The Auditor-General has issued unmodified audit opinions on the majority of the State’s financial reports, but Victorian Rail Track (VicTrack) has received a modified opinion for the third year in a row due to how it accounted for some of its assets.
In his Auditor-General’s Report on the Annual Financial Report of the State of Victoria: 2021–22, Auditor-General Andrew Greaves issued unmodified opinions on 25 of the 28 material entities’ financial reports.
“We continue to modify our audit opinion on the financial report of Victorian Rail Track, a significant controlled entity of the State, because of how assets leased to the Department of Transport (DoT) are accounted,” Mr Greaves said.
“We are yet to provide audit opinions on the financial reports of the Department of Jobs, Precincts and Regions (DJPR) and the North East Link State Tolling Corporation (STC),” he said.
“Our unmodified opinion provides reasonable assurance that the financial performance and position of the State of Victoria, and within that the General Government Sector (GGS), as reported in the 2021–22 Annual Financial Report of the State of Victoria (AFR), are reliable.”
Mr Greaves said an adverse opinion on VicTrack’s financial report was issued again this year as the entity continued to incorrectly account for the assets it leased to DoT.
He said this incorrect accounting was “material and pervasive” to VicTrack’s financial report.
“In 2020 we concluded the arrangement between VicTrack and DoT is a finance lease, based on the respective roles and responsibilities of all parties in the transport network,” the Auditor-General said.
“VicTrack maintained its accounting position from 2019–20,” he said.
“It concluded the arrangement is an operating lease because it believes it has significantly all the risks and rewards incidental to ownership of the operational transport assets.”
Mr Greaves said he was yet to issue an audit opinion of DJPR’s 2021-22 financial report as he wished to conduct further audit testing of the Department’s various COVID-19 grants payments.
“Except for this testing, all other elements of DJPR’s financial report have been audited,” he said.
“The outstanding work relating to the COVID-19 grant payments does not pose a material risk to the AFR.”
Mr Greaves said an audit opinion was not issued for STC, established with responsibility for the North East Link Road in March 2021, as its financial report only related to off-balance sheet commitments – assets and liabilities it had committed to but not yet included in its balance sheet.
The Auditor-General’s 45-page Report can be accessed at this PS News link.
