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House of Assembly - Fifty-Third Parliament, First Session (53-1)
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Auditor-General's Report

Auditor-General's Report

In committee.

The CHAIR: The first half hour is dedicated to the Premier. Do you want to make a statement?

The Hon. J.W. WEATHERILL: Just to announce that with me is Mr James Hallion, the Chief Executive of the Department of the Premier and Cabinet, Mr Steven Woolhouse, Director of Finance, Department of the Premier and Cabinet, and Mr Jake Loulas, Manager of Finance, Department of the Premier and Cabinet.

The CHAIR: Leader.

Mr MARSHALL: My question relates to Part B, Volume 4, page 1378, Overseas travel. The Auditor-General highlights:

A review of overseas travel found that the Department had not prepared any monthly returns for the Minister detailing overseas travel undertaken, as required by Commissioner's Determination 3.2.

Why didn't the department complete its monthly overseas travel returns?

The Hon. J.W. WEATHERILL: The travel to which this observation is directed, I am advised, is travel that was undertaken by the Agent-General in London. The department is advised that Commissioner's Determination 3.2 does not require the preparation of monthly returns by the Agent-General, and that is confirmed by crown law advice. But we are waiting for further advice from the Commissioner for Public Sector Employment in relation to that matter. It refers to a commissioner's determination, so we are seeking clarification from the Commissioner for Public Sector Employment.

Mr MARSHALL: Why does the Premier assert that this matter raised by the Auditor-General is related only to the Agent-General? It states quite clearly:

A review of overseas travel found that the Department had not prepared any monthly returns for the Minister detailing overseas travel undertaken…

The Hon. J.W. WEATHERILL: As I said before, the overseas travel in question largely relates to the Agent-General, although a process to prepare monthly returns required by the commissioner's standard will be established by the business performance and strategy unit for the upcoming financial year.

Mr MARSHALL: Is the Premier advising that the reason he knows that it relates only to the Agent-General is that there have been discussions? I am not trying to be difficult but it is very unclear. It seems to me that the Auditor-General is quite clear that the department had not prepared any monthly returns for the minister detailing overseas travel. What is it that makes the Premier think that it is related only to travel relating to the Agent-General?

The Hon. J.W. WEATHERILL: The advice is that it is largely due to the travel of the Agent-General, but it is worth bearing in mind that the travel is reported in the annual report. What is now going to occur in the future is that the process of preparing monthly returns as required by the commissioner's standard will now be put in place.

Mr MARSHALL: Does the CEO sign off on all overseas travel?

The Hon. J.W. WEATHERILL: Yes, the chief executive does, but for all travel except for the travel engaged in by the Agent-General.

Mr MARSHALL: Has DPC since completed returns, given the Auditor-General's advice?

The Hon. J.W. WEATHERILL: That goes to the answer to the earlier question. We are still awaiting the advice from the commissioner for public employment about the scope of that return so, for instance, if the advice comes back, which is consistent with our crown law advice that the Agent-General is not within the scope of the monthly return, then obviously they would not be included, but if they are, then they will need to be included.

Mr MARSHALL: Why has the Premier appointed his own international relations adviser, Andrew Hunter? What is the cost to government of this position?

The CHAIR: Is that still under overseas travel?

Mr MARSHALL: Yes. What is the cost to government of this position and what is the expertise of Mr Hunter relative to this position?

The Hon. J.W. WEATHERILL: Mr Hunter is a ministerial adviser. He is an adviser just in the same way as I have advisers for all of the areas of responsibility I have as Premier. Obviously one of the particular responsibilities I have is engaging in the international relationship, so he supports me in that role.

Mr MARSHALL: Wasn't the international office transferred to the Department of State Development? Is this a new position in DPC?

The Hon. J.W. WEATHERILL: No, Mr Hunter is just simply a ministerial adviser. It is no more or less than the ministerial office complement I have, including chiefs of staff and various policy advisers. He is a policy adviser, not a public servant.

Mr MARSHALL: My question relates to Part C, page 17. The dot points mention procurement reform and I would just like to ask some questions there. The government signed a contract with Carlson Wagonlit for a three-year period commencing 1 February 2014 for across-government travel management services for $22.5 million. The government also has a one-year contract for across-government airline services also commencing on 1 February 2014 for $56.2 million. How do these two contracts compare with the equivalent previous contracts?

The Hon. J.W. WEATHERILL: This is a question that falls in the area of responsibility of the minister for public employment, so I will invite you to direct your questions to her about that matter.

Mr MARSHALL: I have some questions with regard to the caretaker period. My reference there might be Part C, page 60, which refers to the state election in paragraph 3. What was the meeting hosted by your office in March 2014 on which $488 was spent?

The CHAIR: Can you just help the table, leader: we can't find your page 60.

Mr MARSHALL: We are talking essentially about expenses. There are a number of references I could give you.

The CHAIR: We are looking at Part C, page 60, and we cannot see what you are talking about, if you could assist us.

Mr MARSHALL: There are many references I could give you but that is certainly one that refers to the state election.

The CHAIR: This talks about five public-private partnerships.

Mr MARSHALL: I am happy to find another reference for you.

The CHAIR: I'm sorry, we just can't see it.

Mr MARSHALL: Let's choose one of the expenses areas. If you look at Part B, page 1386, my question is: what was the meeting that was hosted by your office during the caretaker period in relation to which $488 was incurred?

The Hon. J.W. WEATHERILL: I will take that question on notice and bring back an answer.

Mr MARSHALL: In a similar vein, who was being farewelled in March 2014 at the Wakefield Hotel at which $400 was spent?

The CHAIR: We cannot see that either. We are in Part B. Where are you looking in Part B?

Mr MARSHALL: Expenses.

The CHAIR: Yes, which bit? Those figures, of course, are contained in another figure. Which figure are you looking at? Supplies and services?

Mr MARSHALL: Are you seriously asking me that question? This is an expense incurred by the government during caretaker mode. It is not disaggregated in any further detail than that. I think it is a pretty easy reference, quite frankly.

