Management of Trust Funds in the Justice Portfolio

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Tabled: 23 May 2012

The Victorian Property Fund, administered by Consumer Affairs Victoria, and the Public Purpose Fund, administered by the Legal Services Board, are two of the largest trust funds in the Justice portfolio.

Both funds are well administered and support the purposes for which they were established. Agencies, such as Consumer Affairs Victoria and the Legal Services Board, carry high prudential obligations as a consequence of the significant sums of public and private money under their management. A clear policy and legislative framework is required to guide the management of these investments. However, the framework for managing public sector investment is fragmented and inconsistent.

The audit found that the Department of Treasury and Finance has not achieved comprehensive compliance with the Centralised Treasury and Investment Policy and is not achieving the policy’s objectives of efficient, low-risk investment across the public sector. Consumer Affairs Victoria’s proposed agreement with Victorian Funds Management Corporation (VFMC) will not maximise the use of VFMC's expertise for the investment of the Victorian Property Fund. The Legal Services Board was non-compliant with the policy until it was amended in February 2011.

The audit also found that Consumer Affairs Victoria and the Department of Treasury and Finance do not have a clear plan for managing the large, increasing surplus held in the Victorian Property Fund. The fund has more than doubled over the past decade and now amounts to $196 million in excess of what is required to meet its purposes.

 

 

 

 

 

 

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