief Teacher Arrangements

Compliance with Building Permits

Individualised Funding for Disability Services

Maternity Services: Capacity

Public Transport Performance

Science and Maths Participation Rates and Initiatives

Strong families and vibrant communities

Performance audit reports

Developing Cycling as a Safe and Appealing Mode of Transport

Effectiveness of Justice Strategies in Preventing and Reducing Alcohol-Related Harm

Secure water and a healthy environment

Performance audit reports

Agricultural Food Safety

Managing Contaminated Sites

Government you can trust

Performance audit reports

Fraud Prevention Strategies in Local Government

Freedom of Information

Government Advertising and Communications

Management of Trust Funds in the Justice Portfolio

Obsolescence of Frontline ICT: Police and Schools

Payments to Visiting Medical Officers by Rural and Regional Hospitals

Performance Reporting by Local Government

Personal Expense Reimbursement, Travel Expenses and Corporate Credit Cards

Procurement Practices in the Health Sector

Road Safety Camera Program

State Trustees Limited: Management of represented persons

TAFE Governance

Victorian Institute of Teaching

Reports on attest audit results

Local Government: Results of the 2010–11 Audits

Portfolio Departments and Associated Entities: Results of the 2010–11 Audits

Public Hospitals: Results of the 2010–11 Audits

Tertiary Education and Other Entities: Results of the 2011 Audits

Water Entities: Results of the 2010–11 Audits

Report on the examination of the state’s finances

Auditor-General’s Report on the Annual Financial Report of the State of Victoria, 2010–11

Performance audit reports

A performance audit report examines a program or area of government, to determine whether government objectives have been achieved.

We use a topic selection framework to select performance audit topics. This is discussed further on page 42 and in VAGO’s Annual Plan 2012–13.

We tabled 29 performance audit reports in 2011–12. These included:

The five audits listed in the 2011–12 annual plan that were not tabled in 2011–12 were:

All of VAGO’s reports, annual plans and annual reports are published on our website: www.audit.vic.gov.au.

Reports on attest audit results

Our attest audit reports inform Parliament about the results of our audits of financial statements including matters of significance identified during the audits.

We report by sector, discussing financial results, financial sustainability of entities, reflections on the quality of agency reporting, and our assessment of the adequacy of internal controls. Each sector report includes focus areas that look at particular issues in more detail and provide a high-level review of the sector’s performance in the area.

Five sector-based reports were tabled during the year as planned.

Attest audit reports

Our reports on the results of attest audits cover the following sectors or entities:

Local government

Portfolio departments and associated entities

Public hospitals

Tertiary education and other entities

Water entities

Report on the annual financial report of the state of Victoria

Under section 9A of the Audit Act 1994, the Auditor-General is required to express an audit opinion on the financial report of the state. Under section 16A the Auditor-General is also required to make a report to Parliament on this financial report. The report provides information on the audit result, the state’s financial results, and significant projects and developments.

In the latter section we comment on projects and developments where Parliament or the public would have a reasonable expectation of timely, independent disclosure of the related financial implications, which are not otherwise required to be reported by accounting standards.

The Auditor-General’s Report on the Annual Financial Report of the State of Victoria, 2010–11, was tabled on 9 November 2011.

Annual plan

The Audit Act 1994 requires the Auditor-General to develop an annual plan that sets out the work program for the year and present it to Parliament, following consultation with the Public Accounts and Estimates Committee (PAEC).

This is one of our most important accountability mechanisms. It provides Parliament, the public sector and the community with the opportunity to assess our goals, understand our audit priorities and scrutinise our program. Victoria was one of the first jurisdictions to have such a plan.

In developing our annual plan, in addition to consulting with PAEC, we consult departments (including their audit committees), stakeholders such

as peak bodies, industry bodies and subject matter experts. We conduct environmental scanning and choose areas of focus and audit topics by assessing the risk and materiality of an aspect of government in terms of financial significance and community impact.

For six years, our annual plan has provided our work plan on a four‑year rolling basis. This exceeds the legislative requirement for a one-year plan.

The Annual Plan 2011–12 was tabled on 24 May 2011.

Annual Plan 2012–13

While this annual report acquits against our Annual Plan 2011–12, we have already prepared our annual plan for 2012–13. It was tabled in Parliament on 23 May 2012 and is available at www.audit.vic.gov.au.

Annual report

The annual report is another of our outputs. The Annual Report 2010–11 was tabled in Parliament on 30 August 2011.

Quality

The quality of our reports is assessed in a number of ways. In 2011–12, three measures were used to report externally on the quality of our reports:

In 2011–12, we introduced a new quality measure for our reports, ‘average score of audit reports by external assessors’. This followed the introduction in 2010–11 of the quality performance measure ‘overall level of external satisfaction with audit reports and services—Parliamentarians’.

These two measures were introduced to replace the measure ‘overall level of external satisfaction with audits—audit clients’.

As an independent officer of Parliament, the Auditor-General is statutorily required to provide Parliament with opinions and reports according to law and ‘without fear, favour or affection’. These new measures are a more appropriate measure of our report quality and services to Parliament, based on the satisfaction of external parties.

From 2012–13 we will no longer report on audited agencies’ overall level of satisfaction, but will continue to collect and use this information for our internal business process improvement. However, consideration of this dimension has to be secondary to our primary role and obligation as Parliament’s independent auditor, operating ‘without fear, favour or affection’.

Independent assessments of report quality

Each year, approximately one in three of our performance audit reports are reviewed by independent assessors, who examine their quality. The reviewers read the report alone, and as such provide an indication of quality based solely on the report itself.

The Australasian Council of Auditors‑General (ACAG) has a panel of three independent assessors to conduct these reviews across participating jurisdictions. The current assessors are an ex‑Parliamentarian and Chair of a Public Accounts Committee, a former Auditor-General, and a member of the Board of the Australasian Reporting Awards, recently retired from a senior public service position.

In 2011–12, the following 10 performance audit reports were assessed:

The reports are assessed against criteria that have been agreed across the Australian audit offices that participate. In 2011–12, we exceeded our target with an average score of 83 per cent (target 80 per cent).

In 2011–12, we conducted a pilot of assessments of our attest audit reports. The following three attest audit reports were selected for assessment:

The attest audit reports had an average score of 81 per cent. As this was a pilot, the results were not included in the VAGO performance score for the year.

Figure 5 shows the overall average ACAG score for VAGO’s performance and attest audit reports.

[Figure 5] Average ACAG score for VAGO audit reports

Score (per cent)

ACAG assessments

2011–12

2010–11

2009–10

2008–09

2007–08

Performance audit reports

83

80

81

79

76

Attest audit reports

81

n/a

n/a

n/a

n/a

Note: No scores are provided for attest audit reports prior to 2011–12 as they were not assessed.

Average score of audit reports by external assessors

The score for quality is based on reviews of performance audits only. External assessment of attest audit reports was conducted in 2011–12 for the first time as a pilot only.

Figure 6 shows the average scores against each criterion for performance audit reports and for attest audit reports.

[Figure 6] Average scores for performance audit reports out of a possible score of five, against each criterion

Score out of five (average)

ACAG criterion

2011–12

2010–11

Performance audit reports

Scope and potential for significant impact

4.3

4.3

Focus on effectiveness, efficiency and economy

4.0

3.7

Persuasiveness of conclusions

4.5

4.2

Communication (online report)

3.9

3.7

Communication (printed report)

3.9

4.0

Usefulness to the customer

4.0

4.2

Attest audit reports

Scope and potential for significant impact

3.8

n/a

Focus on key issues

3.9

n/a

Persuasiveness of conclusions

4.4

n/a

Communication (online report)

4.1

n/a

Communication (printed report)

4.1

n/a

Usefulness to the customer

4.1

n/a

Note: No scores are provided for attest audit reports prior to 2011–12 as they were not assessed.

In addition to scoring each report submitted, the assessors provided qualitative feedback on the reports. The following quotes are extracts from this feedback.

Road Safety Camera Program

‘The conclusions are well argued and very concise. The report is balanced and provides the community with direct answers to its questions about speed cameras.’

TAFE Governance

‘Suggested improvements include greater use of interstate and international findings and more use of charts, diagrams, graphs and photographs.’

Auditor-General’s Report on the Annual Financial Report of the State of Victoria, 2010–11

‘The in-depth analysis of a number of major projects is to be commended. Without this audit these matters would not have been fully understood by MPs and others.’

Feedback from Parliamentarians

We request feedback from Parliamentarians annually through a comprehensive and confidential survey. This feedback is an important part of our efforts to improve our services and publicly report on our performance. This feedback is collected on VAGO’s behalf by an accredited research company, to better assure the validity of the results.

Feedback from Parliamentarians in 2011–12 has been encouraging. Ninety-three per cent of respondents indicated that they were satisfied or very satisfied overall with our reports and services. This is above the target of 85 per cent.

These results must, however, be interpreted with caution, because the response rate was relatively low. Forty-four Members of Parliament responded – similar to last year when 45 responded. This represents 35 per cent of all members of Parliament.

Highlights from Parliamentarian feedback

  • 84 per cent of Parliamentarians who responded agreed that the Auditor‑General’s performance audit reports addressed their key areas of interest to a high or very high extent.
  • 87 per cent agreed that performance audit reports clearly identified public sector agencies’ performance.
  • 96 per cent agreed that performance audit reports clearly identified the significant issues and their implications.
  • 88 per cent agreed that attest audit reports clearly identified the significant issues and their implications.
  • 79 per cent agreed that attest audit reports assisted them to monitor the accountability and financial performance of the Victorian public sector.

[Figure 7] Parliamentarians’ satisfaction levels with the Auditor‑General’s reports and services

Parliamentarians’ satisfaction levels with the Auditor-General’s reports and services

Notes: n = number of responses.

Target introduced for 2011–12.

Our 2011–12 results were benchmarked against results from three other Australian audit offices. VAGO ranked at the high end of the range for reports providing valuable information about public sector performance, for high quality reports and services, and for performance audits addressing Parliamentarians’ key areas of interest.

One area where we received a low rating was on the per centage of Parliamentarians who had referred to one of our reports. This may have been affected by the number of new members in the new Parliament.

Survey response rate

The response rate from Parliamentarians is low, and this is consistent with experience in other jurisdictions. The average response rate across participating audit agencies over 10 years is 40 per cent. We continue to look for ways to increase the response rate.

Agency feedback on performance audits

After every performance audit, we request feedback from audited agencies on the:

Feedback from audited agencies needs to be considered carefully, as it is not necessarily objective. It is primarily a measure of audited agencies’ satisfaction with the process, rather than an overall quality measure for an audit. As such, this measure will not be externally reported in future years, but we will continue to use it to identify areas for internal improvement.

[Figure 8] Audited agencies’ satisfaction with performance audits

Audited agencies’ satisfaction with performance audits

As with the surveys of Parliamentarians, to better assure the validity of the results, an accredited research company is commissioned to conduct the survey of audited agencies and analyse the results.

An overall index is generated based on average ratings across all three areas and expressed as a score out of 100. In 2011–12, the overall satisfaction index was 71, exceeding results in 2009–10 (69) and 2010–11 (67). Results for all questions except one showed an improvement in satisfaction, indicating that the actions that have been put in place to address prior years’ survey results have had an impact.

The result was nonetheless below the target of 75. This may be due to the survey being more a measure of agency satisfaction with the process, as discussed above, rather than a robust quality measure.

New performance measures for quality

We have introduced two new quality performance measures, to more objectively measure the quality of our audit reports. We will continue to assess agency satisfaction with our audits for our internal business improvement. However, it will no longer be used as an external measure and has to be regarded as a secondary consideration in our primary role of providing independent audit opinions and reports.

Timeliness

To measure the timeliness of our reports and services, we report two measures:

Reports completed on time

Each performance audit and sector‑based attest audit report is managed as a project with internal time lines that are used to set the Parliamentary tabling program. We aim to table 90 per cent of our reports within one month of the planned program, despite the inherent challenge of reliably predicting how complex and difficult an audit might be.

Of the 37 Parliamentary reports tabled during 2011–12, 32 (87 per cent) were tabled within one month of the planned program. Of the five reports that were late, two were carried over from previous financial years.

The performance reports that did not meet the target times in 2011–12 were:

The average time to complete performance audits in 2011–12 was 10 months, which is similar to last year and which compares well with the 2010–11 (latest available data) ACAG averages for Australian audit offices, which range from 6 to 12 months.

[Figure 9] Timeliness of reports tabled in Parliament

Timeliness of reports tabled in Parliament

Timeliness of responses to inquiries

Each year, many Parliamentarians and members of the public contact us about issues that concern them. In many cases, these inquiries seek to trigger or contribute to audit activity under VAGO’s mandate. While we treat these inquiries as requests for audit attention, we do not necessarily investigate specific cases as our audits focus on systemic issues. Inquiries can, however, help refine the focus of our audits and are taken into consideration when developing our Annual Plan.

The timeliness of our response to unsolicited inquiries measures our responsiveness in one of our most significant direct interactions with Members of Parliament and the general public.

In 2011–12, we responded to 99 per cent of inquiries within 28 days. This was in line with last year’s result (99 per cent) and exceeded the target of 95 per cent.

Unsolicited inquiry correspondence increased by 45 per cent and amounted to 139 letters, emails or phone calls:

Recurring topics for this year included the residential building industry, road safety cameras, freedom of information processes and the smart meter rollout in Victoria.

How to engage with VAGO

We value our engagement with the public and the best way to contact us is in writing. You can write to us at Level 24, 35 Collins St, Melbourne, 3000. Alternatively, email us at comments@audit.vic.gov.au.

