NSW Audit Office - Awareness - Issue 2005 05 - June 2005
Description
AWARENESSAccounting and Auditing Developments ISSUE 5 - JUNE 2005AUDIT OFFICE 1 AUDIT OFFICE UPDATEUPDATEAUSTRALIAN 9 Auditor-General’s Report to Parliament 2005, ACCOUNTING Volume TwoSTANDARDS BOARD This report was released on 18 May 2005. Significant issues in this UPDATEvolume include:URGENT ISSUES 12 GROUP UPDATEAustralian Equivalents to International Financial Reporting Standards (AEIFRS) AUDITING AND 14ASSURANCE At the date of this Report no university has submitted its AEIFRS STANDARDS BOARD opening balances to the Audit Office for examination. Universities UPDATEshould have commenced restating their financial information during the year ended 31 December 2004.INTERNATIONAL 15UPDATEUniversity RevenueMISCELLANEOUS 16Revenue from fee-paying overseas students continued to grow in 2004. PUBLICATIONS ANDIt represented 58.2 per cent of total fees and charges and 16.6 per SPEECHEScent of total operating revenue.TREASURY UPDATE 19Asset Management at Universities PREMIER’S 20In general we found that all universities had asset management DEPARTMENTstrategies. However the detail of the strategy differed among UPDATEuniversities.AUDIT OFFICE 21BETTER PRACTICEThe University of SydneyGUIDESApproximately 56 per cent of computer equipment and 32 per cent of plant and equipment still in use are fully depreciated. We have suggested the University review the useful lives and depreciation rates for its assets.University of Newcastle The ...
Informations
| Publié par | Thewyer |
| Nombre de lectures | 18 |
| Langue | English |
Extrait
AUDIT OFFICE 1 UPDATE
The University of Sydney Approximately 56 per cent of computer equipment and 32 per cent of plant and equipment still in use are fully depreciated. We have suggested the University review the useful lives and depreciation rates for its assets.
Asset Management at Universities In general we found that all universities had asset management strategies. However the detail of the strategy differed among universities.
University Revenue Revenue from fee-paying overseas students continued to grow in 2004. It represented 58.2 per cent of total fees and charges and 16.6 per cent of total operating revenue.
Australian Equivalents to International Financial Reporting Standards (AEIFRS) At the date of this Report no university has submitted its AEIFRS opening balances to the Audit Office for examination. Universities should have commenced restating their financial information during the year ended 31 December 2004.
Auditor-General’s Report to Parliament 2005, Volume Two This report was released on 18 May 2005. Significant issues in this volume include:
AUDIT OFFICE UPDATE
University of Newcastle The University incurred an operating deficit of $26.8 million. This is a significant increase over budgeted and prior years’ deficits. Continuing deficits have put the University in a difficult financial position. The University has commenced major cost reduction programs. It is also revising its budgeting and financial monitoring processes.
AUDIT OFFICE 21 BETTER PRACTICE GUIDES
Awarenes i s s published by The Audit Office of New South Wales, Level 15, 1 Margaret Street Sydney NSW 2000, GPO Box 12, Sydney NSW T 2 e 0 le 01 p h on e 9275 7100 F ax 9275 7200 Emai l Terry.Hogan@audit.nsw.gov.a W u e bsit e www.audit.nsw.gov.au
AUSTRALIAN 9 ACCOUNTING STANDARDS BOARD UPDATE
URGENT ISSUES 12 GROUP UPDATE AUDITING AND 14 ASSURANCE STANDARDS BOARD UPDATE INTERNATIONAL 15 UPDATE MISCELLANEOUS 16 PUBLICATIONS AND SPEECHES TREASURY UPDATE 19 PREMIER’S 20 DEPARTMENT UPDATE
2
University of New South Wales We qualified the University’s opening balances because $4.7 million of an $8.3 million error identified in its 2003 bank reconciliation remains unexplained. We identified three unrecorded foreign currency bank accounts, which the University has operated for a number of years. The University settled a dispute with a Cooperative Research Centre resulting in an $8.3 million write-off of receivables and prepaid rent. The University approved the development of a fully equipped research and teaching campus in Singapore. Establishment of the first stage of the campus will cost the University approximately $113 million, which will be funded through borrowings. The University’s investment activities were poorly controlled during much of 2004 exposing the University to unacceptable risks.
