This report informs Parliament about the results of the audit of the Annual Financial Report of the State of Victoria for 2011–12 (the AFR). The Auditor-General issued a clear audit opinion on the AFR on 5 October 2012, thereby providing reasonable assurance that the information in the financial report is reliable, accurate, and prepared in accordance with the requirements of the Financial Management Act 1994 and Australian accounting standards and interpretations.

A deficit of $15 961.9 million was reported for the state for 2011–12, continuing a trend of deficits in all but one of the past five financial years. The deficit was largely driven by growth in the state’s unfunded superannuation liability, and the continuing trend of expenses growing faster than revenue.

This report also makes comment on the progress, in terms of time and cost, of a sample of high-value high-risk projects, projects being delivered as public private partnerships and projects of significant financial risk to the state. Comments are provided for major projects in the health, water and transport sectors. Generally, most major asset projects being delivered on behalf of the state are progressing well against budgets and time frames.