Auditor General's Report

Auditor-General's Report

The Hon. R.I. LUCAS (Treasurer) (15:22): I move:

That standing orders be so far suspended as to enable the report of the Auditor-General for the year 2019-20 to be referred to a committee of the whole and for ministers to be examined on matters contained in the report for a period of one hour.

Motion carried.

In committee.

The Hon. K.J. MAHER: I might outline for the benefit of the committee that we have just a few questions of the Treasurer, then some questions of the Minister for Human Services and after that some questions of the Minister for Health and Wellbeing. To the Treasurer: the financial statements for Southern State Superannuation Scheme, published along with the Auditor-General's annual report, outlines that death, invalidity and income protection insurance reserves holds $161 million. Can the Treasurer confirm to the council that the Super SA board has considered the outsourcing or privatisation of the insurance arrangements for the Triple S Scheme?

The Hon. R.I. LUCAS: My understanding and advice from the Super SA board is that it is considering possible outsourcing of the insurance arrangements, but that no decision has yet been taken by the government. If there were to be a decision of the government ultimately in relation to these issues, it would require, as I understand it, separate legislation, separate to the legislation that is currently before the parliament in relation to choice of fund and limited public offer.

So potentially it will be an issue that the board would have to address. My recollection of the advice is that they indicate they are the only provider that provides insurance arrangements internally. All other equivalent funds have insurance arrangements provided through I think a small number, less than a handful, of recognised national or international providers of these sorts of products.

The answer to the question is that I understand there has been consideration and some discussion with the public sector unions in relation to the issue, so there is no super secret about the issue. The board is considering the options and has had discussions, as I understand it, with the public sector unions in relation to it. Ultimately, it will be a decision that will have to come to the government and the cabinet for consideration.

The Hon. K.J. MAHER: I thank the Treasurer for his answer and for letting us know that nothing more can happen unless it comes to the government, there is a decision and legislation is passed by the parliament. I think the Treasurer said there has been some discussion by the board. Is the Treasurer in a position to advise if he knows if the board has merely had discussion or if there has been any sort of resolution of the board in relation to this?

The Hon. R.I. LUCAS: Certainly, the management and the board have pretty strong views in relation to what needs to be done. I would need to take advice from the board on the formal status of final decisions. It is not really the subject of the Auditor-General's Report. I am being fairly flexible in generously interpreting, always willing to assist the opposition.

I do not know the formal status of what final decisions have been taken by the board or not, but I do know, in the discussions I have had with the chair of the board and the CEO, that this has been under active discussion and consideration. As to its final status and nature by way of board resolutions or not, I would need to take advice. As I said, the advice I have had has been that this is not an issue to be decided in the current legislation.

The current legislation is in essence a follow-up to legislation moved nearly two years ago by the Hon. Connie Bonaros in this particular chamber in relation to choice of fund. We indicated to the honourable member that we were sympathetic to the views; however, it was a complicated issue, and she has been kept well apprised of the complex discussions that have gone on over nearly two years with public sector unions and others and the introduction of limited public offer into the current debate. That is that particular debate.

The issues of insurance arrangements, if they are to be pursued to the alternative model, I am advised will need to be pursued by way of legislative amendment, so the parliament will have the opportunity to consider them. I am advised that if the board continues with the current arrangements, it will lead within the current powers to a very significant increase in the cost of the insurance product. Evidently, so they advised—I am still seeking information on this—under the former government and in the two years under this government, they have been significantly subsidising the cost of their insurance offering by drawing on their reserves to keep the prices as they are at the moment.

They believe the quality of the product they have offered to their members has been sadly lacking in terms of quality of service. There have been a lot of complaints from public sector members. Again, I am working on the basis of a broad recollection of briefings going back over a period. If and when we get to the stage where we have to debate the pros and cons of this particular issue, we will have the opportunity to do so.

What I can say again and repeat is that it is a long bow to draw in relation to the Auditor-General's Report, but whatever happens I am advised that, if nothing changes in relation to the insurance offerings, the board has a strong view that they cannot continue to subsidise the current price of the product they have offered members for many years.

