Annual Report 2018–19

Tabled: 29 August 2019

3 Growing our influence

 

Our objectives

Our directions What success looks like

GrowOurInfluence.PNG

 

Be valued for our independence and more influential because of the unique perspectives we provide

Strengthen our engagement

Better leverage our access

Increase accessibility to our work

More of our performance audits originate from requests from parliament, the public sector and the public

Use of our reports and associated datasets in government service delivery and for parliamentary purposes has increased

To increase our influence, and ultimately the impact of our work, we rely on our relationships and our products.

To strengthen our relationships and provide credible advice, we need to have a good understanding of developments in the public sector and a meaningful dialogue with our stakeholders. We are constantly engaging with public sector agencies through our audit work, and we also foster strong cooperative relationships at the senior management level. This year we have worked on strengthening our relationships with parliamentarians and audit committee chairs. We have also spent more time with peak bodies and chief financial officers across all sectors.

VAGO has access to all administrative and financial datasets across all state and local government entities. This unique and privileged position creates a significant obligation for us to maximise the value we can create from this access. This year we have continued our focus on data sharing and have created several valuable dashboards for agencies and the public.

We are also continually trying to improve our reports and other products, and accessibility to them, so that the unique perspectives we provide can be turned into meaningful action. Several of our audits have made a significant impact this year.

3.1 Engaging with our stakeholders

Our primary stakeholders are the Victorian parliament and the public sector agencies we audit. This year, in time with the formation of the 59th parliament, we turned our attention to strengthening our engagement with parliamentarians. We created a webpage for new parliamentarians to inform them about our role, our processes and our services. We also sent information to all new and returning parliamentarians about the role of the Auditor-General, any upcoming audits that would be of interest, and how they could engage with VAGO. parliamentarians have been taking the opportunity to meet with the Auditor-General to discuss audit and accountability issues and make suggestions for audit topics.

We also focused on our relationships with audit committee chairs this year and hosted a forum in early June. We invited the audit committee chairs of all Victorian public sector agencies and organisations and 125 attended. The aim of the day was to share insights and advice on how agencies can improve their own internal audit practices and ensure good governance and accountability in their organisations.

The Auditor-General and senior VAGO executives presented on the strategic risks and challenges we have observed, our coverage of these through our audit program, and how digital disruption and data analytics will affect the way public sector agencies operate in the future.

Feedback from the forum made it clear that audit committee chairs across the state value the opportunity to network with their peers about common challenges in overseeing governance and auditing functions in their organisations. They found the insights provided by the Auditor-General and VAGO staff valuable.

One key benefit of having strong relationships with the agencies we audit is that we can use these relationships to extend the influence and impact of our reports. Throughout the year, VAGO staff present on our audit findings directly to those who can affect the most change, as the following examples demonstrate.

Our audit into the Security and Privacy of Surveillance Technologies in Public Places tabled in September. In November we presented about this audit to the Victorian Privacy Network. The forum was attended by about 200 privacy practitioners across the public and private sectors and the presentation was streamed live on the web.

In August we tabled our report on Managing Rehabilitation Services in Youth Detention. VAGO staff presented on this audit at the Prisons 2019 conference held in Brisbane in July 2019.

We also engage with public sector agencies on broader integrity issues. In May, we presented at a regional integrity event in Horsham, organised by the Independent Broad-based Anti corruption Commission.

3.2 Feedback from our stakeholders

We survey parliamentarians every year to understand how well we are serving them. The survey told us that parliamentarians appreciate our independent position but would like our products to be more accessible and have a more digestible format. In response we are exploring new ways of presenting our audit findings while maintaining the evidentiary standards of our reporting.

Our overall satisfaction rating dropped, which we anticipated as the same thing happened after the previous election. A third of our survey respondents this year were new parliamentarians who are still learning about our work and how they can make use of our reports. We know this because we received a high number of neutral responses for many of our questions.

Our reports and services help improve public sector administration.

74.1% overall

(20.9% neutral)

new parliamentarians 67.6%

returning parliamentarians 77.0%
 

Our reports and services assist parliamentarians with their role.

74.0% overall

(24.1% neutral)

new parliamentarians 55.3%

returning parliamentarians 81.9 %
 

We provide valuable information on public sector performance.

