Annual Report 2017–18

Tabled: 20 September 2018

6 Our internal operations: Leading the public sector

Benchmarking by ACAG in 2016–17 showed that we spent 24 per cent of our total office expenditure on corporate support functions, which was around 8 per cent more than the state and territory average.

This was a strong driver for reducing our corporate costs, so that Victorians get better value for money from our work.

Our efforts to reduce costs resulted in our corporate support spend decreasing significantly to just 17 per cent this year, now just 4 per cent behind this year's state and territory average.

One of our new strategic objectives is to lead the public sector by example, and a key part of that is making VAGO an exemplary audit office. We are in the process of modernising several aspects of our work.

There are many processes we have used for a long time without critically assessing whether they are the best way of doing things. To become more efficient we have reviewed our practices and are improving our systems to make things easier for auditors and our other staff. We are eliminating unnecessary processes and purchases.

Our core work is auditing, but we have always spent a large portion of our time and effort on supporting corporate activities. We are trying to refocus our resources on audit work and creating value through our activities.

We are in transition and are striving to be innovative—this is one of our new values. We hope to become an organisation that can truly challenge the status quo and deliver a better service by doing things differently.

This year, we have taken many steps toward making VAGO a modern and responsive audit office. This section details some of our improvement projects.

6.1 Key developments

This year, we have commenced reviewing and improving our internal controls framework across the 'three lines of defence'. This has involved establishing our new governance forums, revising our risk management approach, and updating our fraud and corruption policy framework in line with the findings of our performance audit Fraud and Corruption Control, tabled in March 2018.

Cost savings

Several of our improvement projects this year have been aimed at reducing our costs, including:

  • various ICT projects
  • the business process simplification project
  • the records management Melbourne to Mornington project.

Through these and other projects VAGO has saved over $183 000 this year, and redirected that money to performing audit work improving our technology and increasing our analytics capability.

Throughout the year, we have implemented a number of information and communications technology (ICT) changes:

  • We have begun 24/7 monitoring of our network and security.
  • Staff received new Surface Book 2 laptops.
  • We implemented mandatory multi-factor authentication for all staff.
  • We updated the resilience of our network.
  • We started migrating core services to the Cloud—we plan to have no server infrastructure on our premises by the end of 2019.

VAGO takes information and data security very seriously. We manage the risks associated with holding confidential information, and we accept the responsibilities we have to individuals to protect privacy, in accordance with the Privacy and Data Protection Act 2014. In 2017–18, we improved our security arrangements across the information, ICT, personnel and physical domains to ensure that we exceed the Act's minimum requirements and protect the information we hold.

By applying our data analytics capability to our own work, we are developing a business intelligence dashboard that gives us simple and timely access to performance and management information. The dashboard will readily show, in real time, how efficiently and effectively we are using our resources and over time will steadily be built up to cover a range of productivity and performance measures. We believe that this better business intelligence will drive better decision making.

ACAG benchmarking data shows that our financial audit staff spend 67 per cent of their available time directly on financial audits and our performance audit staff spend 70 per cent of their available time directly on performance audits.

This year, we eliminated unnecessary internal red tape. We streamlined and automated some core administrative business processes to save money and empower staff who previously had to go through needless approval processes. This project was partly driven by staff survey results which highlighted too much bureaucracy and red tape as an issue. Part of the project looked at staff travel, including car hire and taxi use. The other part reviewed our process for publishing financial audit opinions and was conducted in collaboration with our records management team. Information management is an area where VAGO is providing an example to the public sector. Two of our projects were recognised this year at the prestigious Rupert Hamer Records Management Awards.

Figure 6A
From Melbourne to Mornington: The end of the paper trail and the start of the digital journey

Every year we issue a financial audit opinion letter to six individuals for each of the 550 public sector entities that we audit. This meant sending 3 300 separate letters by post, a process which took over 100 hours and used approximately 233 000 pieces of A4 paper. If laid end to end, these would reach from our office in the CBD to Mornington.

We digitised this whole process, which produced a number of benefits:

  • The process now takes under 22 hours.
  • We are saving $12 500 annually that was being spent on paper, printing and postage.
  • A secure electronic record of the audit opinion transaction is captured into compliant business information systems.
  • 70 kms of paper is no longer being used.

This project also challenged the perception, often held by other public sector agencies, that auditors want to see paper copies of documents. This was a pilot project, and we have continued digitising our other paper-based processes.

Figure 6B
The digital destination: Paving the way using VERS3

In 2015, the Public Record Office Victoria (PROV) released the Victorian Electronic Records Standard version 3 (VERS3). However, the process of creating and transferring a record as a VERS3 encapsulated object (VEO) had never been tested and executed by an agency.

We undertook a project to transfer our key permanent records, our audit reports, to PROV as VEOs. This was the first transfer of its kind in Victoria. We worked collaboratively with PROV to test processes, tools and guidance material. The project was very successful, with the transfer being executed ahead of time and the VEO creation and transfer meeting all quality standards.

The project had several benefits:

  • All of our tabled audit reports from 1956 to 2017 are now forever accessible to the public.
  • The process for creating VEOs was streamlined and is now more time and resource efficient for agencies.
  • PROV has a much clearer understanding of the challenges agencies face in the electronic transfer process.

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