This Appendix sets out the financial indicators used in this report. The indicators should be considered collectively, and are more useful when assessed over time as part of a trend analysis. The indicators have been applied to the published financial information of the 19 water entities for the five-year period 2008–09 to 2012–13.
Audit types |
Financial statements |
Timeliness of audited financial statement completion | ||||||
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Figure B1 identifies the main components of an effective internal control framework.
Figure B1
Components of an internal control framework
Source: Victorian Auditor-General’s Office.
In the diagram:
This report is part of a suite of reports presented to Parliament covering the results of our audits of public sector financial reports. The reports are outlined in Figure A1.
Figure A1
VAGO reports on the results of the 2012–13 financial audits
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Report |
Description |
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An effective treasury function should monitor and manage cash flows to minimise borrowing costs while providing sufficient cash to meet obligations when they fall due. In this Part we comment on treasury management at the 19 water entities.
The water industry spent around $2.7 billion on goods, services and capital items in 2012–13. In this Part we comment on the controls over procurement at the 19 water entities.
Procurement frameworks were observed to be generally adequate. However, the high incidence of noncompliance with procurement policies, procedures and control activities identified by internal audits indicates there are opportunities for the governing bodies and management to improve practices.
This Part presents the results of our assessment of controls over the general information technology (IT) controls related to preparing financial reports, including the controls over IT security and change management.
To be financially sustainable, entities need to be able to meet current and future expenditure as it falls due and to absorb foreseeable changes and risks without significantly changing their revenue and expenditure policies. This Part provides insight into the financial sustainability of the 19 water entities.
This Part covers the financial results of the 19 water entities for the year-ended 30 June 2013.
The 19 water entities generated a net profit before income tax of $110 million for the year-ended 30 June 2013, a decrease of $497 million, or 82 per cent, from the prior year.
The industry also continued to access new borrowings to finance the construction of infrastructure assets and facilitate the payment of dividends.
Sixteen of the 19 water entities are required to include an audited statement of performance in their annual report. This Part covers the results of the 2012–13 audits of water entity performance reports. It also details the progress made by an industry working group to influence the indicators to be included in performance reports for 2013–14.