The Hon. J.W. WEATHERILL: I will take that question notice. I understand the member is referencing the proactive disclosure website where we publish items of our credit card expenses. What they have to do with the Auditor-General's Report I do not know, but I am more than happy to bring back an answer.

Mr MARSHALL: On the matter that the Premier has just raised in regard to credit card expenses, we note that the CEO, Mr Hallion, was on official business in Sydney staying at the Radisson on 7 March, again in caretaker mode, and at the Sofitel on 28 February, at a total accommodation cost of $653. Can you advise the house what he was doing on that visit in caretaker mode?

The CHAIR: To help us, is that actually mentioned in here anywhere, or is it just in a figure that you have information about separately?

Mr MARSHALL: Yes, that is right.

The CHAIR: It is in information you have separately?

Mr MARSHALL: It is under 'other expenses'.

The CHAIR: I know, but you have information on that particular detail.

Mr MARSHALL: It is published on the Premier's website.

The Hon. J.W. WEATHERILL: During the caretaker period the government still operates. Senior officers attend Canberra, attend senior officers' meetings and carry out the business of government, consistent with caretaker principles. I am advised that, to the best recollection of the chief executive, he was there on a senior officers' meeting concerning COAG.

Mr MARSHALL: Part B, Volume 4, page 1376 refers to the population and migration policy unit being transferred to the Department for Manufacturing, Innovation, Trade, Resources and Energy, and it gives us a date for that. What does the Premier believe should be done to increase South Australia's 3 per cent share of the 457 visa program?

The Hon. J.W. WEATHERILL: That is not germane to this and it is a matter for the relevant minister. I ask you to direct your questions to him.

Mr MARSHALL: On page 1396 of the same volume, the second line under 2.6 mentions the emergency services levy. Can the Premier outline to the house what the Department of the Premier and Cabinet's ESL liability in 2013-14 was?

The Hon. J.W. WEATHERILL: We will take that question on notice and bring back an answer.

Mr MARSHALL: Can the Premier advise what is budgeted for the upcoming year, and can the Premier advise whether DPC has had the remission on the ESL removed?

The Hon. J.W. WEATHERILL: Questions were asked of the Treasurer in question time about that very matter. He took the questions on notice and he will bring back an answer.

Mr MARSHALL: In the Auditor-General's Report Part C, page 24, under 'Concluding observations', the Auditor-General refers to commonwealth budget reductions. I would be keen to ask the Premier about the state government's campaign against these commonwealth budget reductions. Can he advise the house what the total budget for this program is?

The Hon. J.W. WEATHERILL: Yes, the Federal Cuts Hurt campaign is directed at resisting the $898 million budget cuts from the commonwealth and the $5.5 billion in cuts over the next 10 years. We said during the last election that we would campaign against these cuts. We warned about them; even we, I do not think, could have anticipated their severity, but we certainly warned cuts were on the way. Once they emerged, we committed to campaign against them, and so we budgeted $1.105 million for this campaign, and the campaign was launched on 24 July this year.

Mr MARSHALL: Can the Premier outline to the house how much of that budget has already been spent and how much remains?

The Hon. J.W. WEATHERILL: I have to take that question on notice. I do not think we have that number with us.

Mr MARSHALL: Could the Premier at least outline whether there is any further expenditure in that area and whether there is any future media placement schedule in place.

The Hon. J.W. WEATHERILL: Yes, we fully expect there will be further expenditure. I do not think we have fully exhausted the campaign budget to this point. It certainly is our intention to recommence the media campaign. I took the decision that it was not proper to pursue it during the period in the lead-up to the by-election and, should there be a further by-election, in the lead-up to any further by-election, but we certainly will be getting back onto that at an appropriate time.

Mr MARSHALL: Will that be additional money to the $1.105 million budget the Premier has previously outlined to this committee?

The Hon. J.W. WEATHERILL: No, I do not think there is any intention to spend more than the budgeted amount, but I also do not rule out the possibility of doing that, given the nature of the ongoing cuts and the threats that are emerging to South Australia at the hands of the commonwealth. We have an unprecedented attack on South Australia from the commonwealth—something in the order of $900 million in relation to cuts to automotive assistance, which bear dramatically on South Australia.

Obviously, the $898 million in cuts are shared across the whole nation, so not particularly separating out South Australia, but then there is a very dramatic threat to South Australia's interests which may emerge because of the decision to breach a promise to build 12 submarines here in South Australia. There are many threats on the horizon. We have to defend ourselves. I said I would stand up for South Australia and I am delivering on that promise.

Mr MARSHALL: Can you outline to the committee what the requirements are for approval of government advertising, if any, that the Auditor-General or other bodies need to approve before the government goes ahead with government advertising?

The Hon. J.W. WEATHERILL: There is a committee called PCAG—I would love to know what acronym means but, take my word for it, that is what it is. It reviews government advertising in accordance with standards that are set by various agencies within government.

Mr MARSHALL: Do they review government advertising or do you need to seek approval from PCAG before the advertising proceeds?

The Hon. J.W. WEATHERILL: I am advised that it is an advisory body to ensure that proper processes have been established for the placement of government advertising.

Mr MARSHALL: You are not sure, Premier, what their process is. Do you take a suggestion for advertising to PCAG and they approve it, or do you, once a year, provide a report, and they review that report? Have you taken anything with regard to this current campaign that we are talking about to this committee, and what has their response been?

The Hon. J.W. WEATHERILL: It is called the Premier's Communications Advisory Group, so any campaign like this would be taken to that group for advice about whether it needs proper standards. It routinely does things such as giving exemptions for schools that might be wishing to promote a new brand from the common branding. It supervises, if you like, standards and policies in relation to government advertising or the way in which the government represents itself to the broader community.

Mr MARSHALL: Who sits on the PCAG at the moment?

The Hon. J.W. WEATHERILL: I will take that question on notice and bring you back the answer.

Mr MARSHALL: Can the Premier advise whether the current program we are talking about did go to the PCAG and on what day they provided their approval or review?

