Audit Office of New South Wales

Margaret Crawford, Auditor-General

29 June 2017

Key Proposition

Independent audit is a key element of good

governance

Good governance promotes community

confidence and drives performance

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This session will cover…

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Agenda

1. Background and overview of the audit mandate

2. How the Audit Office has managed the transition

3. Update on where we are at:

- Financial Audits

- Performance Audits

- Auditor-General’s Report to Parliament

4. Tools and resources

5. Conversation with the Auditor-General - your

thoughts

The Audit Office and its new Local

Government audit mandate

Audit Office of NSW established in 1824

Proud history of independent pubic

sector financial and performance audits

Reports to Parliament – not the

Executive

Local Government Amendment

(Governance and Planning) Act 2016

made the Auditor-General the auditor of

local councils from 1 July 2016

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Why change the audit arrangements –

what’s the ‘value add’?

Part of NSW Government’s broader local

government reform agenda

2013 Independent Panel Review

recommendation

Deep public sector knowledge

Greater consistency of approach

Whole of sector insights/benchmarking

Community trust and confidence

How we consider governance in our

Financial Audits

Risk

management

Procurement

practices

Gifts and benefits

Fraud and

Corruption

Project governance

Effectiveness of:

- Audit, Risk and

Improvement Committee

- Internal audit

Conflicts of

interest

Legislative

compliance

Related parties Code of

conduct

Policies and

procedures

IT Governance

Our transition approach

• Partnering

• Collaborative engagement

• Actively listening to ideas

• Strong relationships

• Adding value

Engagement with stakeholders

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2016-17 Financial Audit Approach

12 in-house audits

128 contracted out audits

2016-17 audit approach

Some Early Observations

Variations in Councils’ services Challenging system integration Old chestnuts:

Rural Fire Service assets Crown Land assets Valuation of assets Depreciation

New challenges: Related parties Council entities IT general controls and cyber security

Review of the Local Government code

Performance Audit

Effectiveness, Efficiency, Economy

Initial topics:

Reporting on service delivery

Fraud controls

Shared services

Sector-wide – showcase best practice

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Auditor-General’s Report to

Parliament

Under section 421C of the LG Act

the “Auditor-General is to report

annually on any local government

sector-wide matters arising from

the examination of financial

statements of councils and the

exercise by the Auditor-General of

audit or other functions under this

Act”.

Our tools and resources

Conversation with the Auditor-General:

Your Thoughts?