The Hon. K.J. MAHER: I refer to Part A, page 33, which shows that somewhere lower than 30 per cent of the $1 billion economic stimulus funds had been expended by 30 June. I have just a couple of questions on that. For the benefit of the Treasurer, I am not asking about the programs within that $1 billion or the amount of money allocated in particular years in relation to that program. What I am interested in is, is it the case that there is no central monitoring within government of that stimulus spending?

The Hon. R.I. LUCAS: No, I think that is possibly a misinterpretation of various answers that might have been provided over a period of time. It is Treasury's and my responsibility—

The Hon. K.J. Maher interjecting:

The Hon. R.I. LUCAS: I am not sure. That sounds like a euphemism for ICAC, but we are not allowed to talk about ICAC. I do not know; it might have been discussed in ICAC, but I am not in a position to comment. Putting that to the side—

The Hon. J.M.A. Lensink: Hypothetically.

The Hon. R.I. LUCAS: Hypothetically speaking, yes, my colleague says. If it was, the parliamentary privilege certainly protects me from anything I said. There have been a lot of questions asked in question time today about privilege, but one privilege that is undoubted is the privilege of the members of parliament in this chamber. Anyway, I will not be diverted.

What I am saying is that it is my responsibility, and the responsibility of Treasury, in relation to oversight and monitoring of stimulus spending. I will not waste the time of the committee—because I am sure the members want to get on to other questions with me and with other ministers—about the fact that this is a two-year stimulus program and we are not going to be spending all our money in the first three months, or six months, or nine months for that matter. It is programmed to be spent over the two-year period.

Where I think the misinterpretation comes is that I have said, and I think possibly Treasury officers have said, that we are responsible overall for the allocations of the program, but in relation to, for example, programs that are within Treasury's responsibility, clearly we have oversight of those. In relation to land tax, for example, we made allocations—I cannot remember; $50 million or something—for land tax, but given that the bills do not arrive until October, clearly none of that money was going to be spent, or very little of that money was going to be spent, prior to 30 June, which is the Auditor-General's Report, because the bills did not arrive until October, when they could claim 25 per cent of their land tax bills if they provided relief to commercial tenants.

That is our responsibility, but in relation to where we allocate funding, for example to the Minister for Health, about which there have been questions in this chamber earlier on—about maintenance funding for regional hospitals, I think it was, that was allocated—we allocate whatever it was ($10 million or $15 million) to the Minister for Health and it is then his responsibility in terms of the procurement exercise that he had to go through, as I understand it, or the regional health boards had to go through, in terms of the delivery of those particular services.

Treasury in that case would have a broad oversight, and we would obviously have broad oversight in terms of our account managers who work with Health, for example, of how those programs are going. Through that mechanism, we would have oversight, but in terms of the actual expenditure of the money, that is the responsibility of Health.

Very quickly, the easiest explanation is, for example, in relation to money we give to Education in terms of maintenance. We are giving $20,000 to $100,000 to every school in the state and $30,000 to every preschool in the state for maintenance. As I understand it, the way the process will work is the education department will actually allocate the funding to the school, and then it will be up to the principal and the governing council to spend that money within the 2021 calendar year.

Education will be responsible for the oversight of that particular program in terms of the expenditure. They will have to provide a report back to Treasury, ultimately, as to how that is going. But it is not the responsibility of Treasury officers or me, for example, to monitor each school every week or month as to how much money has been spent. It has been allocated. There is a requirement that they have to spend it within the calendar year of 2021, and there will be oversight by the education department. Treasury will liaise with the education department in relation to monitoring the oversight of the program.

The Hon. K.J. MAHER: That concludes our questions for Treasury.

The Hon. C.M. SCRIVEN: I refer to Part C: Agency audit reports, page 458, paragraph 5. Importantly, the SAHT has not yet completed its assessment of the condition of its housing stock. My question to the minister is: why has the South Australian Housing Authority not yet completed its assessment of the condition of its housing stock, which was started by the former Labor government in February 2018? What percentage progress has been made towards completion, and what is the date that you anticipate for a completed asset management plan?