Cost

In 2011–12 the cost of delivering our Parliamentary reports and services was $13.7 million, which was below the target of $14.1 million. This underspend was largely due to lower expenditure on contractors and employee-related expenses.

The cost of our performance audit reports ranged from $190 000 to $1 025 000. The average cost per performance audit report was $429 827 which is higher than last year’s average of $354 000 and slightly above our internal benchmark target of $415 000. The higher than expected cost was due to one audit which was highly complex and of long duration, and consequently high cost. This audit was carried forward from a previous year.

The cost of our attest audit reports ranged from $155 000 to $205 000. The average cost per attest audit report was $185 000 compared to $207 000 last year. The cost is lower because in 2010–11 we produced an additional report of interim results prior to the proroguing of Parliament for the November 2010 election, as the first opportunity to table reports on the final results of audits was otherwise not until February 2011. This report was an omnibus, summarising the interim results of five sectors, and was more expensive to produce.

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Audit opinions

The Victorian Government’s Budget process requires departments and agencies to report against outputs, including information on performance measures (quantity, quality, timeliness and cost).

VAGO’s output group 2 relates to our opinions on the annual financial statements and non-financial performance statements prepared by departments and agencies.

Introduction

Our primary purpose is to provide assurance to Parliament on the accountability and performance of the Victorian state and local government sectors. The foundation for doing this is our annual attest audits of financial and non-financial performance statements. Our opinions assure Parliament that these statements are presented fairly.

Our attest audit coverage also considers whether there has been wastage of public resources, or any lack of probity or financial prudence in the management or application of public resources.

This chapter covers our performance in delivering these audit opinions. Figure 10 shows how we performed against our targets for audit opinions on financial and non‑financial performance statements.

[Figure 10] Performance against output group 2 targets

Performance measures

Target 2012–13

Actual 2011–12

Target 2011–12

Actual 2010–11

Quantity

Audit opinions issued on the financial statements of agencies

(number)

563

563(a)

567

551

Audit opinions issued on non‑financial performance indicators

(number)

114

115(b)

113

113

Quality

External/peer reviews finding no material departures from professional and regulatory standards(c)

(per cent)

100

100

100

n/a

Overall level of external satisfaction with audits – audit clients(d)

(score)

n/a

78

75

77

Timeliness

Audit opinions issued within statutory deadlines

(per cent)

98

99

98

99

Management letters issued to agencies within established time frames(e)

(per cent)

90

96

90

88

Total output cost

($mil)

22.7

22.8(f )

20.8

21.2

(a) This measure is below target because some entities ceased operation before the audit.

(b) The higher than expected outcome reflects additional entities producing non-financial performance statements for audit when not required by legislation.

(c) This is a new measure that more directly reflects the quality of audits. It was not measured before 2011–12.

(d) This will not be reported in 2012–13 as it does not provide an objective assessment of audit quality. A new performance measure has been introduced that more directly reflects the quality of audit work.

(e) In the 2011–12 Budget Papers, this performance measure was named ‘Management letters and reports to Ministers issued within established time frames’. It measures the same activity as before but the name has been amended in the 2012–13 Budget Papers and this report to increase clarity.

(f) The cost is higher than the target due to an increase in actual billable hours, which better reflects the resources required to deliver the output. Costs are fully recovered through audit fees.

Quantity

The assurance audit outputs we produce each year are:

Figure 11 lists the number of entities, by type, that the Auditor‑General is responsible for auditing.

[Figure 11] Auditor-General’s attest audit responsibilities

Type of entity

2011–12

2010–11

Parliamentary bodies

Parliament

1

1

State accounts

Annual financial report

1

1

Estimated financial statement(a)

1

1

State entities

Departments and other independent budget sector entities

23

23

Companies, trusts and joint ventures(b)

178

161

Public bodies

94

94

Public cemeteries(c)

6

15

Public hospitals and ambulance service

88

85

Regional waste management groups

13

15

Superannuation funds

2

2

Universities and other educational institutions

22

22

Water authorities

27

27

Local government entities

Municipal councils

79

79

Regional library corporations

12

12

Companies, trusts and joint ventures

14

13

Total number of entities

561

551

(a) The estimated financial statement receives a review opinion, not an audit opinion.

(b) This increase is primarily due to the inclusion of new entities that reverted to the State Electricity Commission of Victoria under agreements during the year.

(c) The decrease is due to the consolidation of a number of public cemeteries.

More opinions than entities?

We had responsibility for auditing 561 entities’ financial statements in 2011–12. However, this year we issued 563 opinions because we issued two opinions for two of those entities.

Audit opinions issued on entities’ financial statements

During 2011–12, VAGO issued 563 opinions on entities’ financial statements, compared with the target of 567. This included the audit opinion on the annual financial report of the state, and the opinion on the review of the estimated financial statements.

Independent audit opinions add credibility to financial statements by providing reasonable assurance that the information reported is reliable. An ‘unqualified’ audit opinion means that the financial statements fairly present the transactions and balances in accordance with the relevant legislative reporting framework.

A ‘qualified’ audit opinion is issued when a material misstatement exists within the financial statements, while not being pervasive to the financial report.

The financial statements of four entities (five in 2010–11), which represent less than 1 per cent of all audited entities, were qualified in 2011–12 for the following reasons:

Sometimes it is necessary to issue a ‘disclaimed’ opinion when we are unable to obtain sufficient appropriate audit evidence on which to base our opinion, and we conclude that the possible effects on the financial report of undetected misstatements, if any, could be both material and pervasive.

In 2010–11, the State Electricity Commission of Victoria received entities as settlement of a 17-year debenture created as part of the state’s privatisation of electricity assets. However, there was insufficient evidence to support the transactions and balances of those entities, and therefore we issued disclaimed opinions on the financial statements of 14 entities.

Audit opinion on the annual financial report of the State of Victoria

The state’s accountability framework requires the government to prepare and present consolidated whole‑of‑government financial statements to Parliament annually. The statements consolidate all the public sector entities the government controls.

On 10 October 2011 the Auditor‑General provided a clear audit opinion on the state’s annual financial report for 2010–11, which the Department of Treasury and Finance tabled in Parliament on 13 October 2011.

Review of the estimated financial statements of the State of Victoria

The Budget process is another aspect of state-level finances that the Auditor-General examines. Under the Audit Act 1994, the Auditor-General is required to report to Parliament on whether the:

On 27 April 2012 we completed our review of EFS for the financial year ending 30 June 2013 and the following three years. The Budget Papers, presented to Parliament on 1 May 2012, included our independent report.

Audit opinions issued on entities’ non-financial performance statements

As well as preparing financial statements some entities are required to prepare non‑financial performance statements that must also be audited.

These statements report against the performance measures and targets identified in:

VAGO issues an opinion on whether a non-financial performance statement is presented fairly.

In 2011–12, we issued 115 opinions on non‑financial performance statements, two more than planned, comprising:

The additional opinions issued in 2011–12 were for water and training entities that, although not required to produce non-financial performance statements for audit, commendably chose to do so.

Two entities (one in 2010–11) received qualified audit opinions on their performance statements in 2011–12. One was for a failure to include key performance indicators and targets, and the other for failing to report against them.

There are currently no legislative requirements for annual assurance audits of performance information reported by government departments.

Warrants for expenditure of public funds

As well as our audit opinions, we are responsible for certifying warrants for expenditure of public funds.

Under the Constitution Act 1975 and the Financial Management Act 1994, any money drawn from the Consolidated Fund of the Public Account must be authorised through warrants that the Auditor-General examines, certifying each warrant when satisfied that the funds are legally available.

While not included in the output group, information on these warrants is included below for transparency.

During 2011–12, the Auditor‑General certified 33 warrants, authorising Consolidated Fund expenditure of up to $48.8 billion (36 warrants of up to $41.9 billion in 2010–11).

Quality

Our current performance measures for the quality of our attest audit services and reports are:

As an independent officer of Parliament, the Auditor-General is statutorily required to provide Parliament with opinions and reports according to law and without fear, favour or affection. As such, in 2011–12, we introduced a new performance measure to measure the quality of our attest audit activities: ‘external/peer reviews finding no material departures from professional and regulatory standards’. This measure replaces the measure of: ‘overall level of external satisfaction with audits – audit clients’, as it is a more appropriate measure of quality for the independent auditor. From 2012–13, we will no longer report on the ‘overall level of external satisfaction with audits – audit clients’. We will, however, continue to assess satisfaction of audited agencies for our internal business improvement. However, this must remain a secondary consideration to our overriding obligation to form independent opinions and to report ‘without fear, favour or affection’.

External/peer reviews finding no material departures from professional and regulatory standards

The target for this new measure is 100 per cent for 2011–12.

In 2011–12, the external/peer reviews were conducted as part of a whole-of-office review which was carried out in May 2012. While the final peer review report has not been received, the provisional reports on the attest audits reviewed indicated that there were no material departures and that the target will be met.

Agency feedback on attest audit services and reports

Each year we seek the views of agencies on the:

As with our agency surveys relating to performance audits, feedback from audited agencies needs to be interpreted with caution.

Feedback is collected through surveys and interviews that are conducted by an accredited research company. An overall index is generated based on average ratings across all three areas, and expressed as a score out of 100. The overall satisfaction index for audited agencies in 2011–12 was 78, which exceeded both the 2011–12 target of 75 and the 2010–11 result of 77. This reflects our recent efforts to:

This year the majority of ratings for audit process and audit value showed an improvement compared to last year’s results, while results for audit reporting were stable.

Our 2011–12 results were benchmarked against results from the three other participating Australian audit offices. In 2011 VAGO ranked at the high end of the range on audit process and audit reporting, and in the middle of the range on audit value compared to our peers.

VAGO ranked particularly well in audited agencies’ perception of:

We ranked lowest in terms of whether we had adequately explained the basis for audit fees. However, our score was an improvement on recent years.

[Figure 12] Audited agencies’ overall satisfaction with attest audits

Audited agencies’ overall satisfaction with attest audits

Timeliness

There are two timeliness measures for our attest audits:

Audit opinions issued within statutory deadlines

The Financial Management Act 1994 requires departments and other public sector entities to submit their annual financial statements to the Auditor-General within eight weeks of the financial year end. According to the Audit Act 1994, the Auditor-General must then express an opinion on the financial statements within four weeks of their receipt.

During 2011–12 we issued 99 per cent (99 per cent in 2010–11) of our audit opinions within the statutory deadline, exceeding our target of 98 per cent, as shown in Figure 13. This continues our trend of high performance against this target.

[Figure 13] Audit opinions issued within the statutory deadline

Audit opinions issued within the statutory deadline
Management letters issued within established time frames

VAGO communicates significant audit or accounting issues in management letters during, and at the completion of, an audit.

In 2011–12, we issued 96 per cent of management letters within our established time frames. This is a strong improvement on last year (88 per cent) and higher than our target of 90 per cent. This reflects our focus on improving this result.

Cost

[Figure 14] Cost of audit opinions on financial statements

Cost of audit opinions on financial statements

The total cost of delivering our audit opinions increased from $21.2 million last year to $22.8 million this year. This is 9.6 per cent above target ($20.8 million). The higher than expected cost is mainly due to general price increases, higher staff and contractor costs and bringing forward work. Costs were fully recovered through audit fees.

At $40 497, the average cost per audit increased slightly in 2011–12 compared with 2010–11, in line with CPI. The cost of our audits ranged from $580 to $426 000.

[Figure 15] Trends in average cost of audit opinions

Target 2012–13

Actual 2011–12

Actual 2010–11

Actual 2009–10

Actual 2008–09

Actual 2007–08

Attest audit opinions

(number)

563

563

551

557

592

640

Cost

($mil)

22.7

22.8

21.2

20.4

19.8

19.2

Average cost per audit opinion(a)

($’000)

40

40

39

37

33

30

(a) The average cost calculation does not separate the cost of non-attest audit opinions, where relevant.

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Impact of reports and services

In this chapter we discuss the impact of VAGO’s reports and services and how we measure this impact.

Introduction

We undertake a range of activities to increase the impact of our reports and services, and measure the degree of this impact.

Developing quantified outcomes‑based performance measures for VAGO that meaningfully reflect the office’s activities is challenging. We cannot direct agencies to respond to our findings, or accept and implement our recommendations, as legislation gives the Auditor-General no executive authority. Our only recourse is to expose issues by reporting them to Parliament, thereby placing them in the public domain.

Despite this, VAGO has identified a suite of measures, both quantitative and qualitative, to provide as complete a picture as possible of the impact of the office on the public sector and the results achieved in the community through our products and services.

In this chapter we look at our impact on:

Impact on Parliament

Our primary stakeholders are Members of Parliament, and a key measure of the impact of our work is Parliamentarians’ use of, and response to, our reports.

We use the following measures to examine the extent to which Parliamentarians engage with and use our reports:

[Figure 16] References to VAGO reports in Parliamentary debate

References to VAGO reports in Parliamentary debate

Parliamentary debate

Parliamentarians increasingly refer to our reports to support their debates in Parliament. This trend has continued over the past few years. Hansard transcripts show a significant increase in references to our audit reports in Parliamentary debate in 2011–12, reflecting members’ continuing high level of interest in and use of our work. This year members made 262 references to our audit reports—an increase of 52 per cent compared to last year’s 172 references.

Members used our reports to support their discussion of:

Excerpts from debate

TAFE Governance (October 2011)

‘The Auditor-General made five recommendations regarding this matter, and the minister has indicated that they will be implemented.’ (Inga Peulich, MLC, Liberal)

Procurement Practices in the Health Sector (October 2011)

‘If the minister is interested in making productivity gains across the board… he should act on the Auditor‑General’s recommendations.’ (Colleen Hartland, MLC, Greens)

In the 17 weeks that Parliament sat, there was an average of 15.4 references to our audits per week. This is an increase of 25 per cent on last year’s average of 12.3 for the 14 sitting weeks of 2010–11.

