NSW Audit Office - Financial Reports – 2003 - Volume 6 – Compliance Review of Accountability and
2 Pages
English
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NSW Audit Office - Financial Reports – 2003 - Volume 6 – Compliance Review of Accountability and

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2 Pages
English

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Compliance Review of Accountability and Reporting Requirements for State Owned Corporations (SOCs) Corporatisation involves establishing a government business as a separate legal corporate entity, to enable it to focus on its commercial objectives. While a State Owned Corporation (SOC) operates at arm’s length from Government, it must still be accountable to Government and other stakeholders. We reviewed how well 15 State Owned Corporations met their accountability and reporting requirements under various laws, policies and their Statement of Corporate Intent (SCI). The requirements of Government are embedded in the State Owned Corporations Act 1989 (the SOC Act), the individual SOC’s enabling legislation and in its Statement of Corporate Intent (SCI). The requirements of the annual reports and financial arrangements legislation are also applicable to SOCs, along with some Premier’s Department and Treasury policies that require SOCs to account for their performance. KEY FINDINGS Of the 15 agencies reviewed, no issues were noted at 10 agencies. 5 did not meet all their accountability and reporting requirements. Shareholder Ministers are tabling documents in Parliament more than 6 months after being finalised. While this meets SOC Act requirements to table documents in Parliament within 14 sitting days, it does not facilitate accountability on a timely basis as Parliament can have long breaks between sitting days. RECOMMENDATIONS NSW Premier’s ...

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Compliance Review of Accountability and Reporting Requirements for State Owned Corporations (SOCs)
Corporatisation involves establishing a government business as a separate legal corporate entity, to enable it to focus on its commercial objectives. While a State Owned Corporation (SOC) operates at arm’s length from Government, it must still be accountable to Government and other stakeholders.
We reviewed how well 15 State Owned Corporations met their accountability and reporting requirements under various laws, policies and their Statement of Corporate Intent (SCI).
The requirements of Government are embedded in the State Owned Corporations Act 1989 (the SOC Act), the individual SOC’s enabling legislation and in its Statement of Corporate Intent (SCI). The requirements of the annual reports and financial arrangements legislation are also applicable to SOCs, along with some Premier’s Department and Treasury policies that require SOCs to account for their performance.
KEY FINDINGS
Of the 15 agencies reviewed, no issues were noted at 10 agencies. 5 did not meet all their accountability and reporting requirements.
Shareholder Ministers are tabling documents in Parliament more than 6 months after being finalised. While this meets SOC Act requirements to table documents in Parliament within 14 sitting days, it does not facilitate accountability on a timely basis as Parliament can have long breaks between sitting days.
RECOMMENDATIONS
NSW Premier’s Department should consider setting specific time periods for Shareholder Ministers to table documents in Parliament rather than within 14 sitting days of receiving the document from the SOC. A more specific time period may improve accountability of SOCs to Parliament.
DETAILED FINDINGS
Energy Australia
Energy Australia did not submit its SCI and related reports on time to the Shareholder Ministers. Hunter Water Corporation §Financial report nondisclosures were not supported by exemptions from NSW Treasury. Following our audit an undated letter was obtained from NSW Treasury providing exemptions for the 200203 and future financial years. §The Shareholder Ministers were late signing the 200203 SCI. It was signed after our audit. §The Corporation’s annual report for 200102 did not adequately identify departures from the performance and financial targets set out in the SCI. Landcom Landcom was late in submitting its 31 December 2002 half yearly report to the Ministers as it was clarifying an accounting issue with NSW Treasury.
AuditorGeneral’s Report to Parliament 2003 Volume Six
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Compliance Review of Accountability Requirements Placed on State Owned Corporations (SOCs)
Rail Infrastructure Corporation §The Corporation didnot submit its SCI and related reports on time to the Shareholder Ministers. §The Corporation’s annual report for 200102 did not adequately identify departures from the performance and financial targets set out in the SCI. Waste Recycling and Processing Corporation§The Corporation did not submit its SCI and related reports on time to the Shareholder Ministers. §The 200102 Annual Report did not include a statement about how the Corporation had exhibited a sense of social responsibility.
Tabling of Documents in Parliament
Documents were tabled in Parliament more than 6 months after being finalised yet still complied with the SOC Act. Better accountability is achieved if SOC Act documents are tabled in Parliament on a more timely basis. Because of the State Election on 22 March 2003, the first sitting day in 2003 for both the Legislative Assembly and Legislative Council was 29 April 2003. The SOC Act requires a number of documents to be tabled in Parliament within 14 sitting days. For example, some sampled SCIs due with the Shareholder Ministers by the end of 30 September 2003 were not tabled until 28 April 2003 without breaching the SOC Act.
A more timely outcome is achieved under the Annual Reports Acts where a specified time is given for tabling the Annual Report. The Minister is required to table Annual Reports within 1 month of receipt from agencies. The Annual Report can be presented to the Clerk of a House of Parliament if not sitting.
Agencies view their responsibilities as ending with the submission of documents to their Shareholder Ministers. As such, not all agencies could advise when their documents had been tabled in Parliament, whether it was within fourteen sitting days as required by the SOC Act, nor did they appear to be necessarily monitoring this outcome. Given agencies have no control over when their documents are tabled in Parliament by the Shareholder Ministers this would seem a reasonable position.
BACKGROUND The review was undertaken in the following SOCs: Country EnergyNSW Lotteries Corporation Energy AustraliaPort Kembla Ports Corporation Eraring EnergyRail Infrastructure Corporation Hunter Water CorporationSydney Ports Corporation Integral EnergySydney Water Corporation Landcom Transgrid Macquarie GenerationWaste Recycling and Processing Corporation Newcastle Ports Corporation
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AuditorGeneral’s Report to Parliament 2003 Volume Six