The Hon. J.M.A. LENSINK: I thank the honourable member for her question. As she has identified, the program did commence in 2018, and it was scheduled to be completed in March 2021. I think in either 2016 or 2017 the Auditor-General identified that there had been no asset condition report done since 2003. The program is assessing the physical and structural condition of all Housing Trust properties over that three-year period and will accurately quantify existing capital maintenance liability and assist in forming a long-term capital maintenance investment program.

RTC Facilities Maintenance was selected to conduct the inspections. The value of the contract is some $4.4 million. In 2019-20, 26,703 inspections had been completed. The target was 29,500 but, clearly, COVID played a role in that because property access is an issue, but prior to COVID it had certainly been ahead of schedule.

The Hon. C.M. SCRIVEN: I do not think the minister answered the question of when you anticipate the asset management plan to be completed now.

The Hon. J.M.A. LENSINK: I said March 2021.

The Hon. C.M. SCRIVEN: Sorry, I misheard that, thank you. Of the $42.1 million allocated in the last budget for maintenance and capital works, is the minister aware of how much was spent as at 30 June 2020?

The Hon. J.M.A. LENSINK: What I can say in relation to that stimulus funding is that it has all been committed. My understanding of the $10 million stimulus is that it has all actually been expended. The honourable member would appreciate that in these programs there are often timed payments and invoicing arrangements, but the money has all been committed.

The Hon. C.M. SCRIVEN: But my actual question was: of the $42.1 million, how much was spent as at 30 June?

The Hon. J.M.A. LENSINK: To get that exact amount of money we will have to take it on notice. The honourable member would probably appreciate that working through a range of contractors there will be varying levels of efficiencies in terms of when they invoice us. We are required under Treasury guidelines to make sure that we pay all our businesses quite quickly, but organisations sometimes do not always invoice us in a timely manner, so we are reliant on all those organisations, companies and the like to actually get things in by a particular time. There are quite a number of variations in terms of how that takes place.

The Hon. C.M. SCRIVEN: In the Budget and Finance Committee, your chief financial officer said that expenditure was $5.8 million as at the end of June, so I will assume that that is correct. Did the minister's department inform her that they had only spent $5.8 million of the $42.5 million allocated?

The Hon. J.M.A. LENSINK: I think I would make a general comment that we have regular meetings and receive a lot of financial information from the organisation to keep us updated as things progress. I would also refer to my previous comments that the invoicing of various companies can be slow. Sometimes they will accrue a number of invoices before they will seek for those to be paid. So the number that the Labor Party has been excited about is really just a question of the timing of those things, but the money has certainly been committed and I think a large number has now been expended.

The Hon. C.M. SCRIVEN: For clarity, is the minister saying that, yes, she was kept informed—she knew—there was a spend of only $5.8 million instead of $42.5 million?

The Hon. J.M.A. LENSINK: I think the honourable member is misunderstanding how these things work, in that money is allocated but it does not mean that it is out the door by 30 June. Particularly when you are talking about building contactors, maintenance contracts and a range of things, I think it is entirely reasonable, and some would be things that would have required a level of approval through council as well. I think it is a little bit simplistic to have expected that that money would have been expended by 30 June.

I receive regular updates from the agency about where things are at, and I have certainly seen the level of activity at particular sites where there have been a large number of trades on site. There has been a lot of activity, which has been supporting the building trades, particularly during the COVID period. That was also reported to me directly when I was on site, meeting not just with the Housing Authority but with the companies that have been contracted, which expressed great gratitude that they had work that was keeping them going through that period, which is also really important to maintaining trade apprenticeships and traineeships through that period.

It is about a continuous pipeline of work. There is nothing worse for the building, construction and maintenance industries than to have a stop-start period. When the lack of certainty was taking place in the South Australian community, the South Australian Housing Authority had particular stimulus programs that were certainly supporting the trades.

