Auditor-General's Report

Auditor-General's Report

Debate resumed.

Mrs HURN: Minister, at page 98 on fees and charges, the Auditor-General notes there has been a 12 per cent increase in those, and it notes particularly a $36 million increase for patient and client fees. Could you just explain by what quantum and what percentage did the fees and charges that are charged to patients staying in hospital longer than 35 days increase?

The Hon. C.J. PICTON: I also pass on from the government of South Australia our thanks to the delegation who are here. I also note the excellent work of Ms Satu Teppo, who is an excellent representative of Finland here in South Australia.

In terms of this question, I think you will be right in that I suspect the vast majority of this increase has been in terms of long-stay patients, of which we have obviously seen an increase. I am happy to take the question on notice in terms of a breakdown. What is fair to say is that this is a provision of the National Health Reform Agreement that has been in place for many decades, that if a patient stays above a certain amount of time where they no longer require treatment, then there is a fee that attaches to that which is set as a benchmark of the age pension. That is the same in South Australia as it is in every other state and territory.

Let me just check if we have that information. I just have that information in terms of the increase of activity, but I will see if we can break that down even further in terms of that fee versus any other fee. The only other fees that I am particularly aware of that we charge are in relation to international patients. Obviously, we provide care for people who are covered under the Medicare system. For people who are not, there is a schedule of fees, which is issued every single year, which people either have to pay or they have overseas health insurance which pays, of which Bupa and other providers provide coverage for people in that category. That may well be part of it and we will see if we can break that down.

Mrs HURN: At page 175, under SAAS, how many customers had paid their membership fees but not had their status updated in SAAS's billing system? And how many members were then, therefore, incorrectly invoiced for transport costs?

The Hon. C.J. PICTON: My adviser has been furiously looking to see if we have that information. I do not think we do. I am happy to take that on notice. I believe SAAS work quite constructively with people. If there were to be an issue, I am sure that they would look at it appropriately and make commonsense judgements in terms of people's membership if they were to have an ambulance incident at a time when there had not been a membership processed. But we will see what information we can provide.

Mrs HURN: At page 199, under WCHN, the audit details that WCHN received $26 million of land free of charge for the new Women's and Children's Hospital. Who provided that land? Can you confirm what piece that is? Is that sum included in the $3.2 billion budget for the project?

The Hon. C.J. PICTON: The advice that I have is that we believe that is from the council. Members may recall we passed the New Women's and Children's Hospital Act, which made provision in terms of land and that may well be part of that land. We will seek to confirm that information.

I have the information that resources received free of charge increased by $26 million related to land received free of charge from SA Police, which was valued at $15 million, and Adelaide City Council, valued at $10.5 million for the new Women's and Children's Hospital. I am advised that would be part of the overall budget.

Mrs HURN: At page 105, in relation to 'Information technology general controls', the Auditor found a number of issues in relation to information technology general controls. He states:

These findings increase the risk of unauthorised access or changes to data, and being unable to recover data in the event of a system failure.

Are you concerned about this, and is patient privacy being increasingly compromised?

The Hon. C.J. PICTON: I think it is fair to say that, clearly, cyber attack risks are significant for SA Health and also for every other government agency and everywhere across the world. It is something that we take extremely seriously and is obviously a very high priority for Digital Health within our portfolio.

As per what it says here, we will certainly respond to the recommendations of the Auditor-General on this matter. We want to do everything we possibly can to improve cybersecurity for our systems. If there is any other information that I can provide that does not breach security information then I will certainly take that on notice.

The CHAIR: The allocated time has expired. I thank the minister and the member for Schubert and also the advisers. Next please. Member for Bragg, you are leading the charge?

Mr BATTY: Yes, sir.

The CHAIR: We have not started the clock yet, so you are alright.

Mr BATTY: I do not expect to need much of the time on the clock.

The CHAIR: I welcome the Minister for Climate and Environment and the member for Bragg. Please start the questions.

Mr BATTY: I suspect this could be a relatively brief examination because I know how much of a stickler for the rules you are, sir, from past experience, and that you would like me to confine my questions to the audited report of the agency. Unfortunately, we are in the rather unusual situation where we do not have an audited report of the Department for Environment and Water. We have a statement in the Auditor-General's Report that the time needed to finalise financial statement audits and provide assurances was beyond the time they had available to finalise the audit for inclusion in this report. So in those circumstances, I guess my first question is whether we can adjourn this examination and return at such a time when we have an audited report to examine.

The CHAIR: Unfortunately I do not have that power and nor does the committee have that power, because it has been determined by the house that it will take place today. Unless the house changes its mind, it is not going to happen. We need to progress to the extent that you can.

Mr BATTY: I would like to ask the minister whether she would be prepared to return to parliament at another time to answer questions about the Auditor-General's Report, as and when it is submitted, so there can be some scrutiny in the usual way.