Parliamentary inquiries

Our audit reports are also used to inform and support the activities of Parliamentary committees. From time to time, a report may be used intensively to drive particular inquiries by these committees.

In 2011–12, the Public Accounts and Estimates Committee (PAEC) conducted a review into the state’s financial and performance outcomes for 2009–10 and 2010–11. PAEC’s final report drew substantially on the Auditor‑General’s Report on the Annual Financial Report of the State of Victoria, 2010–11 (November 2011), to support its own findings and recommendations. PAEC’s report also referred to VAGO’s annual plans and the performance audits Access to Ambulance Services (October 2010) and Melbourne Markets Redevelopment (March 2012).

The Legislative Council’s Economy and Infrastructure References Committee also used VAGO’s work to support its activities. In its report on its Inquiry into Primary Health and Aged Care, finalised in 2011‑12, the committee referred to the performance audit Performance Reporting by Departments. This report has had significant ongoing impact on the public sector since its tabling in May 2010.

VAGO was also invited to provide evidence based on our audit findings to the following inquiries by Parliamentary committees:

These inquiries are ongoing and reports have yet to be tabled.

Parliamentary briefings and engagement

In 2011–12 we continued our program of briefings and engagement activities with Parliamentarians and provided assistance in identifying audit findings relevant to them.

We conducted 17 briefing sessions in Parliament House during tabling weeks, detailing the key findings of VAGO reports tabled earlier that day. These sessions were open to any Member of Parliament to attend. Similar to last year, 31 members came to one or more sessions (30 in 2010–11) while average attendance rose slightly to nine a session (seven in 2010–11).

In its Report on the 2009–10 and 2010–11 Financial and Performance Outcomes (April 2012), PAEC recommended that VAGO obtain feedback on how briefing sessions could be made more appealing or convenient to Members of Parliament in order to increase the attendance rate in the future. We will consider this recommendation in 2012–13.

Ministers have a particular interest in VAGO reports with findings that are relevant to their portfolios. As part of our audit process, we offer ministers a briefing about the audit on the eve of tabling day. Across 2011–12, 18 ministers or their offices accepted briefings compared to 31 in 2010–11. Some received briefings on more than one audit, with 36 briefings conducted in total.

While this is a decrease compared to last year, Parliamentarians are using our reports more and more, as discussed previously. This suggests that our activities in previous years—especially in the first year of the 57th Parliament—have been effective, and that Parliamentarians are accessing our reports independently.

‘The one thing that impresses me is the utter disregard by VAGO to curry political favour or pander to politicians who are currently in office, no matter what their political ideology. VAGO’s Parliamentary reports are generally of an excellent standard and are arguably the truest financial and performance accounts of the state of play in the Victorian public sector.’

(Nazih Elasmar, MLC, ALP)

Feedback from Parliamentarians

We request feedback from Parliamentarians annually through a confidential survey. This feedback is important to inform our efforts to improve our services and publicly report on our performance. It is also how we collect information to report on one of our performance measures—Parliamentarians’ satisfaction with audit reports and services.

Feedback from Parliamentarians in 2011–12 has been encouraging. While our results have dropped, they are still strongly positive, with 93 per cent of Parliamentarians who responded agreeing that they were satisfied or very satisfied with our reports and services, compared to 98 per cent of respondents in 2010–11. This result is also consistent with trends in the course of each Parliament and remains above our target of 85 per cent.

Impact on audited agencies

It is in the agencies that are the subject of our audits where our findings and recommendations can have clear impact.

We used the following measures to assess the impact of our work on these agencies:

Agency implementation of recommendations

When VAGO identifies significant deficiencies or issues during an audit we make recommendations to the audited agencies.

For an audit report to have real impact the audit recommendations must first be accepted by the agency. Without their acceptance, opportunities to increase accountability and improve public sector performance are limited. VAGO engages extensively with agencies on the proposed recommendations and seeks to make the recommendations action‑oriented, practical and meaningful.

The Audit Act 1994 gives audited agencies the opportunity to respond to our findings and recommendations, and for their response to be included in the tabled report.

Across our performance audit reports in 2011–12, VAGO made 182 recommendations based on our findings. Of these, 180 (99 per cent) were accepted.

Extracts from agency responses provide examples of the usefulness of recommendations and the commitment of agencies to implement the necessary changes identified by our audits.

Extracts from responses to VAGO reports

Developing Cycling as a Safe and Appealing Mode of Transport (August 2011)

‘The report’s recommendations provide positive and constructive guidance for the Department and VicRoads to continue to develop cycling as a safe and appealing mode of transport for Victorians, and to this end we accept all six of your recommendations.’ Response provided by the Secretary, Department of Transport, and the Chief Executive, VicRoads

Procurement Practices in the Health Sector (October 2011)

‘The report and its recommendations will be used to guide our thinking as we develop a new five year (2012–17) strategic plan.’ Response provided by the Board Chair, Health Purchasing Victoria

Performance Reporting by Local Government (April 2012)

‘The timing of the performance audit report will assist in the preparation of the 2013–17 Council Plan which will be developed after this year’s Local Government elections. The report will provide a valuable resource to assist in the process.’ Response provided by the Chief Executive Officer, Colac Otway Shire

However, real, sustainable change takes time. Although analysing responses to recommendations tabled in the last year is a useful measure, we also seek to understand the lasting impact of audits on public sector accountability and performance. It is useful, therefore, to see how agencies are progressing on recommendations from our older audits.

The Government Response to the Auditor-General’s Report issued in 2010–11 (21 June 2012) provided insight on agency progress in response to older audits. It showed that the majority of recommendations made by the Auditor-General are being acted on by the agencies concerned. Of the 324 responses from agencies to recommendations, 295 were supported (91 per cent) and a further 20 were being reviewed by the agencies (6 per cent).

Fewer than 2 per cent of recommendations were not supported. The report also contained advice from audited agencies on their progress in addressing these recommendations.

Extracts from responses to older VAGO reports

Portfolio Departments: Interim Results of the 2009–10 Audits (July 2010)

‘The Department has an established a system for managing conflicts of interest in the form of clear directions for all employees to follow. The Department maintains up-to-date conflict of interest disclosure records as well as manages an Employee Declaration of Private interests register.’ Response provided by the Department of Sustainability and Environment

Managing Drug and Alcohol Prevention and Treatment Services (March 2011)

‘New output performance measures for 2011–12 have been introduced and outdated measures have been removed.’ Response provided by the Department of Health

Effectiveness of Victims of Crime Programs (February 2011)

‘Community Operations/Victims Support Agency has developed a comprehensive Victims Assistance and Counselling Program Practice Manual that addresses the requirement to provide more guidance to Victims Assistance and Counselling Programs.’ Response provided by the Department of Justice

Through its inquiry program, PAEC follows up recommendations and matters that the Auditor‑General has raised in reports to Parliament. These inquires also provide us with information on agencies’ implementation of our recommendations.

In 2011–12, PAEC reported on its inquiries into six Auditor-General reports tabled between January and June 2009:

These were the first follow-up inquiries conducted by the newly formed committee. Generally, PAEC supported the direction of the Auditor-General. As well as finding progress in many of the areas identified by VAGO, PAEC identified shortcomings, often reinforcing VAGO’s recommendations.

Excerpts from PAEC’s follow‑up inquiries

Access to Public Hospitals (April 2009)

‘It was… pleasing to the Committee to find that a number of initiatives have been subsequently taken or commenced at state level to address the audit findings and recommendations.’

‘Central to the actions taken… [was] the release by the government of its Health Priorities Framework 2012–22: Metropolitan Health Plan in May 2011.’

Preparedness to Respond to Terrorism Incidents: Essential Services and Critical Infrastructure (January 2009)

‘The Committee considers that, as a consequence of this ongoing lack of acceptance of its responsibilities as alerted to by the Auditor‑General… the Department has not adequately supported the Premier, as head of Government, and ‘Minister’ ultimately responsible and accountable to Parliament and the Community for critical infrastructure protection arrangements across the whole‑of‑government.’

Management of School Funds (May 2009)

‘The Committee does not consider the actions referred to in the Department of Education and Early Childhood Development’s response to have satisfactorily addressed the Auditor‑General’s recommendation which was focused on the legislative reporting requirements of school co-operatives not how their transactions should be recorded in schools’ financial systems.’

In June, the government tabled its response to the first two of these follow-up inquiries: Preparedness to Respond to Terrorism Incidents: Essential Services and Critical Infrastructure and Access to Public Housing. The audited agencies supported most of PAEC’s recommendations.

Changes to agency practices

During, and following our audits, we often see change occur in direct response to our findings and recommendations. We receive advice from agencies about these changes.

Observations from audit teams of changed practices

Personal Expense Reimbursement, Travel Expenses and Corporate Credit Cards (May 2012)

The audit identified uncertainty in the Department of Treasury and Finance’s (DTF) Purchasing Card Rules around what constituted ‘significant unauthorised use’ of a purchasing card. During the audit, DTF amended the guidelines to include criteria for determining whether unauthorised use of a card is significant.

Management of Road Bridges (December 2011)

VicRoads is adjusting its approach to lobbying for bridge asset management funds through the annual Budget and Expenditure Review Committee process. It is now starting to focus on potential improvements for services and customers.

Supporting Changes in Farming Practices: Sustainable Irrigation (October 2011)

During the audit, Department of Sustainability and Environment staff indicated the audit had identified a number of areas for improvement. Activity was initiated during the audit to commence work on improvements to the Sustainable Irrigation Program.

Our reports can also stimulate or support a fundamental review of a particular area or business, as government seeks to address our findings and recommendations in a comprehensive way.

One example of this was our performance audit Municipal Solid Waste Management (June 2011). This audit was critical of Sustainability Victoria (SV) and, together with a review commissioned by the minister, this audit was a driver for a new strategic direction for SV. SV’s final review report, published in February 2012 drew significantly on our report.

Our Access to Public Housing (March 2012) performance audit is another example of an audit supporting a fundamental review of a program. This audit was highly critical of the Department of Human Services’ planning for public housing. The audit recommendations have since been adopted by government to drive public discussion into the future operation of public housing. The consultation paper Pathways to a fair and sustainable social housing system drew heavily on the report.

Value of audits to audited agencies

Another way of understanding the impact of our audits is to assess the extent to which the audited agencies found value in the audit. This gives us some indication of whether the audit was useful to the agency and therefore, likely to have impact. For every audit, we seek this information through a post-audit survey.

These surveys give us information on the extent to which the audited agency agreed that the:

For attest audits the ratings for audit value survey questions showed a slight improvement this year, from 73 to 74 out of 100. For performance audit the ratings also showed an improvement, from 65 to 69. These results are promising, as they suggest agencies may be more committed to addressing our findings and recommendations.

Extracts from surveys

‘As has been the case in previous years, the audit team has again performed on site in a professional, competent manner, displaying a respectful and courteous approach.’

‘It is useful to have audits such as these highlight certain shortcomings. We were well aware of our position and had already started motions to improve this, but it is indeed a good impetus to improve our processes.’

Impact on public debate

Public debate often draws on our audits. This debate can create greater transparency around some key accountability and performance issues raised by our audit program, and encourage the government to act on some critical findings. The extent to which the public responds to and uses our reports is, therefore, another important factor when measuring the impact of our work.

We measure our impact on public debate though:

Correspondence from the public

Members of the public often write to us about specific audits or areas of public sector activity. In 2011–12, the number of unsolicited inquiries increased by 45 per cent from 96 to 139 letters, emails or phone calls.

There was substantial correspondence around issues relating to the Compliance with Building Permits (December 2011) audit. Correspondence like this also helps inform our own planning for future audit topics.

Media coverage

While we do not set out to gain media attention, our reports can ignite debate on issues of public interest in the media. To some extent, the degree of media attention reflects whether an issue is topical. Also, media coverage tends to focus on exceptions and rarely canvasses positive findings. Nonetheless, when considered within a suite of measures, the degree of media interest does provide some insight into the level of public interest for VAGO reports. Media attention can also be a positive reflection on the relevance of our topic selection.

Our reports regularly feature in national, state, local and regional media. In 2011–12, 341 print articles and 358 broadcast items (radio or television) mentioned our reports. This is a decrease of 25 per cent compared to 2010–11, due in part to the significant media interest in 2010–11 in the performance audit Access to Ambulance Services which received 360 references alone. However, across the year, our reports were mentioned more consistently. For 47 of the 52 weeks of 2011–12, there was at least one mention of one of our reports in the print media, compared to 41 weeks in 2010–11.

Several of our reports generated intense media interest and coverage. The Road Safety Camera Program (August 2011) received 41 per cent of the total media coverage related to 2011–12 audits. Print media coverage of this audit began in early July 2011 prior to tabling and was reported up until mid-April 2012. Public Transport Performance (February 2012), Access to Public Housing (March 2012), Maternity Services: Capacity (October 2011) and Compliance with Building Permits (December 2011) also received significant coverage.

The Auditor-General and VAGO were also mentioned frequently in non-report related articles or items. Ninety print articles and 13 broadcast items referred to the Auditor-General or VAGO in this manner. Topics included the establishment of the anti‑corruption commission, requests for investigation into issues, discussion of future reports and assurance of financial statements.

Our older reports continued to receive media attention, with 24 audit reports from previous years mentioned in print (102 articles) or broadcast (48 references). Mentions of older audit reports primarily focused on reports from 2010–11 but dated back as far as 1986.

Website activity

All VAGO reports are published on the VAGO website and increasingly, this is how the community accesses our reports.