Wollongong University The University re-assessed its accounting treatment of $16 million received from NSW Treasury in 2002 for the development of its Innovation Campus. The University recognised the funds as revenue during 2004. It initially recognised the amount as a non-interest bearing loan.
Wyong Water Supply Authority At the date of this report, the Minister for Land and Water Conservation has still not reached a decision on amending legislation and obtaining the Governor’s consent to validate certain water and sewerage charges. Between 1996 and 2002, Wyong Water did not comply fully with legislative provisions relating to its charges, and therefore all those charges require validation. Wyong Shire Council had difficulties implementing a new computer system. This adversely impacted Wyong Water’s ability to manage and control its budget and finances. Wyong Water is at risk of significant financial and operational difficulties if Wyong Shire Council does not promptly address and rectify this matter.
Further Information Barry Underwood, Executive Officer on 9275 722 b 0 a r o r r y. underwood@audit.nsw. gov.a . u The full report is available from our Internet sit w e w : w.audit.nsw.gov.au/ agrep05v2/Contents.ht . m
The Audit Office of New South Wales
Performance Audit Report
Backgrou nd The adequacy of Sydney’s water supplies is a significant public health, quality of life, conservation and economic development issue. Our audit looked at whether State water agencies had appropriate and adequate arrangements for ensuring a reliable supply of water to meet metropolitan demand requirements. We focused primarily on Sydney’s long-term requirements, not the drought being currently experienced.
Audit Opinion Sydney has been using more water than its storage system can continue to provide. Sydney’s water scarcity is not simply a problem related to drought. Sydney’s water supplies are increasingly inadequate to meet long-term metropolitan demand requirements. While it is possible to over use water in the short to medium term, the long-term effect is an increase in water shortages and the need for earlier and more stringent water restrictions. State water agencies have made significant progress towards integrating all aspects of planning for Sydney’s water supply and the Metropolitan Water Plan 2004 (“the Plan) is a comprehensive plan to close the gap between supply and demand. But the risk of water shortages may be more serious than indicated in t . h e Plan Critical areas of uncertainty and risk in relation to Sydney’s water include the impact of climate change, population growth, future reductions in water consumption, future savings from recycled water, and the future yield of the water supply. This means that the water agencies need to ensure the way forward is flexible and robust to cope with a range of possible futures. In looking ahead, much still needs to be done. Despite a necessarily high level of uncertainty and risk associated with the Plan, there is no explicit risk management plan. Although risks were considered and an ‘adaptive’ approach is being followed, planning did not identify or examine a worst-case scenario and there are no assurances in that regard. We believe that legislative and organisational arrangements relating to Sydney’s supply/demand balance need to be further clarified to formalise accountability for its oversight, and responsibilities clarified to ensure the adequacy of supply.
The Audit Office of New South Wales 3
4
We also believe that State water agencies need to adopt a greater level of transparency and engage with the public more in addressing the water supply/ demand balance, recognising that the measures being adopted will have widespread impact. Summary of Recommendations We made a number of recommendations to the Department of Infrastructure, Planning and Natural Resources, Sydney Water, Sydney Catchment Authority and related water agencies designed to improve: Planning for water security Identification and management of risks Oversight and accountability.
Further Information Sean Crumlin, Director, Performance Audit on 9275 72 s 8 e 6 a n o . r c rumlin@audit.nsw.go v.au . The full report is available from our Internet si h t t e t : p ://www.audit.nsw.gov.au/ perfaud-rep/Year-2004-2005/SydneyWater-May2005/sydneywater-conte . nts.html
Performance Audit Report Department of Health: Emergency Mental Health Services
Background About one in five people will be affected at some stage by a mental health problems or illness. Although most people can be treated in the community, at times some may require emergency treatment or admission to hospital for short term intensive therapy. Timely access to these services is essential for appropriate patient care and to minimise the risk of harm to self or others. Emergency mental health services are provided by the Department of Health and Area Health Services through community based mental health teams and public hospitals (emergency departments and psychiatric units) in metropolitan and rural areas. The report examines the adequacy of adult emergency mental health services in NSW from triage to assessment and whether patients face difficulties gaining access to an acute bed.
