Buses are a significant form of public transport, providing cross-town transport, local services and links to the rail network. They are often the only readily accessible form of public transport available for people living in Melbourne's middle and outer suburbs.

Public Transport Victoria (PTV) oversees public transport operators. It is responsible for managing all bus service contracts, which currently cost the state around $1 billion per year.

The scale, complexity and likely impacts of the demographic, health, security and climate challenges facing Victoria requires a mature, well-coordinated approach to public sector risk management.

Falling short of achieving this threatens the government's goals for growing the economy in a way that protects and enhances the environment while improving the quality of life of all Victorians. The Victorian Government Risk Management Framework (the Framework) recognises the importance of good risk management.

Public sector agencies engage external resources to advise them on how best to realise government policy and to help them implement these decisions. The Department of Treasury and Finance's (DTF) June 2013 definition of a consultancy is the provision of advice to facilitate decision-making, whereas a contractor helps implement decisions.

This audit examined how effectively selected government departments are managing advisory engagements that help them make decisions.

VAGO undertakes performance audits into the economy, efficiency and effectiveness of public sector agencies and their operations to provide assurance to Parliament and drive public sector improvement. We aim to achieve this by identifying issues and making recommendations to agencies about how to address them. However, our recommendations cannot result in improvements unless they are accepted and enacted by public sector agencies.

This report informs Parliament about the results of our audit of the Annual Financial Report of the State of Victoria, 2014–15 (the AFR), transmitted to Parliament by the Treasurer on 4 November 2015.

The report reviews the financial outcomes and performance of the State of Victoria (SoV), and assesses the general government sector (GGS).

Audit committees play a key accountability role in the governance framework of Victorian public sector agencies. While management retains ultimate accountability for operations, audit committees independently review and assess the effectiveness of key aspects of an agency's operations.

Background

Effective infrastructure planning and delivery are critical to the state's future prosperity and liveability. Government introduced the High Value High Risk (HVHR) process to address systemic weaknesses undermining agencies' performance in developing and investing in major projects.