In 2011–12, there were around 102 000 visits by 61 149 unique visitors to the VAGO website, an increase of 33 per cent. New visitors made up 56 per cent of all visitors. Figure 17 shows the website visits in 2011–12. The peaks coincide with tabling days.

[Figure 17] Website visits 2011–12

Website visits 2011–12
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Promoting accountability and continuous improvement

In this chapter we discuss VAGO’s endeavors to be a catalyst for continuous improvement in the accountability and performance of the public sector.

Introduction

VAGO’s overriding purpose is to provide assurance to Parliament and as such, we focus on completing rigorous audits and meeting our output measures.

Our Strategic Plan 2010–11 to 2014–15 sets out our objectives and strategies to fulfil this purpose, as shown in Figure 18.

[Figure 18] VAGO’s objectives and strategies

Objectives

Strategies

Being authoritative and relevant

Better targeting topics

Directing audit effort to areas of public value

Promoting broader access to reports

Being highly regarded by Parliament

Smoothing the flow of reports

Better engaging Parliamentary committees and individual Parliamentarians

Fostering productive relationships with audit clients

Appropriately informing audit clients about audit plans, processes and activities

Fostering professional relationships

Fostering a stimulating working environment

Conducting rigorous performance planning and management

Supporting a safe and healthy workplace

Leveraging our systems and processes to improve organisational performance

Aligning systems and processes

Investing in capability for long-term sustainability

Being a responsible corporate citizen

There are many activities we undertake to achieve our vision of being a catalyst for continuous improvement in the accountability and performance of the public sector.

We look to leverage our reports and experience to improve other activities and aspects of the state and local government sectors. Internally, we aim to model the values of accountability and continuous improvement in our own processes and practices.

Leveraging our reports and experience

We look for opportunities to share lessons and the knowledge we have gained from our audits with government—including in other jurisdictions—peak bodies, individual agencies and the general public. This year, we continued a high level of engagement in various forms, and have identified some new ways of engaging with stakeholders.

Activities included:

Working with other integrity bodies

Increasingly, there are occasions when VAGO sees merit in working with other integrity bodies on projects. While we are prevented by the Audit Act 1994 from sharing information collected during the course of an audit, we seek ways to work within these limitations.

In recent years, both the Auditor‑General and the Victorian Ombudsman have identified recurring issues with information and communication technology enabled (ICT-enabled) projects. In 2011–12, we worked with the Ombudsman on an investigation into this issue. Two experienced VAGO staff were seconded to the Ombudsman’s office to assist in the investigation. On 23 November 2011, the Victorian Ombudsman tabled its Own motion investigation into ICT‑enabled projects, acknowledging the contribution provided by VAGO.

We are also working with other Australian audit offices to conduct a concurrent audit. Seven jurisdictions will conduct audits on the implementation of the National Partnership Agreement on Homelessness, using a common scope and planning approach. Our audit will examine performance in Victoria. Each jurisdiction aims to table a report by the end of the first quarter of 2013. Taken together, these should provide a national picture on the effectiveness of the partnership agreement.

Engaging with the Australasian Council of Auditors-General

In 2011–12 VAGO continued its active involvement in the national and international development of public sector audit, through our participation in the Australasian Council of Auditors-General (ACAG).

The Auditor-General attended ACAG meetings in Sydney and Brisbane in 2011, and Sydney again in March 2012 as part of a broader collaborative meeting between ACAG and the Canadian Council of Legislative Auditors.

VAGO also participates in specialist ACAG networks that allow senior staff to share views and learn from each other. In 2011–12, VAGO attended or hosted meetings of the ACAG:

VAGO exchanged information with ACAG members through ‘round‑ups’ on strategic topics, monthly newsletters and seminars. Strategic topics discussed included:

Pacific Association of Supreme Audit Institutions (PASAI)

PASAI is the official association of supreme audit institutions in the Pacific region. While VAGO is not a national audit institution, we engage with and support this association in a pastoral role.

In August 2011, the Auditor-General and a Performance Audit Director attended the PASAI Congress in Tonga. Attendees examined tools and strategies to assist with organisational change.

VAGO also plays a leading role in PASAI's Regional Working Group on Environmental Auditing. As well as engaging with the group throughout the year, representatives from VAGO attended its meeting in Sydney in April 2012. VAGO presented on our recent suite of performance audits relating to the environment and sustainability.

International engagement

VAGO has continued to receive significant interest from international offices seeking to develop their capability, and form or strengthen relationships with VAGO.

In 2011–12, we had the opportunity to share our insights, systems and practices with delegates from a number of organisations. We also participated in secondment and internship programs with government organisations and universities from around the world. Appendix 2 lists these delegations, placements and secondments.

To maximise the value that VAGO and the visiting offices get from this engagement, in 2010–11 we began consultations with other Australian public sector audit offices to develop a nationally coordinated approach to requests for delegations, placements, and secondments.

In 2011–12, we formalised our own activities through the development of an international engagement policy and a secondment policy. These new policies will assist in our engagement with international stakeholders interested in visiting VAGO, and allow us to prioritise opportunities for our staff.

Contributing to inquiries and reviews

In addition to the ongoing PAEC follow-up of audit reports covered in pages 33–34, VAGO seeks to contribute to Parliamentary and government reviews to share relevant audit findings and provide an audit and accountability perspective.

During 2011–12, we contributed to PAEC's Inquiry into Effective Decision Making for the Successful Delivery of Significant Infrastructure Projects. We made a submission to the inquiry in November 2011 and presented evidence to PAEC at a public hearing in March 2012. Engagement with PAEC on this inquiry continues.

Also in 2011–12, VAGO drew on previous audit reports to provide evidence at a public hearing for the Road Safety Committee's Inquiry into Motorcycle Safety.

Review of the Audit Act 1994

In 2010–11, PAEC conducted an inquiry into the Audit Act 1994 and tabled its final report in October 2010. VAGO contributed extensively to this inquiry.

Following legislation introducing the Independent Broad-based Anti‑corruption Commission, the review was deferred to 2012. VAGO continues to consult with the Department of Treasury and Finance on the review.

Presentations and addresses

Throughout 2011–12, the Auditor‑General and senior VAGO staff presented at conferences, educational courses, and professional and industry groups. Presentations ranged from the discussion of an individual audit to broader conversations on issues such as accountability, governance and asset management.

The Auditor-General gave keynote addresses at national events on topics including: managing infrastructure assets; trends in public sector audit legislation; the role of audit in Westminster systems; and key areas of risk for public sector management.

Key audit themes

Each year we look back over the year's audit reports to identify common challenges in the public sector. We share these themes with ministers, heads of departments, audit committees, and other relevant stakeholders. These are called our key audit themes. Several of the Auditor-General’s presentations promoted our analysis of these key themes.

In August 2011, we launched our 2010–11 key audit themes at a forum for stakeholders. This was the third year of our themes analysis.

Key audit themes 2010–11

Managing performance of outsourced services

Regulation, compliance and oversight

Using evidence to support decision-making and planning

Reporting meaningfully on performance

Managing risks from joined-up activities

Probity in procurement

Security of systems and information

Financial sustainability

Funding and governance models

Regional and metropolitan engagement

To enhance relationships with audited entities, the Auditor-General regularly visits regional areas. In 2011–12, the Auditor-General visited Bendigo, Geelong and Dandenong. Attendance was strong, and included representatives from local government, water authorities, health services and educational institutions. A number of participants commented that the sessions are informative, particularly information on the key audit themes and our annual plan.

Parliament House Open Day

Parliament House Open Day is an annual event for the public. VAGO attended again this year to engage with the public, communicate about VAGO and promote our reports.

Improving accessibility of reports

To promote broader access to our reports, all VAGO reports are now published in HTML, improving search capability.

Accountability and continuous improvement at VAGO

Our commitment to continuous improvement and accountability applies equally to our own work as it does to the rest of the public sector. To help us to continually raise our standards, we use a range of internal and external quality assurance processes to better meet the needs of Parliament and audited agencies.

We have developed a continuous improvement register, to consolidate identified improvements from a range of sources, including: legislative reviews of other audit offices, preparatory work for, and findings from, the 2010 performance audit of VAGO, audited agency and Parliamentarian survey results, external reviews of audits and internal audit reports. Progress on the improvement initiatives is monitored and reported to the Executive Management Group biannually.

Internal quality assurance processes include our:

Our external quality assurance processes include:

Framework for selecting areas of audit focus

The quality of VAGO’s reports and advice begins with the choice of the right area of audit focus. Each year we select attest audit areas of focus and performance audit topics using methodologies which comply with the Act and Australian auditing standards.

Selection of attest audit areas of focus

Each year, our attest auditors review and test key internal controls over financial systems of each government entity to identify any material misstatements in its financial report. Other systems and controls are assessed annually, but tested less frequently. VAGO identifies ‘areas of focus’, which we report on in more detail in our sector-based reports. Coordinating our audit coverage of these systems across categories of entities enables us to identify, draw out and report on systemic or sector-specific issues.

Selection of performance audit topics

VAGO uses a topic selection framework for selecting areas of performance audit focus. We identify areas of economic, social and environmental risk in the public sector. This is informed by:

This framework is aligned with the Victorian Government’s five goals for a stronger, fairer and safer Victoria as outlined in the Governor’s speech at the opening of the 57th Parliament in December 2010.

For more information on our framework for selecting areas of attest audit focus and performance audit topics, please refer to Appendix C and D of our Annual Plan 2012–13.

Additional Auditing Standard 2006:02

This standard requires that, where Auditing and Assurance Standards issued by CPA Australia and the Institute of Chartered Accountants in Australia have not yet been revised and reissued by the Auditing and Assurance Standards Board (AuASB), they are to be applied where they are not inconsistent with the AuASB’s standards.

In 2011–12, this included the following standards issued by the Australian Accounting Research Foundation, on behalf of CPA Australia and The Institute of Chartered Accountants in Australia:

  • AUS 804 The Audit of Prospective Financial Information
  • AUS 810 Special Purpose Reports of the Effectiveness of Control Procedures.

Requests from Members of Parliament

Parliamentarians write to the Auditor-General to raise matters of concern and suggest areas for audit attention. As with all inquiries, these are assessed by the office to determine risk and materiality.

In 2011–12 the Auditor-General received six inquiries from Members of Parliament seeking to stimulate audit activity. The performance audit Road Safety Camera Program, which was tabled in August 2011 arose from a request made by a minister.

The performance audit TAFE Governance was tabled in October 2011. The need for this audit was identified through VAGO's attest audit activities but was also raised by a Member of Parliament.

Standards-based audit methodology

Under the Audit Act 1994, we must comply with the auditing standards issued by the Australian Auditing and Assurance Standards Board. These cover aspects of an audit including planning, communication, conduct, evidence, quality assurance, delegations and reporting.

The Audit Act 1994 also enables the Auditor-General to apply additional auditing standards for the conduct of audits. An additional auditing standard was applied in 2011–12: Additional Auditing Standard 2006:02.

We comply with all Australian Auditing Standards and have developed our audit methodologies based on these standards.

Attest audit methodology

VAGO’s attest audit approach enables us to form an audit opinion on agencies’ financial statements and non-financial performance statements efficiently and effectively.

Our attest audit methodology is integrated into our electronic audit toolset, IPSAM, which was developed under a joint arrangement with the Queensland Audit Office and is either in use, or being implemented, in six Australian jurisdictions. By following IPSAM procedures, our attest audits comply with Australian Auditing Standards.

Performance audit methodology

VAGO’s performance audits are conducted using our own performance audit methodology.

We use an electronic database, AmP, to document work and evidence, and assist in managing and reviewing the audit project.

AmP contains policies, guidance and standard procedures which must be followed when carrying out a performance audit. By following all AmP procedures, our audits comply with Australian Auditing Standards.

Debrief process

At the end of every performance audit we conduct an audit debrief to reflect on the audit, identifying positives and negatives about the quality of the audit process and reporting.

Quantitative and qualitative information is collected about each report and areas for improvement identified are considered in future activities.

Quality assurance framework

In 2011 VAGO adopted a quality assurance framework, which brings together the quality systems and processes VAGO uses. A key component of the framework is an internal assessment of the maturity of these systems and processes against ACAG’s Governance and Audit framework. This framework covers the requirements of the professional standards and in particular ASQC1/APES 320 – Quality Control for Firms that Perform Audits and Reviews of Financial Reports and Other Financial Information, and Other Assurance Engagements.

In May 2012, VAGO's compliance with the ACAG Governance and Audit framework was assessed through a peer review. Our self‑assessment and the external assessment of the maturity of these systems and processes against the framework have demonstrated that VAGO has adequate systems of quality control and meets or exceeds legal and legislative requirements and professional standards applicable to public sector audit offices.

Safeguarding quality

We safeguard the quality of our audits by:

  • involving senior officers at all phases of the audit, including approving the plan and reviewing major issues from each audit
  • requiring senior staff to review audit results to confirm that the audit meets professional standards
  • assigning a second senior officer to review and confirm the quality of the audit. This applies to all high-risk and material entity attest audits and all audits in performance audit.

Parliamentary accountability measures

The Constitution Act 1975 states that the Auditor-General has complete discretion in his or her activities and is not subject to direction from anyone. Balancing these profound protections of independence is a suite of accountability requirements.

VAGO is subject to both attest and performance audits. Parliament appoints our auditors, on the recommendation of PAEC. Our financial statements are audited annually, and every three years we are subject to a performance audit. PAEC determines the performance audit’s terms of reference. Our next performance audit is in 2013.

In addition to these measures, there are accountability measures over our audit process. Under the Audit Act 1994, we must consult with PAEC when developing our annual plan, and on the specification for each performance audit.