The Hon. C.M. SCRIVEN: Thank you for that lengthy answer, even though it did not answer the question. Who exactly is responsible for making sure that promises are kept, money is spent and ensuring that homes are improved?

The Hon. J.M.A. LENSINK: Again, I think that is a fairly facile approach to these things. We have money that is allocated through a Treasury budget process. We have an agency that delivers through contracting arrangements and has to, where necessary, be involved in appropriate procurement processes, and then we have a whole lot of trades that are involved in being engaged in those processes.

As I have tried to explain a number of times already in this session, they will have a range of approaches to their particular invoicing and arrangements. There are a lot of moving parts in this particular space, but I can assure the honourable member that the stimulus measures have been very effective not just for supporting the trades but particularly for the tenants who have much improved amenity.

I can probably point the honourable member to some particular sites. We would have before and after photos, I think, which would amply demonstrate the huge value or, if I can take the lead of the Treasurer, the massive value that we have been providing to South Australian tenants and our trades through these programs.

The Hon. C.M. SCRIVEN: Was the Chief Executive of the South Australian Housing Authority and Andrew Atkinson summoned to meet with the Treasurer about their underspend of stimulus money and budget?

The Hon. J.M.A. LENSINK: The honourable member would know the Treasurer from her interactions with him. He is a benevolent human being and not in the practice of summonsing people.

The Hon. C.M. SCRIVEN: I think it is summoned not summonsed, as far I am aware. Are you saying that the Treasurer did not seek that meeting with the chief executive and Andrew Atkinson about the underspend?

The Hon. J.M.A. LENSINK: Clearly, there are regular meetings which take place between every agency and Treasury, but my agency chief executive advised me that he has never met with the Treasurer, apart from the BCC meetings we have, which are part of our standard cabinet and budgetary processes.

The Hon. C.M. SCRIVEN: I refer to Part C: Agency audit reports, page 459, board oversight. This shows that there has been no regular reporting to the board on capital works or sales programs, non-financial, until May. So the year was almost over by the time the board was reported to. There was also no regular reporting on community housing providers. In 2019, the Auditor-General recommended that the board be advised on the $2.7 billion of assets managed by CHPs, but this did not happen. Why was the South Australian Housing Authority board not kept informed about the management of the $2.7 billion of assets?

The Hon. J.M.A. LENSINK: The advice I have received is that there were reporting mechanisms in place, not necessarily in the format the Auditor-General believes they should have been done in, but there have been improvements to those processes. The advice is that the board has been kept informed.

The Hon. C.M. SCRIVEN: Is the minister saying that the Auditor-General was wrong?

The Hon. J.M.A. LENSINK: I would never say that the Auditor-General was wrong.

The Hon. C.M. SCRIVEN: Simply that he was not right, is obviously your evidence.

The Hon. J.M.A. Lensink: Don't put words in my mouth. Don't put words in my mouth.

The CHAIR: Order!

The Hon. C.M. SCRIVEN: Why did the chair and the CEO fail to execute their responsibilities and ensure proper and regular reporting to the board, unless, as I say, the minister is saying that the Auditor-General was wrong? Can she answer that?

The Hon. J.M.A. LENSINK: The honourable member has a particular way of engaging in these debates that I think she should have left in high school. I have responded to her question in that my advice is that the board has had reporting through to the board. There is a particular format that the Auditor-General has sought, and as a result the Housing Authority has changed some of those reporting arrangements.

The Hon. C.M. SCRIVEN: What were those mechanisms, and why was the Auditor-General unable to uncover them?

The Hon. J.M.A. LENSINK: I think if I can continue to characterise that the Auditor-General has sought that the reporting requirements be delivered in a particular format, and the advice I have received is that the Auditor-General has expressed a preference for a summarisation as a regular standing item of the board papers. The organisation has had specific and detailed reporting to particular board members, almost as a subcommittee, if you like, which has now been formalised into a working group, which is the reporting mechanism going forward.