The CHAIR: The minister is a powerful person but does not have the power to overrule—

Mr Teague interjecting:

The CHAIR: Let me finish. I did not interrupt you when you were speaking. The minister does not have the power to overrule a decision of the house. So we can pack up and go and you can ask the house when it resumes if you want to do that and take your chances. It is up to you. Or you can do what you have available and, acknowledging the difficulty you are in, I am happy to allow you some flexibility.

Mr BATTY: What advice did the minister seek as to why we do not have an audited report for the Department for Environment and Water, and when does the minister expect to receive the audited report?

The CHAIR: I will let the minister look at that, but my view would be that the minister is not responsible for the Auditor-General and therefore cannot speak on behalf of the Auditor-General. The Auditor-General, as far as I understand, has made an interim report, which is on page 79. That is my ruling. So you can continue with page 79 and, like I said, I will allow you some flexibility if there are other things you are aware of during that audit period.

Mr BATTY: Let's confine ourselves to the report, sir. On page 79, which the Chair has characterised as an interim report, it begins with the quote, '…at the time of this report our audit of DEW is not complete.' My question is whether the minister has sought advice as to why the report is not complete? Is there outstanding information that her department needs to provide? Is it a particular unique set of circumstances that the Department for Environment finds itself in? I am just trying to do the best I can to work out why we are in this situation, and I am certainly not reflecting on the minister or the department in asking that question.

The CHAIR: I did not take your question that way, but I do draw your attention to paragraph 2 of the Auditor-General's Report. That answers your question. Minister, you are free to add to that if you wish.

The Hon. L.P. HOOD: On 11 September 2025, the Auditor-General advised that DEW's audited financial statements would not be included in the 2024-25 annual report to parliament. Under the Public Sector Act 2009, DEW's annual report must be submitted by 30 September and include audited financial statements. Historically, the Auditor-General's audit opinion for DEW has been issued by late September and this delay was not expected.

I understand that over recent years concerns have been raised about DEW's bank reconciliation process, with the Auditor-General reporting the need to improve controls over it. Despite these concerns, previous DEW audits were completed in time for the Auditor-General's annual report. In his annual report, the Auditor-General advised that the 2024-25 financial statement audit has involved detailed work on DEW's bank reconciliation. Reflecting this history, additional time has been required to finalise the audit.

The department is aware of these issues and has continued in looking for ways to improve its bank reconciliation process. DEW's account is complex. It services 16 entities from the one bank account and handles a large volume of low-value transactions generated at retail sites, making matching difficult at times. The Auditor-General has confirmed that DEW's audited financial statements will be reported separately, with timing and format yet to be confirmed.

DEW lodged its financial statements on time with the Auditor-General and continues to cooperate fully, providing documentation and responding to audit queries. It is important to note that, from the work completed to date, there is no suggestion of impropriety. Given that the audit has not yet been finalised, DEW is unable to present audited financial statements with its 2024-25 annual report by 30 September. When presented after that date, the annual report must include a statement of reasons and, once the audit is complete, the audited financial statements will be incorporated into the annual report and tabled within the 12 sitting days.

The Botanic Gardens and State Herbarium, Dog and Cat Management Board, Environment Protection Authority and Green Industries SA are also affected by that delay in audited financial statements, and their annual reports cannot be finalised until the Auditor-General completes the DEW audit. Like DEW, these agencies will provide a written statement of reasons for the delay with their annual reports, and they will be tabled in parliament together.

DEW is committed to resolving the issues and have steadily reduced historical unmatched items and strengthened reconciliation controls despite legacy system limitations. The department is preparing to migrate to the whole of government Oracle financial platform in 2026, which will enhance controls and simplify banking arrangements. In the meantime DEW will continue to work closely with the Auditor-General to finalise the audit and provide updates as required.

Mr BATTY: Thank you, minister and thank you, Chair, for giving the minister the opportunity to answer a question. I refer to page 79. There is a reference here:

Our audits over a number of years have raised concerns about the effectiveness of DEW's bank reconciliation process and the need to improve the controls over it.

What specific concerns have been identified regarding DEW's bank reconciliation processes in recent years, and how have they been addressed by the department?

The Hon. L.P. HOOD: I thank the member for his question. The Department for Environment and Water bank reconciliation, as expressed, has been a longstanding issue raised by the Auditor-General for multiple years, dating back to as far as 2010, to the former Department for Environment and Heritage, including under the former Marshall Liberal government. The issue has continued to be raised for the Department for Environment and Water since its creation in 2018. The Auditor-General in his report wrote that his 2024-25 financial statement audit has involved detailed work on DEW's bank reconciliation, reflecting this history.

As I have stated previously, DEW's bank reconciliation is complex, with a single bank account used by 16 entities, a high volume of low value transactions and system integration issues for old legacy systems all combining to make matching transactions difficult at times. Over the years DEW has implemented multiple processes to identify and rectify unmatched bank reconciliation items in a more timely manner, which has seen an improvement in the number and value of unmatched items.