Cold reviews

To seek assurance that our audits meet the profession’s and VAGO’s quality standards, we engage external parties to undertake a ‘cold’ review of a sample of completed attest and performance audits, including audits conducted by external audit service providers.

Matters covered in the reviews of attest audits include determining whether:

Results from our cold reviews of attest audits are now reported as one of our performance measures of quality. Please see page 26 for discussion of results of cold reviews of attest audits.

For performance audits, we engage external parties to undertake a review of a sample of performance audits to assess whether the:

Findings from cold reviews

Findings and issues from the cold reviews are communicated to staff through debriefing sessions, specific training, and amendments to audit methodology policy and guidance.

Benchmarking our activities

VAGO cooperates with audit offices across Australia in measuring quantitative and qualitative benchmarks of the operations of audit offices and specific characteristics of each jurisdiction. Results of this benchmarking are used internally to identify priority areas for improvement.

Two of the measures compare audit office costs as a proportion of total state assets and transactions. In 2011–12, VAGO’s total audit cost:

These results compared with other offices as expected because, while Victoria performed better than the national average, this should be interpreted with caution given the differences between jurisdictions and audit offices.

When allowing for the fact that overall we produce a higher proportion of performance audits, we feel we are performing well on these measures.

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Managing VAGO

In this chapter we provide information about the management of VAGO, compliance issues, and workforce data.

Governance

Senior management

One of the challenges brought on by the success of VAGO’s audit program is that our staff are in great demand. In 2011–12, Andrew Greaves, who was an Assistant Auditor-General in Victoria since 2006, was appointed Auditor-General in Queensland. In May we welcomed Natalia Southern as the new Assistant Auditor‑General for Performance Audit.

Former Executive Director of Corporate Services, Gail Conman, left late in 2011–12 to take up a new role as Project Director for the Melbourne Markets Redevelopment. A recruitment exercise will be run in the first quarter of 2012–13 to permanently fill this position.

[Figure 19] Organisational chart

Organisational chart
Auditor-General of Victoria
Des Pearson profile picture

Des Pearson, BBus, GradDipMgt, Hon D Bus (CQU), FCPA, FIPAA, FAIM, FCA

Des Pearson was appointed Auditor-General of Victoria in October 2006. He was previously Auditor General of Western Australia (1991–2006). He exercises his audit powers and functions under the Constitution Act 1975 and the Audit Act 1994 and reports to the Parliament of Victoria.

Chief Operating Officer
Peter Frost profile picture

Peter Frost, BA, BLitt, MPhil (Cambridge), MEd, PhD (Harvard)

Peter was appointed VAGO’s Chief Operating Officer in January 2007. He has extensive senior public sector management experience, gained primarily in the Victorian public sector, higher education and international development with the Commonwealth Secretariat, World Bank and Asian Development Bank.

Peter reports directly to the Auditor‑General on the management and performance of office operations, and oversees our technical and audit operation activities, as well as our business support activities.

Assistant Auditor-General, Financial Audit
Peter Frost profile picture

Ellen Holland, BBus (Acc), FCPA, MIPAA

Ellen was appointed Assistant Auditor-General, Financial Audit in March 2011 after 17 years in the Performance Audit Group, including three years as Senior Director.

During this time she was responsible for developing VAGO’s Annual Plan. Before moving to Performance Audit, Ellen held various positions in the Financial Audit Group within VAGO.

Assistant Auditor-General, Performance Audit
Natalia Southern profile picture

Natalia Southern, BBus (Hons), MPubPol

Natalia joined the Auditor-General’s Office in May 2012. Natalia is an economist with almost 20 years of experience in a range of Commonwealth and state policy and regulatory bodies. These include the National Competition Council, Victorian Department of Treasury and Finance, the Productivity Commission and the Essential Services Commission.

Prior to joining the Auditor-General’s Office, Natalia was a senior consultant at ACIL Tasman where she advised government and private sector clients on energy, water and transport sector issues.

Director, Policy and Coordination Directorate
Marco Bini profile picture

Marco Bini, MCom, LLM, MPubPol

Marco joined the office in September 2007 and was appointed Director of the Policy and Coordination Directorate in January 2009. He has significant public sector experience including with the Department of Premier and Cabinet, WorkCover, and the State Revenue Office.

Marco provides a range of legal, policy and administrative advice to the office including on statutory interpretation, contracting, application of public sector legislation, and legal issues arising from audits.

Executive Management Group

The Executive Management Group (EMG) members are the Auditor‑General, Chief Operating Officer, Assistant Auditors-General, Executive Director Corporate Services, and the Director Policy and Coordination Directorate.

EMG meets monthly to provide advice and counsel to the Auditor‑General to assist with the delivery of his statutory objectives as described in the Audit Act 1994.

Key functions and responsibilities of the EMG include:

The following subcommittees report to the EMG:

The following subcommittees report directly to the Auditor-General:

Remuneration Committee

This committee comprises the Auditor-General, the Manager People and Culture, and an independent member. In 2011–12, the independent member was Mr. Patrick O’Grady.

The committee is responsible for VAGO’s remuneration policy, which supports its strategic goals and business objectives and is consistent with our human resources management strategies and policies. The committee monitors the executive officer annual performance appraisal process and salary review.

Technical Issues Committee

This committee comprises the Assistant Auditor-General, Financial Audit, the Director, Methodology and Standards and a Financial Audit Director.

The committee provides advice and recommendations to the Auditor‑General on proposed modifications to attest audit opinions, the appropriate policy or guidance that VAGO should adopt in relation to significant financial reporting and auditing issues, and issues affecting the legislative mandate of the office.

Audit Committee

Audit Committee Chair’s report (year ended 30 June 2012)

The Audit Committee is appointed by the Auditor-General to assist in assuring that there is appropriate and effective accounting, auditing, internal control, business risk management, compliance and reporting operating within VAGO.

The role of the committee is to advise the Auditor‑General independently to help him meet his management responsibilities at VAGO as prescribed in the Financial Management Act 1994, the Audit Act 1994 and other relevant legislation and requirements.

All committee members are independent, non-executive members who are appointed by the Auditor-General for a maximum term of three years and are eligible to be reappointed for one further term.

The term of Mark Anderson, chair of the Audit Committee since 1 July 2006, ended on 30 June 2012.

Joanna Perry was appointed Chair from 1 July 2012. Deidre O’Donnell resigned in December, and Sara Watts was appointed in January 2012. The members of the Audit Committee for the year ended 30 June 2012, their qualifications and attendance at meetings, are set out in Figure 20.

[Figure 20] Audit committee members 2011–12

Committee member

Meetings attended

Meetings held

Mark Anderson (Chair to 30 June 2012 when term finished)

FCPA, MACS, FAICD Chief Executive Officer, Doutta Galla Aged Services

4

4

Kerry Jacobs

BCom, MCom(Hons), PhD, FCPA, FCA, ICAA, NZICA Professor of Accounting, the Australian National University

4

4

Deirdre O’Donnell (resigned 31 December 2011)

BA, MBA, MCommrclLaw New South Wales Information Commissioner

2

2

Joanna Perry (Chair from 1 July 2012)

MNZM, FCA (NZICA), FCA (ICAEW), MA New Zealand professional non-executive director

4

4

Sara Watts (appointed 1 January 2012)

BSc, MBA, GAICD, CPA

Chief Financial Officer, IBM Australia and New Zealand

1

2

The responsibilities of the Audit Committee are defined in its charter which is approved by the Auditor‑General. The responsibilities of the committee include:

In fulfilling these responsibilities, the work of the Audit Committee has included:

The Audit Committee has appropriate financial and industry expertise. All members are financially literate and have an appropriate understanding of the operation of the office.

Signature of Joanna Perry

Joanna Perry (Chair)
8 August 2012

Compliance with legislation and policy

This section discusses legislation and policy with which VAGO is required to comply and report on this compliance.

Risk management

The following is an attestation on compliance with the Australian/New Zealand Risk Management Standard:

I, Desmond Pearson, certify that the Victorian Auditor-General’s Office has critically reviewed the risk profile within the last 12 months and has robust risk management processes, including internal control systems that enable the executive team to understand, manage and control risk exposures. These processes have been verified as being consistent with the Australian/New Zealand Risk Management Standard AS/NZS ISO 31000:2009.

The Audit Committee agrees that this attestation is consistent with the committee’s understanding of VAGO’s risk management policies and processes, based on the evidence, reports and communications provided to the committee throughout the year.

Signature of D D R Pearson

D D R Pearson
Auditor-General

8 August 2012

Whistleblowers legislation

The Whistleblowers Protection Act 2001 was introduced in Victoria on 1 January 2002. The legislation encourages and facilitates the making of disclosures of improper conduct by public officers and public bodies. The legislation protects whistleblowers who disclose improper public officer and public body conduct, and sets up a system to investigate disclosed matters.

The exercise of the powers and the discharge of responsibilities by the Auditor-General under the Audit Act 1994 are expressly excluded from application of the legislation. The administrative processes of the office, however, are fully subject to the legislation. There were no disclosures on VAGO administrative matters during 2011–12.

VAGO has developed procedures for handling whistleblower disclosures and the Executive Director, Corporate Services is VAGO’s protected disclosure coordinator. These procedures have been distributed to staff, and members of the public can request a copy. In 2011–12, all staff were required to complete training in these procedures.

Section 41 of the Whistleblowers Protection Act 2001 allows the Ombudsman to refer a disclosure to the Auditor General, if appropriate. The Auditor-General, however, decides whether or not to investigate, in accordance with powers under the Audit Act 1994. During 2011–12, VAGO received one referral from the Ombudsman for examination under the Audit Act 1994.

Privacy legislation

VAGO works closely with the office of the Victorian Privacy Commissioner, as required, to make sure that our audits complement information privacy principles and legislation. VAGO continues to be fully compliant with relevant privacy legislation.

Freedom of information

The Freedom of Information Act 1982 provides the right of the community to access, as far as possible, information held by the Victorian Government.

Section 20A of the Audit Act 1994 broadly precludes us from disclosing information we gather during an audit to a third party, other than reporting to Parliament. Section 20B of the Audit Act 1994 also precludes third parties from accessing any audit-related information and documents we hold.

Our administrative processes, however, come under the state’s freedom of information legislation. VAGO received no applications under this legislation in 2011–12.

Freedom of Information audit

In 2011–12, we conducted a performance audit which examined the extent to which the 11 Victorian public sector departments and Victoria Police met the requirements of the Freedom of Information Act 1982.

The report, which tabled in April 2012, is available on our website, www.audit.vic.gov.au, as are all our reports.

National Competition Policy

The Victorian Government is part of the inter-governmental Competition Principles Agreement. The principle of this policy is to not restrict competition.

VAGO is compliant with the National Competition Policy, including compliance with requirements of the Department of Treasury and Finance’s Competitive Neutrality Policy.

Victorian Industry Participation Policy

In October 2003 the Victorian Parliament passed the Victorian Industry Participation Policy Act 2003 that requires public bodies and departments to report on the application of the Victorian Industry Participation Policy (VIPP). This is intended to promote employment and business growth by expanding opportunities for local industry. Departments and public bodies are required to apply VIPP in all tenders of more than $3 million in metropolitan Melbourne and $1 million in regional Victoria. VAGO did not complete any tenders or contracts that were subject to VIPP during 2011–12.

Building Act

VAGO does not own or control any government buildings and, therefore, has no responsibilities under the Building Act 1993.

Managing and responding to complaints

VAGO has two complaints policies—Managing complaints about the conduct of audits and Managing complaints about matters other than audits. These form part of our Framework for managing complaints about VAGO.

In accordance with these policies, a report is made to senior management on performance against time lines, and on trends and issues arising from the complaints and our responses.

In 2011–12, three complaints were made to VAGO under these policies. Two were made under the Managing complaints about the conduct of audits policy and one was made under the Managing complaints about matters other than audits policy.

Of the three complaints, two were acknowledged within five business days and one complaint was acknowledged within six business days. One complaint was finalised within 28 days. The other two complaints were more complex and the complainants were advised of the extension of time required within 28 days. One complaint took 53 days to investigate and finalise, and the other took 113 days.

For the two complaints about the conduct of audits, we found that the audits complied with Australian Accounting Standards and the requirements of the Financial Management Act 1994. The other complaint was upheld and an explanation was provided to the complainant.

Due to the small number of complaints received, there are no trends to report.

Our staff

VAGO is committed to having the right mix of people, in the right place, at the right time. We aim to foster a culture of excellence.

We value our people and seek to support them by providing them with a broad range of flexible working arrangements, challenging variety in their roles, and a close-knit, collaborative working environment.

Workforce capacity

Our staff profile

VAGO staff numbers are reported in accordance with the financial reporting direction FRD 29. Our overall headcount at 30 June 2012 was 176, with 162 ongoing staff and 14 fixed-term or casual staff.

Of our 162 ongoing staff, 142 work full-time and 20 work part-time. Of our 14 fixed-term and casual staff, 12 work full-time and two work part‑time. Figure 22 has a breakdown by gender, age and classification.