The Hon. C.M. SCRIVEN: So is the minister saying that this reporting to individual members was not part of a formalised subcommittee until recently? Is that what she was saying?

The Hon. J.M.A. LENSINK: I think it would be inaccurate to describe the reporting in any way as informal. It has been more that there have been particular board members. There are seven board members in total, so it is quite a focused board in terms of it is not a huge number of people where things can get lost. Anybody who is interested in governance I think appreciates that if you have boards or any committee which gets too large then things can get lost.

Being a sharp board of seven people, there have been specific members who have had very detailed information which has helped to guide the organisation on these particular programs going forward. That has now been shifted to the working group structure, which provides quarterly reporting.

The Hon. C.M. SCRIVEN: I refer to Part C: Agency audit reports, page 318, National Disability Insurance Scheme. For the year 2019-20, what was the total utilisation of South Australian funds to the NDIS, and what was the total value of the underspend?

The Hon. J.M.A. LENSINK: Can you advise me which period you were asking about?

The Hon. C.M. SCRIVEN: It was 2019-20.

The Hon. J.M.A. LENSINK: It is probably important to note just technically that I do not think this is actually an audit question, but I do happen to have the information in front of me. The utilisation of commuted support in NDIS plans at 30 June 2020 for South Australia was 68 per cent, which compares nationally to 70 per cent. The figure that we have for the 2019-20 year in terms of the amount that was spent through the NDIS in South Australia is $1.4 billion approximately.

The Hon. C.M. SCRIVEN: Where do the underspent funds go in the following financial year, given they are not spent? Is it returned to the state or offset to the next year's funding requirements?

The Hon. J.M.A. LENSINK: The advice I have is that in the 2019-20 year the South Australian contribution to the National Disability Insurance Scheme was $777 million—it is more than $1.4 billion, but it is somewhere between $1.4 billion and $1.5 billion—and the amount that is expended over that is provided by the commonwealth government. There has been some underutilisation, which has led to underspends in previous years, but we are now reaching that figure that had been anticipated years ago.

The figure that I was quoted several years ago was that we had 16,000 South Australians under the old Disability SA services, which was projected to be 32,000. That figure is now over 37,000 South Australians receiving supports through the National Disability Insurance Scheme. The commonwealth is certainly now expending close to half of that as part of its commitment to the program.

The Hon. C.M. SCRIVEN: The minister I do not think has answered the question. Where there is an underspend, what happens to those funds? Are they returned to the state or do they stay with the state, or do they go to the commonwealth?

The Hon. J.M.A. LENSINK: We expend our amount. The commonwealth takes the risk for any over or underspend beyond that amount. In previous years, the state has received some funding back, but now that we are at full scheme the commonwealth has assumed the full risk for the other half. Now that we are both at full scheme and because the commonwealth is expending the other half in the sort of realm that was anticipated, the underspend is becoming a bit of a misnomer. It is hard to correlate that with the underutilisation, if you like.

If all participants expended their full plan amount, I would be guessing, but I suspect the commonwealth would be expending well over what the state contribution would be. That is the arrangement that was struck in terms of the fact that the commonwealth has taken on the risk for any overspend in the scheme and why the honourable member may recall that a few years ago there was some discussion at a national level about increasing the Medicare levy by, I think, 1 per cent to cover that expenditure. That is obviously something for the commonwealth government.

The Hon. C.M. SCRIVEN: Is the minister aware whether any South Australian member of the Disability Reform Council has expressed concerns in writing about adjustments of state payments relative to actual costs over time?

The Hon. J.M.A. LENSINK: I am not sure whether the honourable member understands what the Disability Reform Council is, but it is all of the ministers from various jurisdictions, so perhaps if she could repeat her question; I am not sure that I was following her logic.

The Hon. C.M. SCRIVEN: It is a simple question, whether the minister is aware of any South Australian member of the Disability Reform Council expressing in writing concerns about adjustments of state payments relative to actual costs over time.

The Hon. J.M.A. LENSINK: There are two South Australian members of the Disability Reform Council and they are myself and the Treasurer.