Audit Opinio n The report recognises and documents that much has been done over the last decade to improve access to, and the quality of emergency mental health services.
The Audit Office of New South Wales
We believe increases in mental health funding, increases in the number of mental health beds and improvements in clinical practice have contributed significantly to better services. However, developments in data collection and reporting have not always kept pace with service enhancements, making it difficult to quantify these improvements.
What we do know is that more mental health patients are presenting to emergency departments than ever before, these patients are often sicker and a greater number require admission. The increase in demand for emergency mental health services has offset many (and perhaps all) of the gains from funding increases. The system is under considerable pressure, and patients can face lengthy delays before being admitted to a bed. It is important that services work together to share resources at times of peak demand. Yet, there are times when the availability of mental health beds means that some patients face being transferred very long distances to access an acute mental health bed. There is also evidence that some patients spend inappropriately long periods in emergency departments while awaiting acute mental health beds or are discharged from the emergency department prior to a bed becoming available. We also consider the variation in the way Area Health Services provide access to after-hours services was not always the best for patients. The central intake model provides a higher level of assurance that a patient will be treated according to need and will be appropriately followed up compared to the multiple entry point model where patients face a greater risk of falling through the cracks.
Key Findings Over 200,000 people receive community mental health services each year with around 35,000 presenting to an emergency department. The Department of Health introduced a systematic process for documenting mental health assessments in 2001. This has standardised practice ensuring consistent triage, assessment, management and recording of patient outcomes. All Area Health Services have adopted common guidelines for mental health triage and since 1998 have been required to provide a 24 hour 1800 telephone number for mental health problems requiring urgent attention. However, not all telephone services are the same. Although all conduct triage and provide advice or referrals, some Area Health Services have established sophisticated call centres that act as a central intake for all providers. The centralised intake model presents a number of advantages such as more complete data on service demand.
The Audit Office of New South Wales 5
6
Performance standards have not been established for these telephone services such as: time to answer calls, the use of voicemail messaging or abandonment rates. In emergency department settings, patients may undergo a medical assessment in a timely manner but may wait, sometimes overnight for a mental health assessment. This is often due to the limited availability of specialist mental health services after hours and on weekends, especially in rural areas. We found patients may also wait for very long periods in the emergency department before being admitted to a bed. In one rural hospital we visited, we found that some mental health patients completed their intensive treatment in the emergency department without accessing a mental health bed. Despite increases in acute mental health beds over the last three years, they remain well below the Department of Health target of 31 beds per 100,000 adults. In addition, resources are not equitably distributed across the state. An emergency department is extremely busy. Mental health patients awaiting admission to a bed prevent others from accessing treatment. Mental health patients may also require one-on-one supervision redirecting nursing resources. One of the main difficulties faced in determining the extent of problems with access to acute mental health beds is the absence of data on unmet need.
Summary of Recommendations We made a series of recommendations to the Department of Health and Area Health Services designed to improve: Service quality, consistency, and equity Management of patient risk Knowledge about service demand Monitoring and reporting of performance.
Further Informati on Jane Tebbatt, Director, Performance Audit on 9275 727 ja 4 n o e r . t ebbatt@audit.nsw.go v.au . The full report is available from our Internet si h t t e t : p ://www.audit.nsw.gov.au/ perfaud-rep/Year-2004-2005/MentalHealth-May2005/mentalhealth-conten . ts.html
Performance Audit Report Department of Community Services H elpline Backgrou nd Children have the right to be safe from abuse and neglect. Unfortunately not all children are properly cared for and some are harmed.
The Audit Office of New South Wales
Each week the Department of Community Services handles over 4,000 contacts concerning children at risk of neglect or physical, emotional or sexual abuse. Most of these contacts are from mandatory reporters. The Department of Community Services has a statutory duty to protect children it considers to be at risk of neglect or physical, emotional or sexual abuse. To do this, it needs an effective system to receive, assess and refer information about children at risk. This is the role of the Helpline, which is the entry point for the Department’s child protection services.
