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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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