The Hon. C.M. SCRIVEN: So it appears then that the minister is unaware of a letter sent by the Treasurer on 29 August 2019 in regard to those things. Is the minister concerned that she was unaware of such a letter?

The Hon. J.M.A. LENSINK: Once again, the honourable member is putting words in my mouth.

The Hon. C.M. Scriven: I asked if you were concerned; that is not putting words in your mouth.

The CHAIR: Order!

The Hon. J.M.A. LENSINK: The Treasurer and I have discussions about these matters on a regular basis; in fact, we have a Disability Reform Council meeting tomorrow and he and I discussed the matter of the reserve fund as recently as yesterday.

The Hon. E.S. BOURKE: I ask the minister to go to Part C, page 166. The Auditor-General highlights that the Chief Executive of SA Health failed to comply with Treasurer's Instruction 8 in failing to review the financial delegations register. Has the minister directly spoken to the chief executive about this oversight?

The Hon. S.G. WADE: This is primarily an operational matter. The department responded that it was aware of the requirements, indicating the review was intentionally put on hold while it went through structural change. It also indicated that it advised the Department of Treasury and Finance of the breach of TI8 and was now undertaking the review.

The Hon. E.S. BOURKE: Just to clarify, has the minister spoken directly with the chief executive officer about this?

The Hon. S.G. WADE: It is a minor operational matter, which I would not have expected to be briefed on, and I understand the issue has been rectified.

The Hon. E.S. BOURKE: Is this not a basic requirement that a chief executive paid $561,000 a year should be on top of?

The Hon. S.G. WADE: I note what was effectively a comment.

The Hon. E.S. BOURKE: Should the chief executive receive counselling regarding the failure to comply with the Treasurer's Instruction?

The Hon. S.G. WADE: I would refer the honourable member to my earlier answer. The review was intentionally put on hold, and Treasury was advised. It was done for a reason and it was done with communication.

The Hon. E.S. BOURKE: I will now move to Part C, page 162. The Auditor-General made some critical remarks about the recent introduction of large panel contracts, such as a $680 million Patient Services Panel contract and a $300 million professional services contract. What specific concerns has the Auditor-General raised with the minister or his department about these contracts?

The Hon. S.G. WADE: I would refer the honourable member to the second paragraph on page 162, which basically summarises the Auditor-General's concerns. The department advised that it intended to work with the State Procurement Board to provide targeted training on these areas.

The Hon. E.S. BOURKE: The Auditor-General has said that there was no probity planned for the Patient Services Panel. Is this not of significant concern, given the extremely large sums involved in this contract?

The Hon. S.G. WADE: The Auditor-General raised a series of issues. The department identified a range of actions in response, indicating the fact that they see these issues as significant issues and are addressing them seriously. Again, I would refer the honourable member to page 162, which outlines those responses.

The Hon. E.S. BOURKE: Can the minister confirm whose decision it was to start rolling out these large panel contracts, and on what basis?

The Hon. S.G. WADE: I would highlight the point that the Patient Services Panel and the Professional Services Panel are involved in engaging a range of providers, a number of whom were already established providers to the department. It was the department's view that going to a panel procurement approach in these two domains helped the procurement process to be more efficient and effective.

The Hon. E.S. BOURKE: So this decision was by no one individual. Was it the decision of the general department, or can you specify who in the department it was who decided to roll out this large panel?

The Hon. S.G. WADE: I would highlight the point that procurement panels of this magnitude do not just happen with the whim of a pen. They are subject to detailed evaluation processes with skilled evaluation panels.

The Hon. E.S. BOURKE: I am happy to move to Part C, page 203. For the Central Adelaide Local Health Network, the Auditor-General has identified targeted voluntary separation packages amounting to $35 million paid to 293 employees. Can the minister confirm that 293 positions were made redundant in CALHN just last financial year?

The Hon. S.G. WADE: I do not have specific briefing papers on that issue, but in relation to the third dot point at the top of page 203 I would make the point that, as well as offering voluntary separation packages to employees, CALHN would have employed other employees. The honourable member needs to be mindful of the net impact of FTEs.