The Hon. J.W. WEATHERILL: I will have to bring back an answer to that question.

Mr MARSHALL: Are there any further reviews, or is there any requirement for the Auditor-General to look at the suitability of any government advertising?

The Hon. J.W. WEATHERILL: The Auditor-General is entitled to look at whatever he wants to look at in terms of government expenditure and, this being an item of government expenditure, it is within his remit to ask questions and make observations about it.

Mr MARSHALL: Budget Paper 4, Volume 4, page 1406, where we have a list of the remuneration of people in your department: what was the value of the termination payment received by the employee in the $531,000 to $542,000 salary bracket, and what was the reason for the termination?

The Hon. J.W. WEATHERILL: The relevant employee occupied the position of Chief Officer, Field Services, SafeWork SA, an ASO8 position. The employee was 59 years of age, with 42 years of service. The TVSP component was $265,000, leave entitlements were $125,000, remuneration for 2013-14 was $150,000—

Mr MARSHALL: And the reason for the termination?

The Hon. J.W. WEATHERILL: —and the total remuneration was $540,000. The reason, being a TVSP, must have been a voluntary separation.

Mr MARSHALL: What is the name of that employee?

The Hon. J.W. WEATHERILL: I do not think that we generally provide the names of employees to protect their privacy, so I would be loath to do that unless it was germane to the observation.

Mr MARSHALL: My next question relates to Part B, Volume 4, page 149, towards the bottom of the page, under note No. 19. Why was there an advance of $18.7 million received by the Governor's Appropriation Fund?

The Hon. J.W. WEATHERILL: Can you repeat the reference?

Mr MARSHALL: Page 1409.

The CHAIR: Page 1409? We thought you said 149. So, Part B, Volume 4, page 1409.

The Hon. J.W. WEATHERILL: I am sorry, we are going to have to take that question on notice.

Mr MARSHALL: When you are doing that, if you could also just explain how that Governor's Appropriation Fund operates, what it is used for, and whether or not that money needs to somehow be repaid to the fund.

The Hon. J.W. WEATHERILL: We will take the second part of that question on notice.

Mr MARSHALL: I will move on to the next question, which relates to Part B, Volume 4, page 1421, where it lists the members of boards and committees. What annual saving has been locked in from the abolition of boards and committees as proposed by the government?

The Hon. J.W. WEATHERILL: The Mid-Year Budget Review boards and committees savings target is $1.3 million in 2013-14, the same for 2014-15, $1.4 million in 2015-16. The last two years of the forward estimates is $1.4 million. So, $1.3 million, $1.3 million, $1.4 million and $1.4 million.

Mr MARSHALL: When you say 'locked in to the Mid-Year Budget Review', that is the one that will be released in December?

The Hon. J.W. WEATHERILL: No, I'm sorry; that is the 2012-13 Mid-Year Budget Review, which first mooted this savings initiative.

Mr MARSHALL: Okay, so you worked out in 2012-13 what the savings would be. What did you base that on, considering that the review into the efficacy of those boards and committees had not been done?

The Hon. J.W. WEATHERILL: We made an estimate about what we thought we could achieve by way of savings through the rationalisation of boards and committees.

Mr MARSHALL: How accurate was that estimate, given that it was done two years before your investigation into this area?

The Hon. J.W. WEATHERILL: Chair, it depends on the Leader of the Opposition's attitude to our bill that we will be promoting to the parliament, in how much of it is successful. We think we should exceed that target if we are able to get the legislation through in the fashion that we are promoting it.

Mr MARSHALL: The Premier refers to it as a target; is he saying that he set a financial goal for the review of the boards, rather than an efficacy scope?

The Hon. J.W. WEATHERILL: No, the two things are different. The first thing is that we had a boards and committees savings target. The twin motivations for choosing, really, if you like, a day on which all the boards and committees may disappear unless they could justify their existence was, firstly, to try to drive that process to make sure that we did achieve those targets, but we also then added to that an additional ambition because we could see some real benefits in terms of renewal.

After the election, we had been renewing obviously our cabinet and our Public Service, and we also thought it was appropriate to review some of our structures. In a sense, the ambitions about the exercise had grown out of a simple savings exercise into a more thoroughgoing review of boards and committees. While the original purpose was a savings purpose, it really morphed into a broader purpose about the renewal of the governance arrangements of our various boards and committees.

So, it is both things. It is obviously a savings exercise, but we think we will exceed that. That is not the principal motivation for the additional rationalisation of boards and committees, because some of those boards and committees obviously create expenses in the way in which they do their work and the abolition of them will save some money, but we cannot leave behind some of the tasks that they were performing, which is essentially communicating and giving advice to government, it is just that we may wish to get our advice in different ways. We might go out to the community in different ways, which itself will incur its own expense.

Some of the boards and committees were advising government in one way but, rather than a small group of select people getting an ear of government, we want to get a broader group of people engaged in different ways using social media and other techniques to engage a broader cross-section of people. That will itself cost money, but it will—

Mr Marshall: Citizens' jury.

The Hon. J.W. WEATHERILL: Of course. A citizens' jury is a good example of a different way of engaging with the community which also costs money, but there will be savings regarding some of these more old-fashioned ways, if one likes to put it that way, of providing advice to government.

The CHAIR: The time having expired for the Premier's examination, I thank the Premier and his advisers and call the Attorney-General and Deputy Premier to begin the examination of his line.

The Hon. J.R. RAU: I am here with Mr Swanson and Mr Persse.

Ms CHAPMAN: In opening, I thank the Attorney for his Attorney-General's Report which was also filed today. I notice that page 57 says that the measure on SACAT is 'substantially complete'. Thank you for that report; I will have a good look at it.

Back to the Auditor-General's Report, the Attorney-General's division is page 152 of Volume 1. This sets out the first part of the report in respect of the department. As you have your chief executive next to you, I notice that one of the aims of your department is to 'be a high-performing organisation', then I read the next three pages which tell me what lack of diligence there has been in the application of management of a number of processes.