Audit Opinio n We established a variety of criteria against which to assess the performance of the Helpline. Against these criteria, we believe the Helpline to be performing adequately overall. Some aspects are good. Some areas need further improvement. The task is challenging, as the Helpline receives more than half of Australia’s child protection reports. The Department has responded well during this audit initiating action to address matters we raised as the audit progressed. Before this audit commenced, the Department had established some service standards for the Helpline, and during the audit added additional standards relating to call waiting times and the time taken to refer reports for investigation. These standards now provide a framework for assessing the performance of the Helpline both as a call centre and as a referral service. Also on the positive side, the Department has: Adopted a central intake model for collecting child protection information, providing greater assurance that reports are assessed consistently Improved the overall performance of the Helpline, reducing the average call waiting time to less than five minutes Introduced processes to fast-track reports that clearly indicate a child is in imminent danger Routinely monitored urgent reports to ensure they are referred in accordance with the service standards Commenced a review of the assessment framework to identify additional tools to better weight risk and urgency. Issues requiring further attention include: The abandonment rate (the proportion of callers who hang up) before speaking to a caseworker Improving the requirements for taking and recording child protection information
The Audit Office of New South Wales 7
8
Achieving service standards established for low and moderate risk reports Improving data quality so that Helpline data can be used as a reliable indicator of demand to guide the Department’s statewide planning.
Key Findin gs The Department has significantly improved the performance of the Helpline since it was established in December 2000. Helpline has reduced the average time callers wait to speak to a caseworker to less than five minutes. However, nearly one in ten callers hang up before their information is collected. The majority of callers work with children and have a statutory duty to report and are liable for a $22,000 penalty if they do not, so they are likely to call again. But there is a risk that they may not. Staff use a range of approaches to screen and triage information to determine whether a risk of harm assessment is needed and how and when it should be done. The Department has recognised the need for additional procedures and training to guide decision-making. Caseworkers assess reports to determine firstly whether the child is at risk and secondly to decide how urgently the Department needs to respond. The Helpline ensures that reports about serious risk of harm, which require a response immediately or within 72 hours, are referred promptly for investigation. On average, the Helpline receives 186 of these reports a day. Although records are made of less urgent matters, there have been delays in referring such information. Each day on average, the Helpline receives 129 reports, which it assesses to involve a moderate to low risk of harm. The Department should respond to this information within 10 days, but in April 2005 there were 861 of these reports at the Helpline of which 305 were over 10 weeks old.
Summary of Recommenda tions We made a series of recommendations to the Department to: Improve the recording of information and the quality of risk assessments Enhance accountability for services Continue working with mandatory reporters to improve access to the Helpline.
Further Information Jane Tebbatt, Director, Performance Audit on 9275 727 j 4 a n o e r . t ebbatt@audit.nsw .gov.au . The full report is available from our Internet sit w e w : w.audit.nsw.gov.au/ perfaud-rep/Year-2004-2005/DocsHelpline-June2005/docs-helpline-conten . ts.html
The Audit Office of New South Wales
AUSTRALIAN ACCOUNTING STANDARDS BOARD (AASB) UPDATE MEETING 4-5 MAY 2005
The AASB discussed the following matters:
Strategy and Work Program In relation to domestic projects, the Board decided that it is essential for the AASB to progress its domestic agenda to cater for local needs. Internationally, the Board decided to focus on the three research projects that the AASB leads on behalf of the IASB (Intangible Assets, Extractive Activities and Joint Ventures) and on the two IASB projects for which AASB staff are Project Team staff members (Insurance and Liability/Revenue Recognition). The Board noted the importance of being involved in IPSASB projects and monitoring other IASB projects and decided a draft plan should be developed for sharing this work between the AASB and FSRB (New Zealand) would avoid duplication.
Financial Instruments Listed Property Trusts The Board decided not to amend AASB 132 ‘Financial Instruments Disclosure and Presentation’ to require units issued by listed property trusts to be classified as equity. It noted that the illustrative examples of the standard provided guidance for entities that do not have equity as defined by the standard.
Financial Instruments Fair Value Option The IASB is expected to issue an amendment to IAS 39 shortly that will impact upon AASB 1023 ‘General Insurance Contracts’ and AASB 1038 ‘Life Insurance Contracts’ which currently mandate the use of the fair value option to value financial assets backing insurance liabilities. To the extent permitted under the amended IAS 39, the Board agreed that AASB 1023 and AASB 1038 should require insurers to fair value financial assets backing insurance liabilities. The Board will consider a draft amendment to AASB 1023, AASB 1038 and AASB 139 ‘Financial Instruments: Recognition and Measurement’ at its earliest meeting after the IASB amends IAS 39.