The Hon. E.S. BOURKE: I appreciate the minister does not have the information at hand, but if he could please take that on notice and provide that information. As a result of the 293 positions that were made redundant, were any of them frontline staffers?

The Hon. S.G. WADE: I make the point that a key criterion of TVSPs is that they did not impact on frontline services. There may well be health professionals amongst that number. They may be, for example, in back of house roles.

The Hon. E.S. BOURKE: Can the minister provide a further breakdown of those 293 positions? If not, can he take that on notice?

The Hon. S.G. WADE: I am happy to take the question on notice.

The Hon. E.S. BOURKE: Can the minister also undertake to provide on notice how many entry-level nurses could be employed over the forward estimates with the $35 million—unless you have the information available?

The Hon. S.G. WADE: The honourable member rightly highlights the point I was making just a minute ago, which is that the TVSPs need to be considered in the context of other employment opportunities, other employments that are being made during the year. I can assure you that SA Health is one of the most important graduate nurse employers in the state, and CALHN would be a very significant part of that.

The Hon. E.S. BOURKE: Have any voluntary separation packages already been offered and accepted in this financial year?

The Hon. S.G. WADE: I do not have that information.

The Hon. E.S. BOURKE: Could the minister please take that on notice?

The Hon. S.G. WADE: I would suggest that the honourable member's question relates to next year's Auditor-General's Report, not this year's.

The Hon. E.S. BOURKE: I can only try. I refer to Part C, page 170. The Auditor-General highlights several risks posed by the unsigned service level agreements between networks and boards, and notes SA Health indicates that they would provide service agreements for 2020-21 in September, expecting them to be signed shortly after. What were the risks as identified by the Auditor-General?

The Hon. S.G. WADE: Unsigned service agreements present the following risks: uncertainty over functions, obligations, expectations or performance deliverables; impeding the local health network governing board's legislative function to manage performance against the performance measures in the service agreement, as required by the Health Care Act; reduced accountability for specific service obligations and the performance requirements; and it conflicts with the National Health Reform Agreement, which requires service agreements.

I think this refers back to a conversation we were having yesterday in the context of the Health Care (Governance) Amendment Bill. This department does acknowledge that there was a prolonged service agreement negotiation throughout the year, and whilst not all service agreements were signed in 2019-20, it had set and communicated the budget for each local health network clearly and transparently.

In my comments in the context of the bill yesterday, I alluded to the fact that there was significant concern amongst the boards in the previous financial year about the template, if you like, for the service agreements, and the department respectfully responded to that and significant work was done. I think they would be humble enough to say that they were much more collaborative in the second series than the first. This is an evolution. This is a work in progress.

The Hon. E.S. BOURKE: I am happy to move to Part C, page 240. The Auditor-General found that in the Northern Adelaide Local Health Network inappropriate approval of some direct negotiation procurement occurred. Can the minister provide further detail as to the nature of those inappropriate approvals?

The Hon. S.G. WADE: My reading of the Auditor-General's Report is that the nature of the inappropriate approvals was that the procurement should have been approved by the chief executive, and I presume therefore that they were not. The response from the Northern Adelaide Local Health Network was that advice from the Department for Health and Wellbeing's procurement and supply chain management unit was that due to SA Health's changing requirements, including a move forward towards electronic record keeping, the project to secure a whole-of-health printing contract may not now proceed.

NALHN also advised that it had arranged fixed pricing from various printing suppliers and would be incorporating those prices into its purchasing system. It also intended to move to a different model for document management services and also provide procurement and contract training sessions, reinforcing the duties to relevant managers.

The Hon. E.S. BOURKE: On Part C, page 162, the Auditor-General highlights that there were several instances of contracts being executed after their commencement dates. On how many occasions did this happen and/or for what specific contracts?

The Hon. S.G. WADE: I cannot give the honourable member the number. I will take that question on notice.

The CHAIR: The time has expired for the examination of the Auditor-General's Report.