It is very disappointing, firstly, Attorney, that there has not been some response to the repeated failure to comply with Treasurer's Instructions 2 and 28 particularly which, as you know, require the documentation and review of policies. It does not appear that the Auditor-General has identified any form of maladministration as a result of that; nevertheless, it is rather sloppy. I would have thought that, if you are aiming to be a high-performance organisation, there would be some significant improvement next year.

I go specifically to page 155 first. I will miss the first few pages of criticism, but come to the review of the fraud and corruption policy and plan. This tells us again that there has been no approval of the fraud and corruption framework since October 2012. It was due again for review in September 2013 and, as for the fraud and corruption plan, that had not been updated since 2010. The response published indicates that by December 2014 you are going to have the plan and the program updated, but I will just go back to the preceding paragraph which refers to the fraud and corruption framework. At the time of this audit it was with the chief executive who is here today. Can you tell us whether, in fact, it has been improved and is it implemented?

The Hon. J.R. RAU: I am advised that the department believes it is on track to comply with the December 2014—

Ms CHAPMAN: That is not what I asked you. What I asked you was regarding the preceding paragraph. The Auditor-General was telling us that at the time he did his audit that framework, as distinct from the fraud and corruption plan, was with the chief executive for approval, and I am asking you if that framework has now been approved and is it operational?

The Hon. J.R. RAU: I will take that on notice and get an answer.

Ms CHAPMAN: As the Attorney has the chief executive sitting next to him, could he ask him whether or not he has actually approved this framework even if it is not operational? I appreciate him taking that on notice, but has it been approved?

The Hon. J.R. RAU: I am advised that the chief executive has not approved it because there were some questions about the matter that he thought needed to be answered and it has been referred back to the Audit and Risk Management Committee.

Ms CHAPMAN: Has there been any correspondence and communication to the Auditor-General that it has not proceeded to approval?

The Hon. J.R. RAU: We will have to check.

Ms CHAPMAN: If, in fact, there has been some communication and it is available, will you make it available to the committee?

The Hon. J.R. RAU: I do not know what that communication is if it exists but, as I said, I will get you an answer to the question. As to the communication, I am not sure what the situation about that is, but I will get an answer to your question.

Ms CHAPMAN: It is an ongoing concern because, as I now move to the victims of crime fraud, which has a special fund for fraud of the fund and which was given special attention at page 160, again as part of the process of reviewing how presumably the fund would not be ripped off with another million dollar fraud you have implemented certain policies, or your department has. The Auditor reports, notwithstanding significant delays in implementation of a number of plans, at point 5:

Since March 2014, different staff are required to approve the assessment and payment in Basware, in addition to the segregation of duties with regard to other internal processes.

I am assuming from that that the way to manage this and to protect against a future fraud is to make sure the person who is approving is not the same person who writes the cheque out of the account and that there is a segregation of duties. Could you just explain what that situation is?

The Hon. J.R. RAU: Yes, I thank the member for Bragg for that question. Just to put it into a bit of historic context, we need to remember here that this fraud was actually detected by AGD itself. It was not something detected by an external agency. It was one of AGD's own staff who was vigilant enough to pick this up and blow the whistle on this thing.

Ms Chapman interjecting:

The Hon. J.R. RAU: No, I am just saying I think we need to pay tribute where it is due. The people within our AGD—and one staff member, in particular—showed a great deal of commitment and courage in taking this matter up. Anyway, that is historic now.

Since the discovery of this back in August 2012, the Crown Solicitor's Office began implementing alternate procedures for processes relating to victims of crime claims, and I am advised that these procedures were made in consultation with PwC and were progressively implemented and finalised in March this year. The instances noted by audit would appear to be part of the old process, I am advised.

It should be noted that since August 2012 there have been a significant number of separate controls implemented in the CSO other than segregation controls. In relation to the new procedure finalised in March 2014, audit identified two instances where the checklist form had been completed but not signed. Staff have been reminded to sign the checklist form as evidence of the check, and audit did not raise any other aspects of the checklist and new procedure.

Independent CSO staff members not involved in the VOC processes are currently reviewing a number of randomly selected VOC payments. The internal review will examine payments made against the new VOC procedure. It will focus on key control points and general compliance with the policy, such as segregation of duties within the process. The review will be finalised by the end of the month, meaning October.

Ms CHAPMAN: That is the review that is occurring where it states, 'The first internal review will occur in September 2014.' That is not finished yet, is that correct?

The Hon. J.R. RAU: Correct.

Ms CHAPMAN: That is due at the end of the month?

The Hon. J.R. RAU: Correct.

Ms CHAPMAN: Will you be reporting to the Auditor-General as to what the outcome of your review is?

The Hon. J.R. RAU: Certainly, that information will be available. There is no reason to conceal whatever comes out of that. On reflection, it might not be a bad idea if perhaps not me but the department dropped him a note saying, 'Here is what we have done and here is what the outcome has been.' I do not see any problem with that.

Ms CHAPMAN: Apart from the segregation of duties, which is the specific control that has been put into place in March this year, what else has been implemented? You say that there have been a number of other processes implemented, but there is nowhere that is identified. You have responded to the fact that the Auditor-General thinks you have only done this new segregation of duties initiative since March, and you are suggesting it predates that. In any event, what else is there?

You might remember, Attorney, that once this had been exposed you commissioned a report from Pricewaterhouse to help with an understanding of what happened to make sure it would not happen again. We have asked a number of questions about that report—it has never seen the light of day, it has never been tabled, it has never been produced, and it has never been sent to us. Yet each year since this has occurred—and we are talking another two years down the track—it is still a mystery as to what else you have done in your department to make sure this does not happen again.

The Hon. J.R. RAU: I appreciate the question being raised. I am advised, basically, that the specific nature of the new controls is, in the opinion of the Crown Solicitor, something in the nature of checks and balances that are in place to reduce the risk of fraud, and the nature and matters covered. The recommendations are such that to make them public would, in effect, make it easier for somebody to get around those controls. It is one of those things that, if you identify every weak spot in a secure premise and put a big spotlight on it, then presumably they are the places people go if they wish to get in without being noticed. It is the same thing with this.

