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Annual Report 2017-2018 Office of the Auditor General – Annual Report 2017-18 01 About our report Welcome to our 2017-18 Annual Report. We hope you find this report valuable in understanding our performance and the services we delivered during the year to inform Parliament on THE PRESIDENT THE SPEAKER public sector accountability and performance. LEGISLATIVE COUNCIL LEGISLATIVE ASSEMBLY You can access this and earlier annual reports on our website at www.audit.wa.gov.au. ANNUAL REPORT OF THE OFFICE OF THE AUDITOR GENERAL FOR We have structured this report around the 4 result areas of THE YEAR ENDED 30 JUNE 2018 our Strategic Plan – Our People, Our Tools, Our Approach and Our Products. It also describes our functions and In accordance with section 63, as modified by Schedule 3, of the Financial operations, and presents the audited financial statements and Management Act 2006, I hereby submit to Parliament for its information key performance indicators for the year ended 30 June 2018. the Annual Report of the Office of the Auditor General for the year ended 30 June 2018. Our front cover prominently displays Western Australia. The introduction of local government auditing in October 2017 The Annual Report has been prepared in accordance with the provisions (page 12), has significantly broadened our role in auditing the of the Financial Management Act 2006 and the Auditor General Act 2006. state public sector for the benefit of Western Australians. This year, more than any other year, we have travelled the state to explore and implement our new mandate. CAROLINE SPENCER AUDITOR GENERAL 20 September 2018 Feedback National Relay Service TTY: 13 36 77 (to assist people with hearing and voice impairment). We welcome your feedback and comments about our On request, we can deliver this report in an alternative format. Annual Report so we can improve the value of future reports. You can contact us by: © 2018 Office of the Auditor General for Western Australia. All rights reserved. This material • sending an email <[email protected]> may be reproduced in whole or in part provided the source is acknowledged. • writing to us <PO Box 8489, PERTH WA 6849> ISSN: 1320-6818 02 Office of the Auditor General – Annual Report 2017-18 Contents About us ...........................................................2 Our people ......................................................26 Our approach .................................................46 From the former Auditor General ...................6 Learning and professional development ............ 26 Financial auditing ............................................... 46 Performance development and review ............... 27 Working with audit firms ..................................... 47 From the Auditor General ...............................7 Graduate recruitment and support ..................... 27 Surveys of financial audit entities ....................... 47 Year in review...................................................9 Secondments ..................................................... 28 Information systems auditing .............................. 48 University liaison program .................................. 28 Performance auditing ......................................... 49 Highlights 2017-18 .........................................10 Equity and diversity ............................................ 28 Opinions on ministerial notifications ................... 53 Significant issues 2018-19 ............................11 Code of Conduct ................................................ 29 Quality framework .............................................. 54 Local government audit reform ....................12 Grievance resolution .......................................... 29 Reviews .............................................................. 55 Occupational safety and health .......................... 30 Working with Parliament ..................................... 57 Organisational structure ...............................14 Wellness Committee ........................................... 30 Working with our peers ....................................... 60 Senior officers .................................................... 15 Employee suggestions and ideas ....................... 30 Working with our stakeholders ........................... 61 Enabling legislation .......................................16 Employee assistance program ........................... 31 Our products ..................................................64 Doing our bit for charity ...................................... 31 Key legislation .................................................... 16 Financial auditing ............................................... 66 Social club .......................................................... 31 Performance management framework ........17 Our reports tabled in 2017-18 ............................ 67 Office forums ...................................................... 31 Making a difference – report successes ............. 77 Our performance ...........................................20 Employee survey ................................................ 32 Financial performance ........................................ 20 Financial statements, key performance Our tools .........................................................36 indicators, disclosures and other legal Key effectiveness performance .......................... 20 Governance ........................................................ 36 requirements, and appendices.....................78 Key efficiency performance ................................ 21 Key governance arrangements .......................... 37 Additional indicator of our performance .............. 21 Risk Management Framework ........................... 39 Our strategic direction ....................................... 22 Policy framework ................................................ 39 Technical advice ................................................. 39 Efficiency and Effectiveness Plan ....................... 40 Information systems ........................................... 40 Financial management ....................................... 41 Office of the Auditor General – Annual Report 2017-18 1 Our office About us The Auditor General is an independent officer of Parliament with responsibility for auditing the public sector. The Auditor General has complete discretion in the performance of these functions. This independence and freedom from pressure, influence or interference is the cornerstone of public sector audit. Ms Caroline Spencer (page 7), was appointed Auditor General for a non- renewable term of 10 years in May 2018, in accordance with the Auditor General Act 2006 (AG Act). The Office of the Auditor General (OAG) supports the Auditor General and is one of the largest audit practices in Western Australia. The OAG is a department of the public service and the Auditor General is the Chief Executive Officer and employer of staff. As figure 1 shows, the Auditor General reports directly to Parliament. Three parliamentary committees have oversight of our operations – Public Accounts Committee (PAC), Estimates and Financial Operations Committee (EFOC) and Joint Audit Committee (JAC). Figure 1: OAG reporting structure to Parliament 2 Office of the Auditor General – Annual Report 2017-18 Our Our main clients are Parliament, state and history – highlights local government entities, and the people 12 August 1829: Office of the Commissioners of the Board of of Western Australia Counsel and Audit opened 1 July 1831: Captain Mark Currie appointed first auditor of Western Australia 16 September 1881: The first Audit Act 1881 introduced to provide for effective keeping and auditing of public accounts The Auditor General is responsible for: 30 December 1985: Financial Administration and Audit Act 1985 • auditing the Annual Report on state finances introduced efficiency and effectiveness examinations of agencies (performance audit) and the audit of agencies’ KPIs • conducting annual financial statement, key performance indicator (KPI) and control audits, and issuing audit opinions for departments, statutory 1 June 1988: First performance audit tabled authorities, tertiary institutions and corporatised entities – The Management of Prisons Industries • conducting annual financial statement audits and issuing auditor’s reports 21 December 2006: Auditor General Act 2006 introduced for local governments ‘follow-the-dollar’ powers for when private sector entities perform functions on behalf of the public sector • undertaking wide-ranging performance audits to ensure there are adequate controls within state government agencies and local Financial Management Act 2006 separated audit and governments, compliance with relevant legislation, and most importantly financial management legislation efficiency, effectiveness and economy of operations or programs 11 November 2009: First report using ‘follow-the-dollar’ • reporting the results of audits to Parliament in an objective, competent, powers – Accountability for Government Grants insightful and timely manner. 25 August 2016: Joint Standing Committee on Audit tabled Review of the Operation and Effectiveness of the Auditor General Act 2006 28 October 2017: The Local Government Amendment (Auditing) Act 2017 proclaimed, giving the Auditor General the mandate to audit local governments Office of the Auditor General – Annual Report 2017-18 3 Our main clients are Parliament, state and local government entities, and the people
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