In terms of processes implemented over previous years to improve controls, DEW continues to look for further improvements, and some processes that have been effectively implemented include decommissioning one legacy financial revenue system with integration issues to the general ledger; creating unique batch identifiers to prevent duplicate batch IDs, making matching transactions easier; creating an online portal to provide additional detail on each unique batch and to make identification of the source of batches easier with transactions in the bank account; establishing a failed batch SharePoint register to identify system integration failures and to ensure batches are fixed and matched in a timely manner; and systematic review of historical unmatched items to clear them from the bank reconciliation.

Mr BATTY: I am not really sure there is much more point in continuing to try to examine a report that does not exist. I wonder whether the minister might agree at some other time, not necessarily in parliament even but in some public setting, to give us the opportunity to examine her on the report when it is finalised by the Auditor-General?

The CHAIR: I think the minister is responsible to this committee, not individuals, so the parliament would have to reconvene the committee at some time. In my understanding the report will be released—

The Hon. L.P. Hood interjecting:

The CHAIR: It is up to the Auditor-General? Yes, it is up to the Auditor-General. I assume if it is released after we rise for the year the new parliament can deal with that question.

Mr BATTY: My question is whether the minister has any suggestions as to how we can ensure there is transparency and accountability in this process and give us the opportunity to ask her some questions at some point on a report that does not yet exist.

The CHAIR: I understood, yes—

Mr BATTY: But it is a question, respectfully, sir, to the minister—whether she has any ideas perhaps or whether the department has any ideas about how we can ask her some questions on this report.

The CHAIR: You may have misunderstood or misheard my first answer. I appreciate you trying to rephrase your question, but the minister is responsible in this committee to this parliament, and that is very clear. The parliament would set the requirements for the minister to do that. If that has to be at some future date, the parliament decides that, and so be it. When we sit next time, you are at liberty to ask the house, and the house can then direct the minister. The house decides.

Mr BATTY: It does not look like the minister is going to be allowed to answer any of these questions, in any event.

The CHAIR: Hold on, member for Bragg.

Ms Stinson interjecting:

The CHAIR: Member for Badcoe, you are not in your place; I cannot hear you. Member for Bragg, you are getting close to inferring something in terms of the Chair's ruling. Just be very careful.

Mr BATTY: Perhaps I might conclude shortly. I do want to point out that the shadow minister wrote to the Manager of Government Business on 20 October concerning this unusual situation we find ourselves in, in a fairly constructive manner, I might add. I might just read that letter out:

I am writing to you in your capacity as Manager of Government Business to request the rescheduling of the examination of the Minister for Climate, Environment and Water on matters contained in the report of the Auditor-General for the year ended 30 June 2025.

The Auditor-General has not completed the examination and reporting of the relevant department and agencies. Of note, the Auditor-General, at Monday's Budget and Finance Committee, indicated that it was his expectation that the audit opinion would be signed off before Christmas.

Given there is not an audit report or financials to examine, and to facilitate the transparency that is expected by the community, I request the examination be delayed until the release of the report into the relevant department and agencies. Please note this could require a time slot in the last sitting week or possibly a brief sitting to allow the report to be examined in December or January.

I think that is a fairly reasonable request in the circumstances. I think it is a shame that the house, or indeed the Manager of Government Business, could not agree to it. In the circumstances, there are obviously no further questions we can ask.

The CHAIR: So you have no further questions?

Mr BATTY: No.

The CHAIR: You did have 15 minutes to go, but since there are no further questions, I will—

Mr TEAGUE: Point of order: I think the Chair might be about to wrap up the committee. I do not want to—

The CHAIR: I was told by the lead person that there were no—

Members interjecting:

The CHAIR: Let me finish. The reason I was doing that is that the lead speaker for the opposition indicated he had no further questions. I do not think the minister is going to ask questions to herself. If other members want to ask questions, go ahead.

Mr TEAGUE: I think that might be right, Chair. If the Chair was on the way to wrap up the committee, I am not sure that is consistent with the motion. I think that might be out of all of our hands as well in that the house has determined that the audit is open for inquiry for the relevant period of time. It is unlike an ordinary committee stage on a bill.

The CHAIR: Well, ask questions.

Mr TEAGUE: We do not have any more questions.

The CHAIR: You have no questions?

Ms Stinson interjecting:

The CHAIR: Member for Badcoe, you are still not in your place. You have no more questions, but you want me to keep the committee—you do not want to do anything; just sit here?

Mr Teague interjecting:

The CHAIR: It was just a point of order? What was the point of order? What are you asking me to rule on?

Mr TEAGUE: The point of order is simply a question of what is within the power of the Chair in the circumstances of the motion and the setting aside of the time. The Chair might want to take advice from the Clerk. In that case, we will all be the better for it.

The CHAIR: My advice, my understanding, is you are allowed up to 30 minutes. If the opposition runs out of questions, we cannot proceed.

Progress reported; committee to sit again.