Accountability

Responsibility of a public sector entity to achieve its objectives, with regard to reliability of financial reporting, effectiveness and efficiency of operations, compliance with applicable laws, and reporting to interested parties.

Acquisition

Establishing control of an asset, undertaking the risks and receiving the rights to future benefits, as would be conferred with ownership, in exchange for the cost of acquisition.

This Appendix details the design principles of a better-practice liquidity management framework, summarised in Figure B1.

Figure B1

Better-practice design principles for liquidity management

We have consulted with the named agencies and we considered their views when reaching our audit conclusions. As required by section 16A of the Audit Act 1994, we gave a draft copy of this report to the Treasurer and asked for his submissions or comments. As required by section 16(3) of the Audit Act 1994, we gave relevant extracts of this report to named agencies and asked for their submissions or comments. Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.

It is important that entities manage their liquidity by forecasting when they expect to receive revenue and incur expenditure, to ensure that they have funds available to meet these costs and commitments.

The Treasurer, through the Department of Treasury & Finance (DTF), is responsible for managing the liquidity of the State of Victoria. The Treasury Corporation of Victoria (TCV) helps to discharge this responsibility.

The Annual Financial Report of the State of Victoria (AFR) shows the financial performance and position of the State of Victoria and the general government sector (GGS).

Independent audit opinions add credibility to financial statements by providing reasonable assurance that the information reported is reliable and accurate. A clear audit opinion confirms that the financial statements present fairly the transactions and balances for the reporting period, in accordance with the requirements of relevant legislation. Auditors issue a qualified opinion on an audit when they cannot state clearly that financial statements are fairly presented in all material respects.

Each year, we audit the annual financial report that the state government prepares under section 24 of the Financial Management Act 1994. Section 16A of the Audit Act 1994 requires that we report to Parliament on our audit.

This report satisfies our obligation. In it, we discuss the results of our audit and we analyse the financial performance and position of the State of Victoria.

The 2015–16 Annual Financial Report of the State of Victoria (AFR) was tabled in Parliament by the Treasurer on 13 October 2016. The AFR includes the financial statements of the State of Victoria and the general government sector.

This report provides Parliament with information about matters arising from our 2015−16 financial audit of the AFR. It also provides our assessment of the financial sustainability of the State of Victoria at 30 June 2016.

Ordered to be published

VICTORIAN GOVERNMENT PRINTER November 2016

PP No 220, Session 2014–16