Financial performance

Close to our goal to break even over the medium-term

Excluding superannuation adjustments, we have achieved a cumulative $0.7 million surplus over the last four years.

Close to our break-even target

The work of the Audit Office is largely self-funded, generated from audit fees paid by auditees. These fees are set to cover our expenses while maximising value for the NSW public sector. Unlike private sector auditors, we aim to break even over the medium-term rather than make a profit. Over the four years to 2017–18, we have achieved a cumulative $0.7 million surplus, close to our medium term break-even target.

In monitoring our financial performance, we exclude the impact of the annual superannuation adjustments that affect our operating result. Like all government agencies with staff in the state’s defined benefit superannuation schemes, the schemes’ assessment of our liability varies substantially from year to year. These annual variations are outside our control and reflect the investment performance of the schemes and changes in actuarial assumptions. These superannuation adjustments are fully reflected in our audited financial statements, but are excluded from the information presented here so we can focus on our own performance.

Our original budgeted result of $1.9 million for 2017–18 was set in November 2016, well before we had finalised key commissioning and pricing decisions in auditing the local government sector. The original budget was also out of line with our long-standing principle of breaking even over the medium term. Through the 2018–19 State Budget process, the NSW government agreed to revise our budget to a small loss of $0.1 million for the year. We operated within this revised budget parameter.

Our 2017–18 revenue of $59.3 million was $12 million more than the previous year’s $47.3 million. Government entities, universities and councils paid $48 million for the audit of their financial statements. The NSW government contributed $10.3 million towards our performance audits and reports to parliament. Our 2017–18 total expenditure of $59.1 million, excluding the defined benefit schemes superannuation adjustments, was $11.9 million more than the previous year’s $47.2 million.

The increase in our total revenue was largely due to the Auditor-General completing the first cycle of local government audits since her appointment as the local government auditor in October 2016. Audit fees from this sector were $12.9 million in 2017–18, versus $3.2 million in the prior year. The increase in expenditure was also largely due to completing the first cycle of council audits.


While our $0.2 million surplus (excluding defined superannuation adjustments) in 2017–18 was significantly less than the original budgeted surplus of $1.9 million, it was better than the revised budgeted loss of $0.1 million the NSW government approved through the 2018–19 State Budget process.

Per the State Budget Papers, we are planning to make a small loss of $0.4 million in 2018–19.

Operating result 2017–18/$m
Excluding superannuation