26 September 2023

Central Agencies face audit scrutiny

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The Auditor General has released a report on the results of the financial audits of NSW Government central agencies – the Premier and Cabinet (DPC), Treasury and Customer Service clusters – the first since the 1 July Machinery of Government (MoG) changes to the cluster.

The Auditor-General, Margaret Crawford said there were 191 agencies in the three Central Agency clusters, including government financial, superannuation and insurance entities.

“There were two high-risk and 99 moderate-risk audit findings on internal controls,” Ms Crawford said.

“Of these, 31 per cent were repeat issues, and most related to weaknesses in information technology access controls,” she said.

Ms Crawford said the high-risk issues related to the former Department of Finance, Services and Innovation failing to assess the impact of new accounting standards as part of early close procedures, as well as one payment from the Social and Affordable Housing NSW Fund made without delegation.

“Agencies will be implementing the requirements of new accounting standards shortly,” she said.

“These could significantly impact their financial positions and operating results.”

The Auditor-General noted self-insurance losses of $1.4 billion partially due to “unfavourable movements” in the risk free discount rate, and an increase in workers compensation claims.

She said that, for the first time, agencies had self-assessed against the Australian Cyber Security Centre’s ‘Essential 8’ cyber risk mitigation strategies.

“Based on their own self assessments, more work needs to be done to improve cyber security resilience.”

Ms Crawford said all three Central Agency clusters were significantly impacted by MoG changes.

The 74-page report can be accessed at this PS News link.

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