Financial Instruments Cash Flow Hedge Accounting of Forecast Intragroup Transactions The Board made AASB 2005-1 ‘Amendments to Australian Accounting Standard, which amends AASB 139 ‘Financial Instruments: Recognition and Measurement’. The amendments, in respect of allowing a group to designate a transaction as a hedge under particular circumstances, will apply to reporting periods beginning on or after 1 January 2006 and early adoption will be permitted.
The Audit Office of New South Wales 9
Treasury Shar es The Board considered the application of AASB 127 ‘Consolidated and Separate Financial Statements‘ and AASB 132 ‘Financial Instruments: Disclosure and Presentation’ to life insurers that hold shares in themselves or their parent entities on behalf of policyholders, and noted a potential anomaly. The Board observed that the impacts would not be material in many cases and agreed nothing could be done to remove the anomaly. Contribution by Owners The Board considered submissions on the Invitation to Comment ‘The Definition of “Contribution by Owners and agreed that it would approve (out of session) issuing an ED proposing to amend: AASB 3 ‘Business Combinations’ to replicate IFRS 3, in particular, excluding common control transactions from its scope AASB 1004 ‘Contributions’ and Interpretation 1038 ‘Contributions by Owners Made to Wholly-Owned Public Sector Entities’ to use generic language from the ‘Framework’ in place of the current language that relies on the defined term “contribution by owners. Provisions and Contingencies Based on a forthcoming IASB ED, the Board considered a draft Australian ED ‘Request for Comment on Proposed Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets and IAS 19 Employee Benefits’. The main changes to AASB 137, ‘Provisions, Contingent Liabilities and Contingent Assets’ and AASB 119 ‘Employee Benefits’ were discussed by the Board. Extractive Activities The Board considered an IASB ED Amendments to IFRS 6 ‘Exploration for and Evaluation of Mineral resources and IFRS 1 First-time Adoption of International Financial reporting Standards’. Due to the minor and mechanical nature of the proposed technical correction, the Board decided not to issue an ED, encouraging constituents to respond directly to the IASB’s ED. SMEs In respect of the IASB Staff Questionnaire on Possible Recognition and Measurement Modifications for Small and Medium-sized entities, the board continued to hold the view that the recognition and measurement requirements should be the same for all reporting entities and agreed to respond to the questionnaire on this basis.
10 The Audit Office of New South Wales
Insurance Liability Adequacy Test The Board rejected an option to test at either a whole of entity or portfolio level and agreed to use the notion stated in AASB 4 ‘Insurance Contracts’ that the liability adequacy test be applied to portfolios of products that are subject to broadly similar risks and are managed together as a single portfolio. A draft standard will be sent to Board members for making out of session.
GAAP/GFS Convergence The Board reviewed paragraphs 26 to 62, Appendices A & B and the Preface to the draft ED ‘Financial reporting of General Government sectors by Governments. The Board decided to: Mandate the classification of expenses by ‘nature’ on the face of the operating statement Not mandate the disclosure of the classification of financial assets and liabilities into foreign and domestic components Add a commentary paragraph, to paragraph 44, which notes that, where appropriate, additional disclosure is made to assist users to understand the components of the numbers presented in the financial statements Require disclosure of the original budget that was previously presented to Parliament for the reporting period, recast if necessary to be in a format consistent with the financial information prepared in accordance with the Standard and explanations of major variances between the actual and budgeted amounts In relation to transitional requirements, to provide an exemption from the requirement in AASB 1 to disclose a reconciliation from previous GAAP to new GAAP Propose a mandatory operative date of years ending on or after 30 June 2007, with earlier adoption permitted. The Board will review proposals relating to disaggregated disclosures and an amended draft ED 9 including Preface and Appendices) incorporating all of its April and May decisions, at its next meeting.
Employee Benefits The Board considered whether an entity that is the sponsor of a defined benefit superannuation plan should include contributions tax in the calculation of their defined benefit obligation. It was decided that the actuarial assumptions used in the calculation of defined benefit obligations should include any contributions tax payable to the extent that it is probable that the entity will be required to pay the contributions tax.
The Audit Office of New South Wales 11
© 2010-2024 YouScribe