83.1% overall

(12.2% neutral)

new parliamentarians 70.5%

returning parliamentarians 88.8%
 

The difference between new and returning parliamentarians' perceptions of our value varies greatly, up to 26.6 percentage points. We expect our survey results will improve again over time as new parliamentarians come to use and understand our products more. We will also continue focusing on our products and communication channels with them to try and make our services more relevant, accessible and useful.

We also survey the agencies involved in our performance audits about our process, reporting and value. We aim for our average score across the year to be at least 75 per cent on each of these measures. These are our interim 2018–19 results, as surveys for the audits that tabled between March and June have yet to be completed. Each area has improved since 2017–18, with the average overall score increasing from 74.9 per cent to 78.0 per cent.

Process

78.9%
 

Reporting

79.8%
 

Value

75.9%

Overall

78.0%

Our financial audit survey this year showed some very positive results. As with our performance audits surveys, we ask chief financial officers about our process, reporting and value. Here are some highlights of our interim 2018–19 results.

Process

96% believed our auditors conducted themselves professionally during the audit

93% believed our auditors had the right professional skills and knowledge

89% believed that our auditors were responsive to their needs and communicated with them effectively

Reporting

100% believed that our management letters were issued in a timely manner, an improvement of 13% on 2017–18

96% believed audit opinions were issued in a timely manner, an improvement of 10% on 2017–18

96% believed our management letters communicated the audit findings and issues clearly

92% believed our management letters were balanced and fair

Value

93% believed that our recommendations improve the financial management and internal controls of their organisation

89% valued the assurance obtained from our audit

3.3 Where our audit topics come from

As discussed in Section 2.2, we consult the agencies we audit to develop our annual plan of audit topics, and this year we have used our new annual planning dashboards to gather information and choose the most worthwhile topics. However, we also want to ensure that we are reflecting issues of concern to parliamentarians and the public, so we aim to increase the number of our audits that originate from these sources.

Work is being undertaken this year to establish a baseline of how many of our audit topics come from parliamentarians, the public sector and the public. Our annual planning process now gathers information on where topics have come from.

In 2018–19 we received 141 requests and comments from the public and elected officials:

  • 131 from members of the public
  • four from state parliamentarians
  • six from local councillors.

Some of the reports we tabled this year cover topics raised in these requests, including Fraud and Corruption Control—Local Government and Outcomes of Investing in Regional Victoria.

Some of our planned audits are related to issues that have been raised by parliamentarians:

  • Freight outcomes from regional rail upgrades
  • Reducing the harm caused by alcohol and drugs on Victorian roads
  • Safety on Victoria's roads—regional road barriers.

Some of our planned audits are also related to topics raised with us by the public since 2017:

  • Conserving threatened species
  • Council waste management services
  • Managing and enforcing infringements
  • Planning and management of metropolitan bus services
  • Reducing bushfire risks
  • Rolling stock fleet sustainability
  • Safety on Victoria's roads—regional road barriers
  • Use of contractors and consultants in the Victorian public sector.

3.4 Leveraging our access to data

Another way we are increasing our influence is through our datasets and interactive dashboards. We are making the most of our access to data by providing the agencies we audit with valuable datasets. For two of our performance audits this year, Contract Management Capability in DHHS: Service Agreements and State Purchase Contacts, we provided our datasets to the audited agencies, enabling them to use our analysis to improve their delivery of government services.

We also publish dashboards on our website that everyone can access. This is a key way to increase the accessibility of our work because these datasets allow people to use the information in a way that is valuable to them. While we have included similar information in our reports in the past, the dashboards allow people to manipulate and filter the data, which makes this information much more useful to individuals.

This year we published two dashboards on our website related to performance audits and eight related to financial audits. Our five most used dashboards are listed below.

1

Our dashboard for Reporting on Local Government Performance enables councils and the public to compare the performance of all 79 Victorian councils across the nine service areas reported in the Local Government Performance Reporting Framework.

2

Our dashboard for Outcomes of Investing in Regional Victoria provides information about the distribution of Regional Development Victoria's grants to each regional local government area. It also provides a snapshot of economic and social indicators for those areas.

3

Our metropolitan hospitals dashboard was published as part of the Auditor-General's Report on the Annual Financial Report of the State of Victoria: 2017–18. We are refining our dashboard content each year, and adding to the existing data, making it possible to track and compare financial performance over time.

