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WA Auditor-General slams financial errors by agencies

Western Australian Auditor-General Colin Murphy has slammed the number of errors in agency financial statements in a report released Wednesday, identifying $351 million worth of mistakes.

Net government assets were overstated by $132 million and the surplus by net $69 million. Because agencies failed to note these errors during the year, corrections were only made after the end of the financial year. Murphy stated:

“Unfortunately, because agencies did not identify these during the year, it was not until well after year-end that these errors were recognised and corrected and a more accurate understanding of the State’s financial result could be obtained.”

There were 474 financial and management control weaknesses reported in 2013-14, including an increase in the number considered “significant” to 78.

Murphy said it was “disappointing” a sizeable number of the errors were unresolved from the previous year. Payroll and human resources and expenditure represented the two most common areas for mistakes.

Also noted were 301 information system control weaknesses that, if left unresolved, could leave agencies vulnerable to security breaches or system disruptions.

The report also found inconsistencies in how agencies calculated redundancy payments, adding that:

“The overall cost to the State could have been lower if written notice to employees had been correctly made in a timely manner.”

One agency was unable to complete its financial statements and table its annual report within the timeframe required by law.

Murphy reiterated his previous call to reduce red tape for small agencies:

“Sixty-three agencies together account for only one per cent of total operating expenditure of government agencies. If these agencies can be freed from complying with the same detailed disclosure requirements as Australia’s largest not-for-profit government agencies and companies, significant cost savings can be achieved. In addition, finance staff would be freed‑up to focus on more value-adding responsibilities.”

Several agencies experienced “significant problems” following the decommissioning of the Office of Shared Services, which was created so agencies could pool some payroll and administration activities.

Author Bio

David Donaldson

David Donaldson is a journalist at The Mandarin based in Melbourne.