[Figure 21] Employee numbers at 30 June 2012

Overall

Ongoing

Fixed-term and casual

Year

Total number (headcount)

Ongoing (headcount)

Ongoing FTE

Fixed-term and casual (headcount)

Fixed-term and casual FTE

2009

153

142

139.2

11

10.0

2010

173

142

138.8

31

28.5

2011

170

151

146.1

19

17.3

2012

176

162

152.0

14

10.6

[Figure 22] Employee profile by gender, age and classification

30 June 2012

30 June 2011

Ongoing

Fixed-term and casual

Ongoing

Fixed-term and casual

Number (headcount)

FTE

Number (headcount)

FTE

Number (headcount)

FTE

Number (headcount)

FTE

Gender

Male

69

66.3

3

2.0

74

73.2

4

3.5

Female

93

85.7

11

8.6

77

72.9

15

13.8

Age

Under 25

12

12.0

1

0.0

12

12.0

2

1.3

25–34

66

60.8

8

6.0

55

52.7

12

11.1

35–44

42

38.6

2

1.6

38

36.6

2

2.0

45–54

24

23.0

2

2.0

28

27.2

2

2.0

55–64

17

16.6

1

1.0

18

17.6

1

0.9

Over 64

1

1.0

0

0.0

0

0.0

0

0.0

Classification

VPS Executives

19

18.9

0

0.0

19

18.8

0

0.0

VPSG1

0

0.0

0

0.0

0

0.0

0

0.0

VPSG2

9

8.4

2

1.0

14

13.4

3

2.3

VPSG3

32

31.3

4

3.0

26

25.7

2

1.5

VPSG4

32

30.2

2

1.0

26

25.0

9

8.6

VPSG5

25

22.7

2

2.0

23

22.0

3

3.0

VPSG6

38

33.9

3

2.6

34

32.6

0

0.0

VPSG7(a)

7

6.6

1

1.0

9

8.6

2

1.9

(a) The VPSG7 (also known as Senior Technical Specialist) roles at VAGO comprise five specialist senior auditing roles, two senior accounting roles (CFO delivered through a role sharing arrangement) and one senior legal role.

Employee qualifications and training

The work of an audit office requires people that are highly qualified, expert and knowledgeable. VAGO’s staff are professionally qualified and accredited in a broad range of disciplines. Many of our staff are qualified in the accounting field, and we also have economists, forensic accountants and staff with other qualifications, such as IT, policy, business and public sector administration.

Over 87 per cent of all VAGO employees have a qualification at bachelor level or higher, with a large proportion of double degrees, and 2.8 per cent have or are studying for a PhD. A breakdown by staff type and comparison to the wider public sector is shown in Figure 23.

In addition, our financial auditors are required to undertake professional accounting accreditation from CPA Australia or Chartered Accountants (CA) Australia. All senior managers and above must be accredited by these organisations or a similar overseas organisation. In 2011–12, 32 VAGO employees had received CPA accreditation, and 19 had received CA accreditation. Six staff members had accreditation from similar overseas organisations.

[Figure 23] Qualifications of VAGO staff compared with the Victorian public sector as a whole

Highest education level achieved

Bachelor degree (per cent)

Postgraduate (per cent)

Total staff with a tertiary qualification (per cent)

Performance Audit staff

39.7

57.1

96.8

Financial Audit staff

76.7

15.5

92.2

Other staff

26.8

36.6

63.4

All VAGO staff

52.3

35.2

87.5

SSA figures for public sector staff(a)

32.0

34.0

66.0

(a) State Services Authority results of the 2010 and 2011 People Matter survey.

We also invest heavily in learning and development for our staff. On average, VAGO staff spent 6.1 days in training in 2011–12. This average figure includes hours spent in training by VAGO employees as well as secondees, temporary staff and contractors who have worked with VAGO during 2011–12.

This training was delivered at a total cost of $582 737. Learning and development expenditure includes expenditure on training providers, study assistance, external course and seminar attendance, coaching, and professional memberships.

This overall cost does not include the salary cost for staff hours spent receiving or delivering training.

Recruitment and retention

Voluntary turnover is considered to be resignation from an ongoing position or a request to terminate a fixed term contract early.

In 2011–12, the overall voluntary turnover was 11.9 per cent, compared with 19.7 per cent for 2010–11. In 2011–12, there were six exemptions made from notification of vacancy.

[Figure 24] Departures from VAGO

Ongoing (including executives)

Fixed term and casual

Year

Employees (headcount)

FTE

FTE

Voluntary turnover rate (per cent)

2008–09

33

33.0

6.0

23.7

2009–10

14

14.0

16.0

17.3

2010–11

27

26.4

18.8

19.7

2011–12

21

19.7

11.8

11.9

[Figure 25] Exemptions from notification of vacancy, 2011–12

Classification

Number of exemptions

Circumstances as defined in office policy

VPSG 3.2

1

This was a 12 month fixed term contract that was exempted from advertising due to recent market testing being unfruitful and no scope for advertising the position internally due to the low grade of the position.

VPSG 4.1

2

These roles were directly appointed to ongoing roles due to the incumbents having significant skills that were brought to the positions and their length of time in the roles beforehand as fixed-term contractors. This meant it was highly likely that going to market would not find candidates more suitable than the incumbents.

VPSG 4.1

1

This vacancy was required to be filled at short notice. The individual was offered a 12 month fixed term contract to fill operational needs.

VPSG 5.1

1

This vacancy was required to be filled at short notice. The individual was offered a 12 month fixed term contract to fill operational needs.

STS 7.1

1

This position was granted on a 12 month fixed-term contract to back-fill an employee on maternity leave. The incumbent had acted for this person previously and due to their skills and organisational knowledge it was highly unlikely that going to market would find more suitable candidates.

Executive information

This information is available to members of Parliament and the public on request.

[Figure 26] Number of executive officers classified into ‘ongoing’ and ‘special projects’ at 30 June 2012

All

Ongoing

Classification

2011–12

2010–11

2011–12

2010–11

EO1

1

1

1

1

EO2

3

4

3

4

EO3

15

14

15

14

Total

19

19

19

19

Note: VAGO has no ‘special project’ executives.

[Figure 27] Breakdown of executive officers into gender for ‘ongoing’ and ‘special projects’ at 30 June 2012

Male

Female

Ongoing vacancies

Classification

Number

Variance

Number

Variance

EO1

1

0

0

0

0

EO2

1

–1

2

0

1

EO3

10

0

5

1

3(a)

Total

12

–1

7

1

4

Note: VAGO has no ‘special project’ executives.

(a) Three of the four vacancies are filled by senior staff acting in executive office roles receiving higher duties allowance.

[Figure 28] Reconciliation with executive numbers at 30 June 2012

30 June 2012

30 June 2011

Executives employed with total remuneration over $100 000

16

20

Vacancies

3

4

Executives employed with total remuneration below $100 000

6

4

Accountable officer(a)

1

1

Separations

–4

–6

Total executive numbers at 30 June

22

23(b)

(a) VAGO’s accountable officer is the Auditor-General who is an officer of Parliament and not a VPS executive. The Auditor-General is not included in other executive statistics presented in this report. His inclusion in this table adds one to VAGO’s executive totals.

(b) Total executive positions at June 30 was 19 filled positions plus three vacancies, i.e. 22.

Employment and conduct principles

Diversity

VAGO continued to value diversity in the workplace in 2011–12. The ‘equity, diversity and our values’ key result area in our strategic people and culture management framework reinforces VAGO’s commitment to fair and reasonable treatment of our people and audited agencies through:

We have continued the commitment through:

Information collected in VAGO’s annual staff review indicated that of employees who responded, 33 per cent were born outside Australia, compared to 19 per cent across the public sector.

While across the public sector, 19 per cent speak a language other than English at home, at VAGO:

Merit and equity

VAGO is obliged to comply with a range of federal and state legislation in relation to merit and equity, as well as the relevant Victorian Public Sector Standards and Guidelines.

VAGO has a range of policies and procedures in place to support the organisational commitment to making our workplace free from discrimination, harassment and bullying:

Staff Development and Consultation Group

This group provides a channel of communication between staff and management on matters directly affecting the culture and business of VAGO.

The twelve-member group has a rotating chair and comprises representatives at various levels across the four business units. Meetings are also attended by the Executive Director, Corporate Services as the EMG representative, and the Manager, People and Culture. The Auditor‑General and Chief Operating Officer attend at least one meeting a year.

In 2011–12, the group commenced a program of guest presentations to provide personal development for VAGO staff. The group chose presenters who could provide another perspective on issues affecting the public sector. These presentations were well received by staff in attendance and will continue into 2012–13.

Industrial relations

VAGO continues to maintain positive industrial relations outcomes with no disputes lodged either internally or with Fair Work Australia. During the year, there was no lost time due to industrial disputes.

Certified agreement

During 2011–12, all non-executive employees were employed under the Victorian Public Service Agreement 2006, 2009 Extended and Varied Version. Negotiations for the new VPS agreement, which began in 2010–11, were not finalised by the end of the 2011–12 financial year.

Code of conduct

All VAGO staff are required to agree to and abide by the Code of Conduct for Victorian Public Sector Employees of Special Bodies.

A new e-learning module on the Code of Conduct was implemented in 2011–12. All staff are required to complete the module on an annual basis.

Declaration of interests

All executive officers and business unit managers have completed statements declaring whether their interests, shares in, and other benefits from business enterprises could give rise to a conflict of interest, and there were no such conflicts.

Social club

VAGO staff engage in a range of activities that contribute both to our own vibrant organisation and more broadly as we seek to be good corporate citizens.

Our social club arranges events throughout the year to promote a spirit of teamwork and maintain a high level of staff morale. Staff participate in various sporting events, such as Run Melbourne, and the annual sports contest with the Department of Treasury and Finance.

We also conducted a number of fundraising activities for various charities, including the Motor Neurone Disease Association of Victoria, the Australian Red Cross, World Vision and beyondblue.

Workplace and environment

Internal audit

Moore Stephens, Accountants and Advisers, are appointed as VAGO’s Internal Auditor for the period 2010–11 to 2012–13. The Internal Auditor reports to VAGO’s Audit Committee. A three-year internal audit program has been approved by the Audit Committee and the following reviews were carried out in 2011–12:

Occupational health and safety

VAGO is an office-based work environment, with staff making off‑site visits to audited agencies around Victoria. The Occupational Health and Safety Act 2004 sets out the key principles, duties and rights in relation to occupational health and safety (OH&S) in Victoria.

VAGO’s OH&S management emphasises individual health, and includes a strategy to identify and manage hazards associated with psychological health. Our performance indicators are reported in Figure 29.

[Figure 29] Performance against OH&S performance indicators

Performance indicator

Performance

Coordinate and chair the OH&S committee and schedule quarterly meetings

Met

Four meetings held in 2011–12, meeting the requirements of the Occupational Health and Safety Act 2004

All new and existing staff are offered ergonomic assessments and required products are sourced and purchased

Met

All staff have been offered an ergonomic assessment within the first two weeks from the commencement date

All claims received are lodged with WorkCover within 5 working days

Met

100 per cent

All reported incidents and accidents are followed up within 24 hours and closed as soon as practicable

Met

100 per cent

Return to work plans are in place, as soon as practicable and regularly monitored until complete

Met in accordance with WorkCover requirements

Report on the number of claims and costs are provided to EMG as required

Met

In 2011–12:

Overseas travel

All overseas travel by VAGO staff must be approved by the Auditor‑General.

In 2011–12, the following overseas travel was made by VAGO staff:

Office-based environmental impacts

VAGO voluntarily joined the ResourceSmart program in 2007 to better understand, monitor and improve our environmental impacts. The Auditor-General has endorsed ‘VAGO’s Environmental Statement of Intent’, which includes a commitment to continually improving our environmental performance and says:

‘VAGO has adopted a holistic approach to environmental management and is committed to leading by example. We aim to minimise our:

In 2011–12, VAGO devised its second two-year environmental strategy, running from 1 July 2011 to 30 June 2013. The new strategy includes a revised governance structure to better align responsibilities with resources.

Under the new governance structure, EMG is responsible for endorsing strategic matters relating to environmental and sustainability issues. In this role, EMG will be supported by:

Emissions— Scope 1, 2 or 3?

When measuring environmental impact, the ‘scope’ refers to the type of greenhouse gas emission.

Scope 1—direct emissions from sources owned or controlled by VAGO such as petrol consumed in a VAGO‑owned vehicle.

Scope 2—direct emissions resulting from generation of electricity purchased by VAGO.

Scope 3—indirect emissions from sources not owned or directly controlled by VAGO but relating to our activities, such as employee travel.

VAGO formed the EMC in 2008 to improve, monitor and report the environmental performance of the office. Under the revised governance structure the EMC has moved from a body which is implementing change to an advisory role. It will also be an office champion of sustainable performance, embedding changes into the culture of the organisation.

This year, EMC has developed and implemented programs to embed sustainable performance behaviours into the organisation as part of VAGO's underlying culture, through events such as ‘No Paper Cup July’ where the challenge was to take your own sustainable cup when buying coffees instead of using the standard disposable paper cup.

Environmental performance

Below is information on our environmental impacts and performance against our targets. This reporting has been audited and the audit certificate is on page 64.

Energy

Target—by 2013, achieve a:

VAGO consumes energy through the use of office equipment and facilities. VAGO is unable to collect data on the energy our staff members consume at premises of audited agencies.

VAGO switched to 100 per cent green power from 1 July 2010, which has reduced our greenhouse gas emissions. VAGO is also reducing overall energy use through smarter use of technology—such as the installation of more energy efficient servers—and staff education about energy conservation. The overall energy consumption has gone down in 2011–12, largely due to the more energy efficient servers. As such, making further significant reductions in the future will be challenging due to the one off nature of this reduction.

[Figure 30] Energy consumption for 2010–11 and 2011–12

Energy consumption(a)

2011–12

2010–11

Quantity (MJ)

Non Green

0

0

Green

842 767

951 004

Total

842 767

951 004

Measure (MJ)

per FTE

5 183

5 976

per m2

299.9

338.4

Greenhouse gas emissions (tonnes CO2-e) Scope 2

Total

283.3

319.6

Offset

283.3

319.6

Total after Offset

0

0

Greenhouse gas emissions (tonnes CO2-e) Scope 3 – Distribution line loss

Total

35.1

39.6

(a) Includes electricity at VAGO premises (Levels 23 and 24, 35 Collins Street). 100 per cent green power purchased in 2011–12. Added new measure for line loss for purchased electricity for distribution from power stations to VAGO premises, comparative for previous year updated to include this measure.

