Effectiveness, efficiency and economy

Our performance audits help parliament assess entity performance

18 performance audits and 1 compliance review completed

Helping to improve public administration

Performance audits provide information to the New South Wales Parliament and public about how well government programs and services are delivered. Ultimately, they aim to improve public administration. Performance audits examine whether programs and services are delivered efficiently, effectively, economically and in accordance with the law.

In 2017–18, the Auditor-General tabled 18 performance audit reports on the effectiveness, efficiency and economy of the NSW public sector. These reports made a total of 96 recommendations to improve public administration.

The reports looked at operations, service delivery, governance, project implementation and government advertising across a range of NSW government agencies and local councils. Some audits considered particular issues across a number of entities.

The extracts in the box below from published responses to our reports indicate the value the entities we audit attach to our recommendations in improving public administration, and the collaborative approach we adopt.

Published agency responses to our reports

Office of Local Government, ‘Shared services in local government

The Office of Local Government welcomes the Audit Office’s observations on strengthening local government performance in shared service delivery . . . in particular, we note and support the report’s recommended practices for councils to efficiently and effectively undertake shared services.

Environment Protection Authority, ‘Regulation of water pollution in drinking water catchments and illegal disposal of solid waste

I welcome the opportunity that the performance audit provides to identify prospects for the EPA to improve its regulatory operations. I would like to express my appreciation for the significant work of your audit team and their ongoing commitment to working through this process with my team.

NSW Treasury, ‘Managing risks in the NSW public sector: risk culture and capability

Strong risk culture and capabilities are essential to ensuring risk management is effective throughout an organisation and I welcome the Auditor-General’s focus on such an important area. This audit has provided valuable input on how the audited agencies have embedded risk management into their organisational cultures.

NSW Health, ‘Healthroster Benefits Realisation

I appreciate the efforts of the NSW Audit Office in conducting performance audit and for your ongoing engagement with NSW Health.

Opportunities to improve value to parliament

Parliament is our primary stakeholder and our work supports its role in holding the government to account. Our reports are frequently referred to in parliamentary debates and in budget estimates hearings.

Parliament is an important source of suggestions for performance audit topics.

Although we add value to the parliamentary process, there are always areas to improve. Comments in our most recent parliamentary survey provide insights into the value we provide to parliament, as well as gap areas. Most of the comments from Members of Parliament (MPs) who completed the survey were complimentary:

‘Well-presented reports which give great insight into Government services and delivery.’

‘Thank you for the work and the detailed reports.’

‘Its independence and integrity of the audit reports are an important part of good public administration.’

We also received some criticisms which can help us improve, as well as comments on our resource base and mandate:

‘The reports have become far less detailed, far less useful and far less important over the past few years’

‘Need to lift profile.’

‘The only suggestion would be more resources for the Auditor-General’s office so that the Government and Public Service delivery can be MORE closely scrutinized across more topics.’

‘The AG [Auditor-General] needs to be able to follow the (public) money even when it goes into the pockets of private entities.’

For more information see our parliamentary survey results.

Average cost of performance audits was below target

The average cost of performance audits and special reports published in 2017–18 was $287,420. This was below the target of $330,000 and six per cent higher than the 2016–17 result of $272,166.

The small cost increase of our performance audit work can be attributed to our new role in auditing the local government sector. This new role has entailed additional work to gain a good grounding in the issues facing the sector, and in engaging with a new group of stakeholders to communicate our role and purpose.

Choosing performance audit topics

We recently analysed the key findings and recommendations from 61 performance audits and special reports tabled in the NSW Parliament between 2014 and 2018, spanning varied areas of government activity. We will use this analysis to help determine areas of unaddressed risk across all parts of government, and to shape our future audit priorities.

We also continue to work with parliament’s Public Accounts Committee, senior members of agencies, ministers and other key stakeholders, to identify important issues and areas of concern to help define and focus the scope of our audits.

In addition, we work collaboratively across the organisation to draw together insights from financial, performance and compliance audits to help formulate our program and add to our understanding of key risks.

Leveraging internal and external expertise

For highly specialised and in more complex performance audits, required expertise can be drawn from across the organisation, senior members of staff and external advisors/consultants. In 2017–18, seven audits used external advisors/consultants leveraging expert advice and industry knowledge in data analytics, health planning, cyber security best practice, risk management culture and frameworks, best practice in probity principals, local government and facilitation of surveys.

Number of performance audits and compliance reviews completed

Note: 2018 includes one compliance review conducted under section 38E of the Public Finance and Audit Act 1983

Average cost of performance audits $’000

The year ahead

In 2018–19, we plan to:

  • build on our first audits in the local government sector and focus our audits on specific issues and some individual councils
  • use the analysis from our Performance Audit Insights report to help determine areas of unaddressed risk across all parts of government, and to shape our future audit priorities
  • investigate ways of harnessing relevant information held by agencies on our performance audit topics – such as data mining – whilst reducing the administrative burden on agencies in sourcing and producing it
  • seek further opportunities to use data analytics to support audit insights.