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Correctional Services Department for Correctional Services Financial report for the year ended 30 June 2018 Government of South Australia INDEPENDENT AUDITOR'S REPORT � Auditor-General's Department ��M1 Level 9 State Administration Centre 200 Victoria Square Adelaide SA 5000 DX 56208 Victoria Square Tel +618 8226 9640 Fax +618 8226 9688 ABN 53 327 061 410 [email protected] www.audit.sa.gov.au To the Chief Executive Department for Correctional Services As required by section 31 (1)(b) of the Public Finance and Audit Act 1987, I have audited the financialreport of the Department for Correctional Services for the financial year ended 30 June 2018. Opinion In my opinion, the accompanying financialreport gives a true and fair view of the financial position of the Department for Correctional Services as at 30 June 2018, its financial performance and its cash flows for the then year ended in accordance with the Treasurer's Instructions promulgated under the provisions of the Public Finance and Audit Act 1987 and Australian Accounting Standards. The financial report comprises: • a Statement of Comprehensive Income forthe year ended 30 June 2018 a Statement of Financial Position as at 30 June 2018 • a Statement of Changes in Equity for the year ended 30 June 2018 a Statement of Cash Flows for the year ended 30 June 2018 notes, comprising significantaccounting policies and other explanatory information • a Certificate fromthe Chief Executive and the Executive Director, People and Business Services. Basis for opinion I conducted the audit in accordance with the Public Finance and Audit Act 1987 and Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor's Responsibilities forthe Audit of the Financial Report section of my report. I am independent of the Department for Correctional Services. The Public Finance and Audit Act 1987 establishes the independence of the Auditor-General. In conducting the audit, the relevant ethical requirements of APES 110 Code of Conduct forProfessional Accountants have been met. I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my opm1on. Responsibilities of the Chief Executive for the financial report The Chief Executive is responsible for the preparation of the financialreport that gives a true and fair view in accordance with the Treasurer's Instructions issue under the provisions of the Public Finance and Audit Act 1987 and Australian Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of the financial report that gives a true and fair view and that is freefrom material misstatement, whether due to fraud or error. Auditor's responsibilities for the audit of the financial report My objectives are to obtain reasonable assurance about whether the financial report as a whole is freefrom material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with Australian Auditing Standards, I exercise professional judgement and maintain professionalscepticism throughout the audit. I also: • identify and assess the risks of material misstatement of the financialreport, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Chief Executive • evaluate the overall presentation, structure and content of the financialreport, including the disclosures, and whether the financialreport represents the underlying transactions and events in a manner that achieves fair presentation. My report refers only to the financialreport described above and does not provide assurance over the integrity of electronic publication by the entity on any website nor does it provide an opinion on other information which may have been hyperlinked to/fromthe report. I communicate with the Chief Executive about, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during the audit. � Andrew Richardson Auditor-General 18 September 2018 Department for Correctional Services Certification of the Financial Statements For the year ended 30 June 2018 Certification of the Financial Statements We certify that the attached general purpose financial statements for the Department for Correctional Services: • comply with relevant Treasurer's Instructions issued under section 41 of the Public Finance and Audit Act 1987, and relevant Australian Accounting Standards; • are in accordance with the accounts and records of the Department; and • present a true and fair view of the financial position of the Department for Correctional Services as at 30 June 2018 and the results of its operation and cash flows for the financial year. We certify that the internal controls employed by the Department for Correctional Services for the financial year over its financial reporting and its preparation of the general purpose financial statements have been effective throughout the reporting period. David Brown Chief Executive Services 3 ( August 2018 } I August 2018 Department for Correctional Services Financial Statements For the year ended 30 June 2018 Department for Correctional Services Statement of Comprehensive Income For the year ended 30 June 2018 2018 2017 Note $'000 $'000 Expenses Employee benefit expenses 3 224 474 195 223 Supplies and services 5 94 192 88 538 Depreciation and amortisation expense 6 20 681 19 830 Payments to prisoners 4 227 3 773 Accommodation and associated lease costs 12 163 13 029 Grants 7 626 671 Other expenses 8 851 731 Total expenses 357 214 321 795 Income Prison labour 9 5194 4 518 Salaries and goods and services recoups 1 933 1 835 Interest revenue 1 Commonwealth revenue 10 767 1 102 Canteen and kitchen sales 11 1 126 1 128 Resources received free of charge 12 2 058 Net gain from the disposal of non-current and other assets 13 10 5 Other income 14 2 489 2 548 Total income 13 578 11 137 Net cost of providing services 343 636 310 658 Revenues from / (payments to) SA Government: Revenues from SA Government 15 362 041 331 874 Payments to SA Government 15 (37 368} Net result (18 963) 21 216 Other comprehensive income Items that will not be reclassifiedto net result Changes in revaluation surplus 20 11 399 11 587 Total comprehensive result (7 564) 32 803 The net result and total comprehensive result are attributable to the SA Government as owner. The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes. Department for Correctional Services Statement of Financial Position As at 30 June 2018 2018 2017 Note $'000 $'000 Current assets Cash and cash equivalents 16 28 063 50 907 Receivables 17 4 503 3 418 Inventories 18 1 844 1 597 Total current assets 34 410 55 922 Non-current assets Property, plant and equipment 20 571 768 519 987 Capital works in progress 21 52 553 48 213 Intangible assets 22 2 593 2 730 Biological assets 23 350 330 Total non-current assets 627 264 571 260 Total assets 661 674 627 182 Current liabilities Payables 25 23 062 23 750 Employee benefits 26 21 241 20 349 Provisions 27 3 118 2 748 Total current liabilities 47 421 46 847 Non-current liabilities Payables 25 3120 2806 Employee benefits 26 32 418 29 193 Provisions 27 25 049 7 269 Total non-current liabilities 60 587 39 268 Total liabilities 108 008 86 115 Net assets 553 666 541 067 Equity Retained earnings 28 66 061 85 111 Prisoner amenities reserve 28 213 126 Asset revaluation surplus 28 321 924 310 525 Contributed capital 28 165 468 145 305 Total equity 553 666 541 067 The total equity is attributable to the SA Government as owner. Unrecognised contractual commitments 29 Contingent assets and liabilities 30 The above Statement of Financial Position should be read in conjunction with the accompanying notes. Department for Correctional Services Statement of Changes in Equity For the year ended 30 June 2018 Prisoner Asset Contributed Retained Total amenities revaluation capital earnings equity reserve surplus Note $'000 $'000 $'000 $'000 $'000 Balance at 30 June 2016 1 298 938 97 638 64 020 460 597 Net result for 2016-17 21 216 21 216 Error Correction 2016-17 28 1 944 1 944 Gain on revaluation of land and buildings during 2016-17 9 665 9 665 Loss on revaluation of olives & citrus grove during 2016-17 {22} {22} Total comprehensive result for 2016- 17 11 587 21 216 32 803 Net changes in reserves 125 {125} Transactions with SA Government as owner: Capital contribution received 47 667 47 667 Balance at 30 June 2017 28 126 310 525 145 305 85 111 541 067 Net result for 2017-18 (18 963) (18 963) Gain on revaluation of land and buildings during 2017-18 11 394 11 394 Gain on revaluation of olives & citrus grove during 2017-18 5 5 Total comprehensive result for 2017- 18 11 399 {18 963} {7 564} Net changes in reserves 87 87 Transactions with SA Government as owner: Capital contribution received 20 163 20 163 Balance at 30 June 2018 28 213 321 924 165 468 66 061 553 666 All changes in equity are attributable.
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