I say to the member for Bragg that it may be that there is more information that I would be able to share with the member for Bragg on an in camera, confidential basis, to satisfy the member for Bragg personally. I am not saying the question is unreasonable. It is just that there is a material difference between a confidential conversation with the member for Bragg and a public disclosure of what might be very clever and shrewd anti-avoidance mechanisms.

Ms CHAPMAN: For the moment they are secret, so can you explain to us why they were not introduced before March 2014? If any of these were actioned before March 2014, can you tell us when?

The Hon. J.R. RAU: I would have to get back to you on that.

Ms CHAPMAN: Attorney, this has been going on for two years. You have the head of your department sitting next to you and you have read this report. Clearly, it has been a concerning matter for the government. You say it has been exposed, yet you cannot even ask your senior people as to what has been implemented. If you want to keep the exact details confidential at this point, I am happy to accept that, but we are two years down the track, after something has been identified, and you have had advice. That report has to have been around for at least a year. What is going on?

The Hon. J.R. RAU: I appreciate the member for Bragg's question. On the surface, the question that she asks is quite a reasonable question, but let us remember a couple of things here. There are certain matters before the courts presently which are directly related to this matter; they have not yet fully resolved, as I understand it. One matter is awaiting sentencing, as I understand it. But secondly and more importantly, my inquiry of the chief executive suggests to me that he does not have at his fingertips the detail that the member's question requires, and understandably so, because the member could have asked about any number of things. This is quite a specific and detailed question about—

Ms CHAPMAN: I ask you about this every year.

The Hon. J.R. RAU: I know. We were hoping that things might have changed this year, so we prepared for something else. It is terrible, is it not, that you prepare for the wrong thing.

Ms CHAPMAN: Tell me what you prepared for and I will ask something about that.

The Hon. J.R. RAU: I am not going to tell you; you will have to find out. To be serious about it just for a minute, the position is that I would like to be sure that the answer I give to the parliament is as accurate an answer as possible.

Ms CHAPMAN: I think that is what you said last year. In respect of the current fraud, in any event, what is the total fraud now identified in the sense of moneys lost?

The Hon. J.R. RAU: I can answer this one. I am advised that the total sum paid from the Victims of Crime Fund in relation to the offences is in the order of $1.06 million and involves 26 separate transactions.

Ms CHAPMAN: How much has been recovered?

The Hon. J.R. RAU: I thought you were going to ask me that next, and I am going to ask whether we have that. I am advised that that is a work in progress. Some assets have been seized. Just to explain, the perpetrators of this fraud acquired various assets, presumably with the proceeds of the fraud, things in the nature of, I think, real property and perhaps very fancy vehicles. So, what has happened is that these things have been seized and, in order to recover funds, there is a process that needs to be gone through. Ultimately, those things being proceeds of crime in a direct sense, I assume, they would be capable of being realised through some process and the moneys returned ultimately back to the AGD.

I can also indicate that the South Australian Financing Authority insurance, which is SAICORP, has been notified of a potential claim for the recovery of moneys by the Victims of Crime Fund and the insurance arrangement will require the AGD to pay a maximum of $10,000 in respect of each claim.

Ms Chapman interjecting:

The Hon. J.R. RAU: Yes, but every effort will be made ultimately to recover what is available.

Ms CHAPMAN: You are satisfied that you have sufficient assets or equity in assets under injunction to be able to recover what you are owed?

The Hon. J.R. RAU: No, I was not saying that at all. I am saying that we will do our best to recover what we are owed, but one of these miscreants has apparently departed for different climates, and is a little bit difficult to get hold of, and I am not exactly sure whether the assets that we have will be sufficient when realised to cover off the cost. We will do our best.

Ms CHAPMAN: I have some questions on Volume 6, page 2262.

The Hon. J.R. RAU: Gillman?

Ms CHAPMAN: Yes, unsurprisingly. The Gillman site transaction is at about point 4 on that page. My question is: has the audit provided the formal management letter to the URA that was being finalised at the time of writing that report; if so, what does it say?

The Hon. J.R. RAU: I will have to get some instructions on that matter.

Ms CHAPMAN: Instructions from?

The Hon. J.R. RAU: From URA or Renewal—somebody who knows the answer to that question. Off the top of my head, I do not know the answer to that question, but I will find out.

Ms CHAPMAN: There are no advisers here in relation to the URA?

The Hon. J.R. RAU: No, unless they are outside.

Ms CHAPMAN: I know it is very unusual for the annual reports for the URA or Renewal SA to be done on time. It is a bit of a novelty, I accept that but, given that it was this year and the Auditor-General has done a report on it, it is usually appropriate, Attorney, that you have your persons here to be able to answer questions on Renewal SA. Do you want to schedule another time for that?

The Hon. J.R. RAU: That is a very tempting offer, but I will just get back to you with an answer. I will undertake that.

Ms CHAPMAN: I will run through a couple of others.

The Hon. J.R. RAU: Please do.

Ms CHAPMAN: What documents were supplied to the Auditor-General to allow him to reach his findings published in this report and, in particular, were cabinet submissions included? Next, the report confirms that cabinet considered the deal on 2 December. Did the cabinet consider the matter at a prior meeting and, if so, what was cabinet's decision at the prior meeting? I am sure you are the only person who can answer that question.

The Hon. J.R. RAU: I may be the only person who can answer it, but I am also not allowed to.

Ms CHAPMAN: The report here suggests that there was consideration of this matter on 2 December: cabinet approved ACP's offer. That is a fact; that is there. I am simply asking whether cabinet approved the ACP offer prior to that date. That is obviously what you told the Auditor-General.

The Hon. J.R. RAU: There is a bit of a thing about not talking about what goes on in cabinet, and I honestly do not have sufficient recall of each individual meeting to be able to answer with any confidence, other than to say that, if the Auditor-General said the final decision was on 2 December, that accords with my memory, or the decision. I think that is about as far as I can take it.