Waste

Target—by 2013:

VAGO commissioned a waste audit of the office, which was completed in April 2012. The data collected during this audit allows us to benchmark ourselves against total waste production, contamination rates and recycling rates and allows us to compare this data against previous year data and to better plan for the future.

[Figure 31] Waste production for 2010–11 and 2011–12

Waste(a)

2011–12

2010–11

Quantity (kg)

Waste (landfill)

2 065.0

3 128.5

Recycling

7 000.0

11 770.5

Compost

1 052.5

511.5

Measure (kg/FTE)

Waste (landfill)

12.7

20

Recycling

43.1

74

Compost

6.5

3

Greenhouse gas emissions (GHG) (tonnes CO2-e)

Waste to landfill (Scope 3)

2.8

5.2

(a) Includes waste at VAGO premises (ten day audit of waste production). Recycling rate of 79.6 per cent.

Paper

Target—by 2013, establish electronic systems for all internal and external briefings and formal communications.

VAGO is becoming more efficient in its paper use. Although the number of reams used at VAGO has increased by 3.3 per cent in 2011–12, the amount of paper used for printing Parliamentary reports and other publications has decreased 25.2 per cent, resulting in an overall reduction in paper use of 8.4 per cent. In 2012–13, VAGO will be implementing an electronic system to issue our provisional and proposed reports, which will result in a further reduction in our paper use.

VAGO considers all paper used, including Parliamentary report production, before making its final purchasing decisions. As our major Parliamentary output, VAGO makes printed copies of all tabled reports available to every MP.

As part of our report printing, the paper we use has environmental credentials.

During the year VAGO implemented the publishing of VAGO's reports on our website in HTML format as well as PDF which should encourage greater use of the electronic version. As in previous years, all our reports are available electronically.

In 2011–12, we used 80 per cent recycled paper as our standard office stock.

[Figure 32] Paper use in 2010–11 and 2011–12

Paper purchased(a)

2011–12

2010–11

Quantity (reams A4 equivalent)

Copy paper

2 137

2 068

Publications

1 073

1 435

Measure (reams A4 per FTE)

Copy paper

13.1

13.0

Publications

6.6

9.0

Greenhouse gas emissions (tonnes CO2-e) Scope 3

Total (copy paper and publications)

11.5

16.5

(a) Includes paper purchased for printing/copying at VAGO premises and also paper used to print our reports to Parliament and other publications.

Water

Target—by 2013:

VAGO achieved a 4 star green rating with the Green Building Council of Australia for the fit out of our current premises.

[Figure 33] Water consumption for 2010–11 and 2011–12

Water(a)

2011–12

2010–11

Quantity (kL)

643

878

Measure (kL/FTE)

4.0

5.5

Measure (kL/m2)

0.2

0.3

Greenhouse gas emissions (tonnes CO2-e) Scope 3

1.5

2.1

(a) Includes water use at VAGO premises (2010–11 water was measured for part year and extrapolated).

Transport

Target—by 2013:

Our fleet comprises eight executive vehicles. We also use rental cars to travel to premises of audited agencies mainly for non‑metropolitan locations.

VAGO has measured the fuel use of its executive fleet and all hire cars, which was comparable with previous years. VAGO has encouraged, through its vehicle policy (implemented in 2009–10), the use of hybrid hire vehicles and cars with low fuel consumption. Our standard rental car policy has changed from a six-cylinder to a four-cylinder vehicle. The vehicle policy also encourages the use of sustainable travel options and to consider the need for travel where other options, like phone conferences, are available.

[Figure 34] Fuel use, flights and taxi trips taken by VAGO staff

Fuel use(a)

2011–12

2010–11

Quantity (MJ)

VAGO vehicles

280 655

348 368

Hire vehicles

397 599

462 803

Quantity (business related km travelled)

VAGO vehicles

68 913

77 247

Hire vehicles

137 727

150 991

Measure (GHG tonnes CO2-e/1000kms)

VAGO vehicles

0.294

0.325

Hire vehicles

0.208

0.221

GHG (tonnes CO2-e)

VAGO vehicles

Scope 1

18.8

23.3

Scope 3

1.5

1.8

Hire vehicles

Scope 3

28.7

33.4

Quantity

Short

10

24

Medium

44

40

Long

1

1

Quantity (kms travelled)

Short

6 579

21 852

Medium

111 474

96 211

Long

14 838

23 699

Greenhouse gas emission (tonnes CO2-e) Scope 3

Short

2.4

8.5

Medium

24.3

21.3

Long

3.7

6.1

Taxi trips(c)

2011–12

2010–11

Quantity (trips)

826

802

Greenhouse gas emission (tonnes CO2-e) Scope 3

4.5

4.5

(a) Includes both executive fleet vehicles (All VAGO vehicles (eight) are in the six-cylinder sedans and wagons class) and hire vehicles.

(b) Includes all flights (return flights counted as 1 flight) invoiced to and paid for by VAGO. Comparative restated due to improved calculation.

(c) Includes all taxi trips invoiced to and paid for by VAGO. Comparative restated due to improved calculation.

Greenhouse gas emissions

Target—to lead by example by reducing greenhouse gas emissions from travel and other business activities.

The emissions listed in the previous tables measure our combined use of energy, waste, paper, water, fuel, flights, and taxi trips. Figure 35 shows our use of fridges. As shown in the second part of Figure 35, these measures allow us to calculate VAGO’s footprint.

[Figure 35] Greenhouse gas emissions for 2010–11 and 2011–12

Fridges(a)

2011–12

2010–11

Number of fridges

6

6

Greenhouse gas emission (tonnes CO2-e) Scope 1

0.03

0.03

Total greenhouse gas emissions (of above measures)(b)

2011–12

2010–11

Quantity (tonnes CO2-e)

Scope 1

18.8

23.4

Scope 2

0

0

Scope 3

116

139.0

Total

134.8

162.4

Quantity (tonnes CO2-e/FTE)

Total

0.8

1.0

(a) Number of fridges at VAGO premises (GHG measured as global warming potential of hydrofluorocarbons in the fridges). The comparative figure has been updated due to change in calculation from previous year.

(b) Addition of the above measurements (if measured—energy, waste, paper, water, fuel, flights, taxi trips, fridges), rounded to one decimal place. FTE calculated at year end, 2011–12: 162.6 (2010–11: 159.1). The FTE figure of 159.1 used in the 2010–11 disclosures excludes casual staff. The comparative figures have been updated to include a new measure and to adjust for a change in calculation from the previous year.

Procurement

Target—by 2013, integrate environmental specifications into all contracts, tenders and purchasing templates to reduce impacts through purchasing decisions.

As servers have required replacement, VAGO has been procuring more efficient servers which have had the impact of reducing VAGO's energy consumption (by 11.4 per cent from 2010–11).

VAGO's main area of procurement is audit service providers and contractors (32 per cent of total expenses from transactions). VAGO spent 52 per cent of total expenses from transactions on employee expenses; the remaining 16 per cent is spent mainly on goods and services.

VAGO is examining its procurement process to identify areas in which it can modify contracts, tenders and purchasing templates to incorporate environmental specifications.

Audit certificate

Audit Certificate
[ Contents of this report | VAGO Home | VAGO Publications ]

Financial management

In this chapter we provide information on the management of our budget for the year, our financial performance, financial position, and our audited financial statements.

Financial performance

Our net financial result for the year was a surplus of $578 173 (compared with a surplus of $515 847 in 2010–11).

Figure 36 shows the movement in both actual revenues and expenses.

[Figure 36] Revenues and expenses, 2011–12 and previous four years

Item

2011–12 ($’000)

2010–11 ($’000)

2009–10 ($’000)

2008–09 ($’000)

2007–08 ($’000)

Revenue

General appropriation

13 959

13 612

13 433

11 696

12 182

Section 32 carry forward

200

360

338

Section 29

22 547

21 899

20 829

19 317

17 910

Special appropriation

456

447

445

410

431

Other

158

332

643

222

353

Total revenue

37 120

36 490

35 710

31 645

31 214

Total expenses

36 542

35 974

34 928

33 186

33 296

Surplus/(deficit)

578

516

782

(1 541)

(2 082)

Revenue

[Figure 37] Source of VAGO funding over the past five years

Source of VAGO funding over the past five years

VAGO is funded through Parliamentary appropriations and Financial Management Act 1994 section 29 revenue.

Revenue increased in 2011–12 mainly due to general price increases. This was offset by lower revenue recovery from staff secondment to other offices, and a carry-over of appropriation of $344 000 into 2012–13 following a deferral of equivalent project expenses.

Expenses

VAGO spends most of its budget on employees, contract audit services, accommodation, and supplies and services.

[Figure 38] Expenses from ordinary activities for 2011–12 and previous four years

Item

2011–12 ($’000)

2010–11 ($’000)

2009–10 ($’000)

2008–09 ($’000)

2007–08 ($’000)

Expenses

Depreciation and amortisation

732

764

801

928

1 028

Employee expenses

18 917

18 862

17 946

15 829

15 892

Contract audits services

11 531

11 558

10 859

11 220

10 213

Rental expenses – accommodation

1 477

1 475

1 454

1 437

1 425

Supplies and services

3 317

3 060

3 580

3 297

3 788

Other operating expenses

568

255

288

475

950

Total expenses

36 542

35 974

34 928

33 186

33 296

Expenditure in 2011–12 increased mainly as a result of general price increases, higher use of contract audit service providers for attest audits, and higher revaluation of long service leave (following a reduction in the discount rate) across staff delivering both attest and performance audits. This was offset by lower costs for contract audit providers and employees in delivering performance audits.

[Figure 39] Expenses, 2011–12 and four previous years

Expenses, 2011-12 and four previous years

Output results

The financial results for our two output groups were:

[Figure 40] Total revenues and expenses attributed to outputs for 2011–12

2011–12

2010–11

Output group

Revenue ($’000)

Expenses ($’000)

Net result ($’000)

Revenue ($’000)

Expenses ($’000)

Net result ($’000)

1.

Parliamentary reports and services

14 293

13 719

574

14 267

14 728

(461)

2.

Audit reports on financial statements

22 827

22 823

4

22 223

21 246

977

Total

37 120

36 542

578

36 490

35 974

516

Financial position

Our financial position at 30 June 2012 remained strong, with total assets of $13.4 million, total liabilities of $6.8 million and net assets of $6.7 million.

[Figure 41] Asset and liability movement over five years

Item

2011–12 ($’000)

2010–11 ($’000)

2009–10 ($’000)

2008–09 ($’000)

2007–08 ($’000)

Financial assets

10 755

9 734

8 361

7 933

7 980

Non-financial assets

2 690

2 978

2 991

2 924

3 312

Total assets

13 445

12 712

11 352

10 857

11 292

Total liabilities

6 787

6 631

5 787

6 069

4 596

Net assets

6 658

6 081

5 565

4 788

6 336

Other financial matters

Financial report

Pursuant to Standing Direction 4.2 of the Financial Management Act 1994, the financial statements of government departments must be presented fairly and in accordance with the requirements in the model financial report. The annual report of the Victorian Auditor‑General’s Office complies with this requirement.

Consultancies

In 2011–12, we engaged three consultancies where the total fees payable to the consultants were greater than $10 000 but less than $100 000. Details of these consultancies are outlined in the table opposite. We engaged 12 consultancies where the total fees payable to the consultants were less than $10 000, with a total expenditure of $56 355 (excluding GST).There were no payments to consultants in excess of $100 000.

[Figure 42] Details of individual consultancies

Consultant

Purpose of consultancy

Start date

End date

Total approved project fee (excluding GST)

Expenditure

2011–12 (excluding GST)

Future expenditure (excluding GST)

Audit Office of New South Wales

Australasian Council of Auditors‑General macrobenchmarking survey

15 August 2011

28 October 2011

$10 380

$10 380

Phoenix Consulting

Post‑implementation review of human resources information system

18 June 2012

7 August 2012

$22 273

$22 273

Sinclair Knight Merz Pty Ltd

Review of performance development plans and business plans

17 January 2012

29 February 2012

$11 700

$11 700

Performance audit contractors

In 2011–12, we paid $0.8 million ($1.4 million in 2010–11) to 19 contractors for services related to our performance audits.

[Figure 43] Payments to performance audit contractors, 2011–12

Performance audit contractor

2011–12 ($’000)

2010–11 ($’000)

Auctionomics Inc

0

166

Collison Fogarty Laws P/L

64

11

E W Russell & Associates Pty Ltd

137

18

Eastern Health

45

0

Ernst & Young

218

170

Gardner Group Pty Ltd

72

13

Gartner Australasia Pty Ltd

29

40

J H Resources Pty Ltd

68

0

O’Connor Marsden & Associates Pty Ltd

0

49

Paul Edney

37

18

P G Rorke

32

0

Pivotal Point Consulting Services

0

95

Roberts Evaluation Pty Ltd

0

90

Stuart McLennan

6

30

The Allen Consulting Group

0

122

The Kiwipower Group

55

0

University of Melbourne

0

148

Other – 8 service providers (23 in 2010–11)

11

394

Total

774

1 364

Attest audit service providers

In 2011–12, we paid $10.8 million ($10.2 million in 2010–11) to 26 audit firms that provided services related to our attest statement audits.