4

Our regional hospitals dashboard, published with the Auditor‑General's Report on the Annual Financial Report of the State of Victoria: 2017–18, was also popular.

5

We published our data on the performance of local councils this year for the first time with our financial audit Results of 2017–18 Audits: Local Government.

3.5 Our impact in 2018–19

Our performance audits continued to make an impact this year. Some of these audits are recent and others are continuing to be relevant and useful years after their publication.

 
 

Note: An accessible version of this infographic is at the bottom of this Part.

Another way our audits make an impact is their use by parliamentary committees. Several committees referred to our reports this year.

The Public Accounts and Estimates Committee's (PAEC) Report on the 2018–19 Budget Estimates made a recommendation that the Department of Treasury and Finance introduce new measures in the budget papers that increase the transparency of the performance of private prisons, and measure the impact of initiatives to reduce unmet demand for child protection services. This is directly in line with recommendations from our reports Safety and Cost Effectiveness of Private Prisons and Maintaining the Mental Health of Child Protection Practitioners.

PAEC recommended that the former Department of Economic Development, Jobs, Transport and Resources include additional performance measures in the budget papers to assist parliament to scrutinise Public Transport Victoria's related performance with myki, as identified in our report Follow Up of Selected 2014–15 Performance Audits.

PAEC also referred to findings and recommendations from other audits including The Victorian Government ICT Dashboard, Financial Systems Controls Report: 2015–16, Digital Dashboard: Status Review of ICT Projects and Initiatives, Regulating Gambling and Liquor and Managing School Infrastructure.

The Electoral Matters Committee made 36 recommendations for improving civics and electoral participation in Victoria in its Inquiry into civics and electoral participation in Victorian state parliamentary elections. It refers to our 2016 audit Victorian Electoral Commission and echoes our recommendation about the need to evaluate, measure and improve the Democracy Ambassador program.

The Law Reform, Road and Community Safety Committee released an interim report for the Inquiry into VicRoads' management of country roads. It heavily references our 2017 report Maintaining State-Controlled Roadways and notes 'the need for recommendations made by VAGO in its road network reports to be implemented' and the importance of monitoring and publicly reporting on VicRoads' commitments in these areas. It also references our 2008 report Maintaining the State's Regional Arterial Road Network.

The Family and Community Development Committee's Inquiry into Perinatal Services drew on our 2017 report Effectively Planning for Population Growth. They summarised findings and recommendations made in the report about maternal and child health service governance, participation rates, data collection, and the service's ability to meet the demands of a growing population. The Secretary of the Department of Health and Human Services noted the progress the department had made since the 2011 VAGO report Maternity Services: Capacity.

Our financial audits have also made a measurable impact on internal controls this year. Part of our financial audit process is to issue management letters to agencies highlighting the internal control weaknesses we find and making recommendations to resolve them. Agencies respond to these letters with their intended actions. We follow up on all these issues with management and report progress to audit committees to ensure appropriate action is taken. This year we saw a significant improvement in the number of issues being resolved.

For example, at the start of 2018–19 the technical and further education sector had 24 unresolved audit issues from prior years. During the year 75 per cent of these issues were resolved, including the five high-risk issues we had found. In the university sector, 79 per cent of issues from prior years were resolved.

Over the past three years, across all sectors, we have seen the average number of open issues remaining at the end of each year steadily decline. This demonstrates agency management's commitment to a strong control environment and the positive, long-term impact of our approach.

Note: Below is an accessible version of the infographic in Section 3.5.

Before tabling

Date of tabling

After tabling

Recovering and Reprocessing Resources from Waste

$34.9 million package of recycling reforms announced

On 2 June 2019, just days before our audit tabled, the Minister for Energy, Environment and Climate Change announced a $34.9 million package of recycling reforms aimed at creating a more stable and productive recycling sector. This included a new $14.3 million Recycling Industry Development Fund, aimed at enhancing Victoria’s domestic remanufacturing capabilities.

Recovering and Reprocessing Resources from Waste
tabled 6 June 2019

 

Local Government and Economic Development

 

Local Government and Economic Development
tabled 8 March 2018

The audit found that rural and smaller councils lack the resources and capability to access available grants, which are intended to support councils’ economic development activities.