Ms CHAPMAN: Why did the final deal with ACP only involve the sale of up to 407 hectares, which is referred to in the report, and not the 450 that was indicated in the initial approach to the Premier?

The Hon. J.R. RAU: Just so that I can be clear on that question, if I am understanding correctly, the member for Bragg is asking me why it was that, at the point of the tentative option crystallising, it crystallised in respect of 407 and not 450. I will find out the answer to that question.

Ms CHAPMAN: Why was a probity auditor only appointed to oversee the deal in October, when the unsolicited bid was received in June and discussions were held between the government and ACP before October?

The Hon. J.R. RAU: As I recall, these are all questions that have been asked in the parliament in question time, but I will review those questions and those answers and, if there is anything further I can add, I will.

Ms CHAPMAN: It will not take long, Attorney, because you did not give any answers: you took a hell of a lot on notice, so we are still waiting. In the course of the Auditor-General's assessment of this—and you may not know this, so I accept you may want to get an answer on this from your officers—was there any information provided to the Auditor-General, or did he ask for information as to why the probity adviser was only appointed, as I say, after October?

The Hon. J.R. RAU: I would have to seek advice about that matter.

Ms CHAPMAN: If there was any communication in respect of that issue—that is, the appointment of the probity adviser, which I would have thought the Auditor-General would be very interested in—will you make any correspondence in respect of that available to the committee?

The Hon. J.R. RAU: Again, I am in this difficult position of not knowing whether such a thing exists or what it is, if it does exist. It is not really possible for me to give a commitment of that type, but I will attempt to answer the question.

Ms CHAPMAN: Let me ask you this question: if you make an observation or are provided advice not to release any documents that are within this category of the matters I have raised today, will you at least report back to the committee to confirm that you will not and some explanation as to why not? I accept that there may be circumstances where you will have advice not to produce material, and it may be for different reasons, but will you at least report back to the committee that position?

The Hon. J.R. RAU: That does seem a reasonable request, on the face of it, the member for Bragg has just made. I do not know if there is such material, if it does exist and if for some reason it is not appropriate for it to be released. I am mindful of the fact that there are still questions of intellectual property and questions of commercial sensitivity. In addition to that, there are two parties having a bit of a contest down at Victoria Square presently, which is an ongoing matter. There may be a number of reasons why that is a bit complicated, but I will certainly do my best to accommodate that request.

Mr GRIFFITHS: I refer to Volume 4, page 1350. I am particularly looking at paragraph A8—supplies and services, planning fees identified for the 2013-14 year of $1.175 million. Do you have a breakdown of what the costs of that are? I am particularly interested in whether that includes costs that were devoted towards the Expert Panel on Planning Reform?

The Hon. J.R. RAU: I have identified the item, but is the question whether that number includes expenditure in relation to the expert panel exercise?

Mr GRIFFITHS: And do you have a breakdown available that you are able to provide to me?

The Hon. J.R. RAU: No, I do not have that with me now, but I will seek to obtain it for the member. I will also seek an answer to the other question—if you get the first, you will get the second because it will say.

Mr GRIFFITHS: Jumping just a few pages to page 1355, I note the payments made to the South Australian government and to non-government organisations. I presume that most of the non-government would probably be related to local government when it comes to the Planning and Development Fund. There has been a bit of a switch there. There was a significant increase to SA government payments of $2.3 million—from $8.7 million to $10.9 million. Can you just tell me why that transfer has occurred and why more is now going to government areas instead of non-government areas?

The Hon. J.R. RAU: Again, it is quite a detailed question and it deserves an appropriate answer. Inasmuch as we are talking about the P&D fund, I can say that—the comparison the member is making I gather is between the $8.699 million and the $10.912 million. This is subject to correction, obviously, but I read that as just saying that the net payments out of that fund in that year increased marginally over the previously year.

I can also say that there have been changes in the way that fund is used. I will be perfectly upfront about this. The object of the exercise from my point of view is: the fund could be expended on many relatively small items which make relatively little difference scattered around like confetti all over the state, or there could be some selection of quite significant particular projects which will have good value particularly if there is a partnership with the commonwealth government or a partnership with a local government agency.

There has been a bit of a shift to having more of those partnership arrangements. An example of something that might be in that space is this: there was a commonwealth, state and local government contribution to one of the roads that runs through UniSA between North Terrace and Hindley Street; a bit of money was spent to do that up. There have been various other agreements in respect of public realm, all of which has been attempting to give some added value to the development of the city and to complement the other investment in the city.

At the last election, there was an undertaking given by the government that there would be an opportunity for partnership, for example with the Adelaide City Council, to put $5 million a year into parkland projects. It has been my intention to try to get maximum leverage out of that by putting up reasonably sized parcels of state money out of that fund, find partners either in local government or the federal government (or ideally both), and then get a really decent project out of it. That does not mean there are not still the small ones, but rather than spread the whole thing very thin, there has been a tendency in recent times, where there were opportunities to do it, to find bigger projects.

Mr GRIFFITHS: I do respect the answer given by the minister and I understand the internal dilemma is: how widely do you spread the pie for every area of expenditure; I can appreciate that. It is important, though, to still give some hope to smaller communities sometimes that might not have the capacity to put in the larger-scale funds, or indeed the population density that you are talking about too. There needs to be a balance that is struck between it. Can you provide the following on notice? I am interested to receive a breakdown—the total expenditure being some $21.7 million—of what has been devoted to capital and what is non-capital for 2013-14?

The Hon. J.R. RAU: Yes; again, I will do my best to get that. I think it is pretty clear that the P&D fund is not a fund which is used for current expenditures, but obviously, if there is a project to do up a particular space, some of that money ultimately would have found itself into contractors' wages or something, as opposed to buying bricks, cement or something. In terms of it being recurrent and perpetually in there, that is not the idea of this thing. That is the other point that was made. I have not completely shut down the smaller things; quite the contrary. There is still a large chunk there, it is just that, even in regional South Australia, I have actually been looking for things which have more impact.

