Release of Internal Controls and Governance 2019 report by the NSW Auditor General
The NSW Auditor General released the final audit of Internal Control and Governance 2019 (Report) on 5 November 2019.
In preparing the Report the NSW Auditor General has analysed the internal control and governance of 40 of the largest agencies in the NSW public sector for the year ended 30 June 2019 which account for 84 per cent of total expenditure for all NSW public sector agencies.
Critical findings identified by the Report include that a number of agencies:
- have outdated or no internal policies to guide decisions
- have poor record keeping practices
- have incomplete gifts and benefits register, such as missing details for the approving officer, value of the gifts and benefits offered and reasons supporting the decision
- do not disclose the gifts and benefits register
- do not have principled internal audit procedures that comply with the NSW Treasury policy
- have insufficient control and monitoring over privileged user access to key system functions
- are slow to implement previous recommendations due to a need to prioritise the recent machinery of government changes.
The Report made four new recommendations in respect of gifts and benefits and internal audit as follows:
- managing gifts and benefits: That agencies should maintain a complete gifts and benefits register, provide on-going training and awareness, establish an annual attestation process for senior management and publish the gifts and benefits registers on the website
- reporting and monitoring of gifts and benefits: That agencies should report to the executive or other governance committee on trends in the offer and acceptance of gifts and benefits
- chief audit executive: That agencies' chief audit executives should comply with the NSW Treasury policy and preserve their independence by not reporting functionally or administratively to the finance function or other significant recipients of internal audit services
- quality assurance and reporting: That agencies ensure there is a documented and operational quality assurance and improvement program for the internal audit function.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.