An audit of the finance and payroll systems of the Building and Construction Industry Training Board’s Construction Training Fund (CTF) has revealed the Fund was unable to know whether it had been exploited or not due to a lack of records and deficiencies in its management.
In her report Forensic Audit – Construction Training Fund, Auditor General Caroline Spencer said her team found serious deficiencies in the Fund’s systems, processes and controls: “which exposes the CTF to significant fraud risk”.
Ms Spencer said the CTF collected $45 million last year in levies from residential, commercial and civil engineering projects valued at more than $20,000 each.
She said the levies were intended to be returned to the building and construction industry to subsidise training for apprentices, trainees and mid-career retraining and upskilling.
“Through our forensic audit, which builds on findings in recent financial audits and various risk indicators, we found serious deficiencies in systems, processes and controls, which exposes the CTF to significant fraud risk,” Ms Spencer said.
“More concerningly, the CTF is unable to examine if fraud vulnerabilities have been exploited in some areas due to a lack of records,” she said.
“Our forensic audit found significant instances of noncompliance with State procurement and record keeping obligations.”
She said that until recent times, the CTF had not sufficiently demonstrated a sound understanding of its obligations to operate within the public sector governance framework.
“Our in-depth forensic audit found that the CTF’s unusually disorganised financial management exposes it to an alarming level of fraud vulnerability,” the Auditor General said.
“While we can never provide absolute assurance, we are confident that based on what we could examine, this is a case of incompetence or lack of care, rather than corruption.
‘I am encouraged that the CTF has taken some intensive steps over recent years to uplift its governance and fraud resilience, however there is much more to be done and the CTF urgently needs to actively manage its fraud risks,” Ms Spencer said
The Auditor General’s 15-page report can be accessed at this PS News link with the audit team Carl Huxtable and the Forensic Audit team.