It might be that a regional community has something that is very important for them, and if there is a partnership opportunity, that is at least as valid as anything coming out of the CBD as far as I am concerned. I just think that when you are using these sorts of funds you need to leverage as much impact for communities as you possibly can out of them.

The ACTING CHAIR (Mr Odenwalder): Thank you, Attorney. Your time has expired, I am afraid, member for Goyder. We now have the Minister for Health, Minister for Mental Health and Substance Abuse, Minister for the Arts and Minister for Health Industries. Any questions? The member for Morphett.

Dr McFETRIDGE: Thank you, Mr Acting Chairman. My question refers to Auditor-General's Report, Part C, page 72, table 8.8, at the bottom of the page. Minister, given that the 2014-15 Budget Papers gives federal cuts for the 2017-18 financial year as $275.3 million and the Auditor-General's Report gives the total state and federal cuts in 2017-18 as $766.2 million, doesn't the report show that almost two-thirds of the cuts being imposed are state cuts?

The Hon. J.J. SNELLING: There are two points I would make, one being that, with the federal cuts to our health budget, the reason they appear smaller is that half of the cuts are being offset by the removal of remissions to the emergency services levy. The government took a decision that it would be too difficult for health to absorb the full brunt of the commonwealth government's cuts, so half of those cuts were offset by the removal of remissions to the emergency services levy. That is why the federal cuts appear smaller than they actually are; that is, the state government, as part of the budget process, took a decision that half of those cuts would be offset.

The second point I would make is that, while, of course, we need to make our system more efficient, every single dollar in efficiencies we find in our state health system are reinvested back into our health system. The state government's contribution to our health budget will always continue to grow. We will never cut dollars out of health that will be returned to budget. Every single saving we find in health is reinvested to make the capacity in our health system continue to grow to meet growing demand.

Dr McFETRIDGE: I refer to the same reference. Minister, you are saying that the millions of dollars that taxpayers are now paying into the emergency services levy to top that up, that has freed up money that has offset the federal cuts. I am afraid that I must be missing something here. How can you claim that the figure that is shown is only half of the federal cuts? Surely, there is a reduction in federal spending that is a particular figure. It cannot be offset by half by topping up from state money. Am I missing something here?

The Hon. J.J. SNELLING: You are missing something, and it is called the state budget. The Treasurer, at state budget time, made quite clear that the government was making the decision to remove the remissions to the emergency services levy and that, from those savings, that would be put into health to offset the cuts from the federal government. That is why the federal government's cuts appear smaller than they actually are because they are being offset by basically an increase to what people are paying in their emergency services levy.

That is the only way we could deal with the scope and the size of the cuts by the federal government. They are so significant that they could not be absorbed by the Department for Health, certainly not without seriously compromising services we offer to South Australians. The only way to deal with that was by the government making the decision to remove the remissions of the emergency services levy. It was well canvassed at state budget time by the Treasurer. It is no secret; there is nothing new here.

Dr McFETRIDGE: On that same reference, minister: just to be very clear—I am a humble veterinarian, not an accountant and not an economist—in that case, the total federal cuts were $550.1 million by 2017-18, not the $275 million? So, it is $550.6 million, if you add up or double that?

The Hon. J.J. SNELLING: The total quantum of the cuts from the federal government is $655 million over the period 2014-15 to 2017-18. That is as a result of a number of things, including: the cessation of funding guarantees on the National Health Reform Agreement; the reneging on increasing contributions to 50 per cent; the efficient growth public hospital service expenditure and new annexation arrangements for 2017-18 to a composite of consumer price index and population growth.

Secondly, there was $211 million comprising of funding reductions related to the termination of several significant health-related COAG agreements; $120 million relating to the discontinuation of the national partnership agreement on improving public hospital services; $42 million related to the discontinuation of the national partnership agreement on financial assistance for longer stay older patients; and $50 million worth of other reductions to our health services, including the early termination of the national partnership agreement on preventative health, which includes funding for the highly successful Obesity Prevention and Lifestyle Program in South Australia.

My advice is that of all of those—these are national partnership agreements—it was not that they had expired and were not renewed; these are actually national partnership agreements that the commonwealth unilaterally terminated before they were due to expire. So, $655 million is the total cost of the cut from the federal government for the period 2014-15 to 2017-18. As I said previously, half of that has been offset by the removal of the remissions of the emergency services levy. That has enabled, through the budget process, Treasury to offset the quantum of that cut from the federal government.

Dr McFETRIDGE: We will just move on to page 20 of Part C. In the second dot point on top of page 20, the Auditor says:

In the past Health and Ageing has not met its full quota of savings targets and the 2014-15 Budget introduces significant additional savings for this portfolio. The achievement of the current level of Health and Ageing savings presents a very difficult challenge and poses a significant risk to achieving the Budget strategy

The question is, minister: what is the process and time frame for the determination of the savings strategy?

The Hon. J.J. SNELLING: Everything that the Auditor-General says is completely true. It is going to be a significant challenge for the department. It is a problem compounded by the decision of the federal government to unilaterally renege on the National Health Reform Agreement—as I said, that has had a significant impact—and as well as that, unilaterally renege on a number of national partnership agreements. So, of course, even with the decision as part of the state budget to offset half of those cuts with the removal of the remissions of the emergency services levy, that presents a significant savings task.

I think we have had some success in recent years in achieving the savings that have been set out for us. We have delivered a balanced budget result for the last two financial years, we have delivered $126 million in savings in 2012-13 and another $108 million in 2013-14. Of course, particularly because of the decisions of the commonwealth, there is now a significant ramping up of that savings task. I absolutely agree with the Auditor-General that that is a significant risk and a significant challenge for the department.

Dr McFETRIDGE: Minister, could you give us a time frame for achieving that savings strategy?

The Hon. J.J. SNELLING: Well, it is as set out in the budget. The savings that we have to achieve are there in the budget, and that is the time frame.