Government announced $20 million Rural Council Support Program

The program was announced in August 2018. Successful projects will improve the quality, effectiveness and affordability of services, and allow councils to raise revenue through new streams.

Managing Rehabilitation Services in Youth Detention

The agency acted on our findings during audit conduct

The former Department of Justice and Regulation (DJR) incorporated clearer waiting list requirements and regular reporting into service specifications, responding to our findings on service demand.

DJR used preliminary audit findings to support a budget bid

In May 2018, the 2018–19 State Budget provided $160 million to increase the number of beds at youth justice centres and $18.7 million to increase health and mental health services, including additional nurses, general practitioners and psychologists.

Managing Rehabilitation Services in Youth Detention
tabled 8 August 2018

 

Mental health audits

 

Access to Mental Health Services
tabled 21 March 2019

The audit found that Victoria’s mental health system is operating in crisis mode. It found that until the system capacity is improved, the Department of Health and Human Services (DHHS) cannot make meaningful improvements to clinical care or Victorians’ mental health.

After tabling Auditor-General invited to appear as a witness at the Royal Commission into Victoria's Mental Health System

The Auditor-General was asked to discuss our report findings and contribute to broadening knowledge of the conditions within the mental health sector. Our two audits were extensively referenced throughout the commission’s hearings during July 2019.

Child and Youth Mental Health
tabled 5 June 2019

The audit found that not all children and young people receive the mental health services they need. It found that DHHS needed to do more to strategically plan and lead the system to improve access and the coordination of services.

Before tabling

Date of tabling

After tabling

Maintaining the Mental Health of Child Protection Practitioners

The 2018–19 State Budget allocated $225.5 million to employ more than 450 child protection workers

Announced on 1 May 2018, this is largest expansion of the workforce in Victoria’s history. The issues of a lack of staff and heavy caseloads were well known in the sector and were highlighted by our audit.

Maintaining the Mental Health of Child Protection Practitioners
tabled 10 May 2018

$1.24 million Child Protection Wellbeing Program introduced in response to audit recommendations

This program was announced in January 2019, and will provide child protection practitioners and managers with a holistic mental health support program that is tailored to their specific needs.

Access to Public Dental Services in Victoria

 

Access to Public Dental Services in Victoria
tabled 7 December 2016

The audit focused on the accessibility of public dental services and getting the balance right between preventative and curative intervention.

Audit recommendation implemented

In May 2018, the 2018–19 Budget Paper No. 3 introduced a performance measure on the percentage of dental emergency clients treated within 24 hours.

Audit referenced in new guidelines

In August 2018, the Department of Health and Human Services published its Policy and Funding Policy Guidelines 2018: “In response to the audit, an extra $12.1 million was provided for a dental waiting list blitz to drive down delays for dental treatment. The department is working closely with Dental Health Services Victoria to progress the implementation of these recommendations.”

Fraud and Corruption Control—Local Government

 

Fraud and Corruption Control— Local Government
tabled 19 June 2019

The audit found councils spending money in ways where it was unclear how residents and ratepayers benefited and also found practices that may not meet public expectations.

Minister wrote to councils

In June 2019, the Minister for Local Government personally wrote to every Victorian council encouraging them to implement our recommendations

Managing the Municipal and Industrial Landfill Levy

The Victorian Government Sustainability Fund 2015–2017 Activities Report is released

In May 2018, our Managing the Municipal and Industrial Landfill Levy audit was in draft. The Department of Environment, Land, Water and Planning (DELWP) had released very little information to the public about the use of the levy prior to publishing this report.

Audit discussed in Parliament

In June 2018, during the second reading of the Environment Protection Amendment Bill 2018, MPs discussed our audit. The government committed to reporting on expenditure from the Sustainability Fund account to Parliament each year.

Managing the Municipal and Industrial Landfill Levy
tabled 25 July 2018

The Victorian Government Sustainability Fund 2017–18 Activities Report was released in September 2018. This showed DELWP’s commitment to continuing this reporting

Managing Private Medical Practice in Public Hospitals

 

Managing Private Medical Practice in Public Hospitals
tabled 20 June 2019

Minister for Health announced review of private practice in public health services

In June 2019 it was announced that Professor David Watters will examine hospital practices to ensure they are clinically appropriate and adhere to the principle of access based on clinical need.

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