[Figure 44] Payments to attest audit service providers, 2011–12

Attest audit service provider

2011–12 ($’000)

2010–11 ($’000)

Accounting and Auditing Solutions

39

33

Coffey Hunt & Co

522

513

Crowe Horwath Melbourne (previously WHK Horwath)

1 143

1 096

Davidsons

10

45

Deloitte Touche Tohmatsu

697

722

DFK Colins

163

369

Dixons & Associates Pty ltd

113

32

Ernst & Young

1 230

1 035

HLB Mann Judd (Vic) Pty Ltd

1 983

1 905

Johnsons MME

269

243

KPMG

305

342

LD Assurance

267

137

Mclean Delmo Hall Chadwick

288

307

Mulqueen Griffin Rogers P/L

126

94

Pannell Kerr Forster

16

31

Richmond Sinnott & Delahunty

803

709

RMA Specialists

60

85

RSM Bird Cameron

1 244

1 129

UHY Haines Norton (Vic) Pty Ltd

595

478

University of Melbourne

84

75

WHK Audit (Vic) (previously WHK Armitage Downie Pty Ltd)

554

495

WHK Audit & Risk Assessment (previously KPMG Albury)

162

254

Other – 4 service providers (4 in 2010–11)

84

65

Total

10 757

10 194

Financial report

Contents

Declaration

Declaration

Independent auditor’s report

Independent auditor’s report

Comprehensive operating statement

Balance sheet

Statement of changes in equity

Cash flow statement

Notes to the financial statements

[ Contents of this report | VAGO Home | VAGO Publications ]

Appendix 1: Audit reports to Parliament

Date report was tabled

VAGO report number

Report title

Pages

17 August 2011

2011–12:1

Biotechnology in Victoria: the Public Sector's Investment

84

17 August 2011

2011–12:2

Developing Cycling as a Safe and Appealing Mode of Transport

52

31 August 2011

2011–12:3

Road Safety Camera Program

88

14 September 2011

2011–12:4

Business Planning for Major Capital Works and Recurrent Services in Local Government

48

14 September 2011

2011–12:5

Individualised Funding for Disability Services

52

12 October 2011

2011–12:6

Supporting Changes in Farming Practices: Sustainable Irrigation

52

12 October 2011

2011–12:7

Maternity Services: Capacity

60

26 October 2011

2011–12:8

Procurement Practices in the Health Sector

56

26 October 2011

2011–12:9

TAFE Governance

68

9 November 2011

2011–12:10

Auditor General’s Report on the Annual Financial Report of the State of Victoria, 2010–11

84

9 November 2011

2011–12:11

Public Hospitals: Results of the 2010–11 Audits

108

9 November 2011

2011–12:12

Water Entities: Results of the 2010–11 Audits

164

23 November 2011

2011–12:13

Portfolio Departments and Associated Entities: Results of the 2010–11 Audits

96

23 November 2011

2011–12:14

Local Government: Results of the 2010–11 Audits

164

7 December 2011

2011–12:15

Victorian Institute of Teaching

48

7 December 2011

2011–12:16

Managing Contaminated Sites

80

7 December 2011

2011–12:17

Compliance with Building Permits

92

7 December 2011

2011–12:18

Management of Road Bridges

52

8 February 2012

2011–12:19

State Trustees Limited: Management of represented persons

40

29 February 2012

2011–12:20

Public Transport Performance

48

29 February 2012

2011–12:21

Government Advertising and Communications

72

14 March 2012

2011–12:22

Agricultural Food Safety

48

14 March 2012

2011–12:23

Melbourne Markets Redevelopment

68

28 March 2012

2011–12:24

Access to Public Housing

48

18 April 2012

2011–12:25

Freedom of Information

112

18 April 2012

2011–12:26

Casual Relief Teacher Arrangements

44

18 April 2012

2011–12:27

Performance Reporting by Local Government

88

2 May 2012

2011–12:28

Personal Expense Reimbursement, Travel Expenses and Corporate Credit Cards

64

23 May 2012

2011–12:29

Payments to Visiting Medical Officers in Rural and Regional Hospitals

40

23 May 2012

2011–12:30

Tertiary Education and Other Entities: Results of the 2011 Audits

116

23 May 2012

2011–12:31

Management of Trust Funds in the Justice Portfolio

60

6 June 2012

2011–12:32

Fraud Prevention Strategies in Local Government

52

6 June 2012

2011–12:33

Science and Mathematics Participation Rates and Initiatives

60

20 June 2012

2011–12:34

Effectiveness of Justice Strategies in Preventing and Reducing Alcohol‑Related Harm

100

20 June 2012

2011–12:35

Obsolescence of Frontline ICT: Police and Schools

52

[ Contents of this report | VAGO Home | VAGO Publications ]

Appendix 2: External engagements

Delegations, placements and secondments in 2011–12

Dates

Purpose, interest or theme of visit

Delegations

Beijing Municipal Audit Bureau

14–15 August

Performance audit

Department of Audit, Guizhou Provincial Government

17 August

Performance audit

Political and Legislative Affairs Committee of the Communist Party of China

25 August

Performance audit and auditing service delivery by third parties

Indonesian Board of Finance and Development Control

21 September

Financial and performance audit, internal controls, risk management and fraud controls

New Zealand Office of the Auditor-General

23–24 May

Audit planning, evidence collection and reporting to Parliament

Placements and secondments

Placement of fellows through the Asia Pacific Economic Cooperation from Brazil, India and Thailand

11–15 July

Australian Leadership Awards Fellowship Program – focus on public-private partnerships in infrastructure development

Two placements from Indonesian Department of Finance

31 October – 18 November

Performance audit

Secondment to Hong Kong Audit Office

1 February – 30 April

VAGO Financial Auditor seconded to Hong Kong – knowledge transfer and professional development

Secondment from Hong Kong Audit Commission

1 February – 30 April

Hong Kong Performance Auditor seconded to VAGO – knowledge transfer and professional development

Secondment to British Columbia Office of the Auditor-General

24 June – 22 August

VAGO Performance Audit Director seconded to BC – knowledge transfer and professional development

Secondment from British Columbia Office of the Auditor-General

1 June 2011 – 30 May

BC Financial Auditor seconded to VAGO – knowledge transfer and professional development

Secondment from British Columbia Office of the Auditor-General

6 February – 7 December

BC Financial Auditor seconded to VAGO – knowledge transfer and professional development

Student internship from Institut d’Etudes Politiques de Rennes, France

18 July – 18 January

Policy coordination and performance auditing

Presentations by the Auditor-General in 2011–12

Date

Presentation to

Topic

11 August 2011

Chartered Secretaries Australia –Governance Luncheon

Lessons from audits: Key themes from VAGO's 2010–11 audit program

12 September 2011

Monash University – Governance course

Parliament's Auditor: Role and Perspectives

7 October 2011

Australasian Study of Parliament Group National Conference

Trends in public sector audit legislation: from Federation to follow-the-dollar

7 October 2011

Australia and New Zealand School of Government – Public Sector Financial Management course

Auditing in the Public Interest

25 October 2011

State Coordination and Management Council

Lessons from audits: Key themes from VAGO's 2010–11 audit program

28 October 2011

KPMG Public Sector Audit Committee Series Luncheon

Parliament's Auditor – Roles and Perspectives

4 November 2011

Australian Asset Management Collaborative Group Forum

Managing Infrastructure Assets, one year on – lessons learnt

8 December 2011

Institute of Public Administration Australia – How Government Works

Parliament’s Auditor – Roles and Perspectives

17 November 2011

Australian Public Sector Anti‑Corruption Conference

Outsourcing work, 'insourcing' corruption – Perspectives from Auditors General

28 November 2011

Department of Primary Industries Executive Team

Lessons from audits: Key themes from VAGO's 2010–11 audit program

30 November 2011

L21 Leaders in the Public Sector Conference

Lessons from audits: an evidence-based approach for improving responsiveness in our public service

8 December 2011

Ernst & Young’s VAGO Account Team

Lessons from audits: Key themes from VAGO's audit program

6 February 2012

Commonwealth Parliamentary Association's Summer Residency for Public Accounts Committees

The Public Accounts Committee/Auditor-General relationship: the Victorian model

9 February 2012

Commonwealth Parliamentary Association's Summer Residency for Public Accounts Committees

Reporting Audit Results to Parliament

13 February 2012

La Trobe University Council meeting

Lessons from audits: Key themes from VAGO's 2010–11 program

14 February 2012

Department of Justice – Strategic Policy and Legislation Division

Improving accountability and performance in the public sector

16 February 2012

Committee for Economic Development of Australia

Public Sector Accountability: Impacts for Government and Public Service Providers

27 February 2012

Victorian Public Sector Young Leaders Conference

Building resilience and embracing challenges

2 March 2012

University of Melbourne – Centre for Public Policy

'Governance hotspots' in the Victorian public service

20 April 2012

Local Government Professionals: CEO Forum

Improving accountability and performance in the local government sector

1 May 2012

Institute of Public Administration Australia – How Government Works

Parliament's Auditor: Role and Perspectives

29 May 2012

Public Record Office Victoria – Record Managers Forum

Record Keeping, Freedom of Information, and VAGO investigations

30 June 2012

Accounting and Finance Association of Australia and New Zealand – Public Sector and Not-for-Profit Accounting Special Interest Group

Changing service delivery modes – Implications for public sector audit

[ Contents of this report | VAGO Home | VAGO Publications ]

Appendix 3: Extract of whole-of-government financial statements – non-audited

Appendix 3: Extract of whole-of-government financial statements – non-audited
[ Contents of this report | VAGO Home | VAGO Publications ]

Appendix 4: Disclosure index

VAGO’s annual report is prepared in accordance with all relevant Victorian legislation and pronouncements. This index has been prepared to facilitate identification of VAGO’s compliance with statutory disclosure requirements.

Legislation

Requirement

Page reference

Ministerial directions

Report of operations – FRD guidance

Charter and purpose

FRD 22C

Manner of establishment and the relevant minister

1

FRD 22C

Objectives, functions, powers and duties

Inside cover, 1

FRD 22C

Nature and range of services provided

1

Management and structure

FRD 22C

Organisational structure

46

Financial and other information

FRD 8B

Budget portfolio outcomes

117

FRD 10

Disclosure index

118–119

FRD 15B

Executive officer disclosures

55–56

FRD 22C, SD 4.2(k)

Operational and budgetary objectives and performance against objectives

9–28

FRD 22C

Employment and conduct principles

56–57

FRD 22C

Occupational health and safety policy

58–59

FRD 22C

Summary of the financial results for the year

66–68

FRD 22C

Significant changes in financial position during the year

68

FRD 22C

Major changes or factors affecting performance

66–68

FRD 22C

Subsequent events

109

FRD 22C

Application and operation of Freedom of Information Act 1982

51

FRD 22C

Compliance with building and maintenance provisions of Building Act 1993

52

FRD 22C

Statement on National Competition Policy

51

FRD 22C

Application and operation of the Whistleblowers Protection Act 2001

51

FRD 22C

Details of consultancies over $10 000

68–69

FRD 22C

Details of consultancies under $10 000

68

FRD 22C

Statement of availability of other information

120

FRD 24C

Reporting of office-based environmental impacts

60–64

FRD 25A

Victorian Industry Participation Policy disclosures

52

FRD 29

Workforce data disclosures – Public Sector Employees

52–56

SD 4.5.5

Risk management compliance attestation

50

SD 4.2(g)

General information requirements

9–70

SD 4.2(j)

Sign­off requirements

Inside cover

Financial report

Financial statements required under Part 7 of the Financial Management Act 1994

SD4.2(b)

Comprehensive operating statement

74

SD4.2(b)

Balance sheet

75

SD4.2(b)

Statement of changes in equity

76

SD4.2(b)

Cash flow statement

77

Other requirements under Standing Directions 4.2

SD4.2(a)

Statement of compliance

78

SD4.2(c)

Compliance with Australian accounting standards and other authoritative pronouncements

72

SD4.2(c)

Compliance with Ministerial Directions

72

SD4.2(d)

Rounding of amounts

80

SD4.2(c)

Accountable officer’s and chief finance and accounting officer’s declaration

72

SD4.2(f)

Compliance with Model Financial Report

68

Other disclosures as required by FRDs in notes to the financial statements

FRD 9A

Disclosure of administered assets and liabilities

89

FRD 13

Disclosure of Parliamentary appropriations

106–107

FRD 21B

Responsible person and executive officer disclosures

107–108

FRD 103D

Non-current physical assets

93–94

FRD 106

Impairment of assets

82–83

FRD 109

Intangible assets

95

FRD 110

Cash flow statements

77

FRD 112C

Defined benefit superannuation obligations

81, 98

FRD 114A

Financial Instruments – General Government Entities and public non‑financial corporations

82, 101–104

FRD 119

Contributions by owners

86

FRD 120F

Accounting and reporting pronouncements applicable to the 2011–12 reporting period

86

FRDs applicable to VAGO with no disclosures to make in 2011–12

FRD 11

Disclosure of ex-gratia payments

FRD 12A

Disclosure of major contracts

Legislation

Financial Management Act 1994

78

Audit Act 1994

1

Freedom of Information Act 1982

51

Building Act 1993

52

Whistleblowers Protection Act 2001

51

Victorian Industry Participation Policy Act 2003

52

Information Privacy Act 2000

51


[ Contents of this report | VAGO Home | VAGO Publications ]

Appendix 5: Additional information available

This report and the VAGO website publish all of the required information in compliance with the ministerial directions of the Minister for Finance. Further details in respect of the information items below have been retained by VAGO and are available if requested (subject to the Freedom of Information requirements, if applicable):

In respect of the following areas there were no relevant activities undertaken by VAGO:

The following information is available from VAGO’s website:

www.audit.vic.gov.au

[ Contents of this report | VAGO Home | VAGO Publications ]