Dr McFETRIDGE: I will move on to Part C, page 21. In the first dot point, the Auditor-General says:

the Department for Health and Ageing has reported that actual FTEs were 75 FTEs above its cap primarily due to a slightly higher than cap result in the health units

The question, minister, is: what steps are being taken to have health units operate within the caps?

The Hon. J.J. SNELLING: It is 75 FTEs out of 30,000 FTEs in the entire agency. I think 75 above is a pretty good result and, for all intents and purposes, within budget.

Dr McFETRIDGE: We are moving to the Auditor-General's Report Part A, page 34, which talks about the new Royal Adelaide Hospital. The audit says the new Royal Adelaide is the single largest infrastructure project to be undertaken by the South Australian government. Minister, can you assure the committee that the new Royal Adelaide is on time and on budget for delivery?

The Hon. J.J. SNELLING: I cannot add anything to what SA Health Partnership have publicly said; that is, they are working towards the April 2016 handover date. They have not said anything to me privately that they have not said publicly. I can only go on their public assurances that April 2016 will be the handover date.

Having said that, if they do approach the government at some stage saying they are not going to be able to meet that date, then that is something we will give consideration to but, to date, that has not been the case. Several weeks ago, Mr Peter Salveson, who is overseeing the project from Hansen Yuncken, said publicly and to the TV cameras that April 2016 will be the delivery date. I can only go on what he tells me but, having said that, if they were to come to us seeking a revised delivery date, then that is something we would give consideration to.

Dr McFETRIDGE: I am referring to Part A, page 31 of the Auditor-General's Report. Dot point 3 states:

developing a refresh business case for the NRAH (including the [Central Adelaide Local Health Network] reform program) and budget for the costs of transition planning and implementation for the NRAH

Minister, what is the budget for and time expectation to implement the transition, and are there any issues that the government has been made aware of?

The Hon. J.J. SNELLING: We are working on the transition. Obviously, it is a significant project and there is considerable risk there to government. There is a contractual obligation from SAHP to be able to deliver the project in April 2016; likewise, there is an obligation on the state to be ready to move into the hospital in April 2016 too. The member for Morphett might be familiar with the Fiona Stanley Hospital in Western Australia where the Liberal government has had to pay out, from memory, hundreds of millions of dollars in penalties to Spotless because they were unready to move into the new Fiona Stanley Hospital when it had been completed.

We have been doing a considerable amount of work in making sure that, as a state, our health department and the Royal Adelaide Hospital are going to be ready to move in—that is what the Auditor-General is referring to. We have appointed a project director to oversee the transition from the old Royal Adelaide Hospital to the new Royal Adelaide Hospital and are making sure that all those things are being appropriately resourced in order to make sure that we are ready to move in in April 2016.

Dr McFETRIDGE: I assume that is Mr Andrew Nielsen you are speaking about there, minister?

The Hon. J.J. SNELLING: Yes.

Dr McFETRIDGE: He has taken over from Dr Panter. Is that right?

The Hon. J.J. SNELLING: Not quite, no. Dr Panter is the chief executive of Central Adelaide Local Health Network. Andrew Nielsen has taken over with particular responsibility for project managing the transition from one to the other. Andrew Nielsen's reporting role is directly to the chief executive of the Department of Health, Mr David Swan, but in terms of the detailed planning for the transition from the old to the new Mr Nielsen has responsibility.

Dr McFETRIDGE: On that same reference, I understood that Mr Nielsen was liaising with three people—obviously, the chief executive, Mr Swan; Dr Panter; and I believe Judi Carr has come across from the Department of Planning, Transport and Infrastructure. Is that correct?

The Hon. J.J. SNELLING: When I came into the health portfolio, I thought we needed some particular expertise with regard to contract management and that expertise within government lies within DPTI in terms of construction projects of this sort. It is not something health does. We do not build things. That expertise within government was in DPTI. I wanted to beef up what we had available to us, and so Judi Carr was made available for that particular purpose. In terms of managing the building contract, that is Judi Carr's particular job.

Andrew Nielsen's job is to manage the transition from the old to the new, so he is looking at things like procurement, ICT, how we manage the different clinical models; all those sorts of things come under Mr Nielsen's responsibility. Dr Panter continues to be the chief executive of the Central Adelaide Local Health Network and, of course, in that role is intimately involved in all the planning for the move to the new hospital.

Dr McFETRIDGE: On that same reference, more particularly the Auditor highlights the budget for the costs of the transition planning and implementation. Can you give the committee an idea of the costs of the transition planning stage and the costs of the implementation of that transition and also how long you expect the transition to take? I understand it is a 90-day period, but that would be pretty optimistic, I would have thought.

The Hon. J.J. SNELLING: I will get a report back to the member for Morphett on that particular point, but it is no secret that we are making sure that Mr Nielsen and his transition team are being appropriately resourced. This is the largest ever infrastructure, and the most complex ever infrastructure the state has ever undertaken, and it is certainly not something I am going to do on the cheap. It is very important we get it right because, of course, if the consortium were ready to hand over and the state was not ready to move into the hospital, there would be significant financial penalties to the state. It is a key area of risk, and it is something that merits significant investment. As to the details of the question, I will get back to the member for Morphett.

In terms of the transition period as well, I will get back to the member for Morphett. I have been updated on how long we expect it to take, but all these things we are looking at very closely at the moment. Obviously, we do not want it to take too long because there is a cost associated with having to run both hospitals at the same time and we would like to keep that to a minimum, but of course patient safety will be the absolute priority and everything else will be subject to that.

Dr McFETRIDGE: Is there a budget that has been laid out for the transition at the moment, or do you not have that with you?

The Hon. J.J. SNELLING: I do not have it with me.

Dr McFETRIDGE: One of my favourite health subjects has come up. I think this is the fifth or sixth audit in my experience where the Auditor-General has expressed concerns over this particular issue, and it is on page 764 of Part B, Volume 2—special purpose funds. I remember asking questions about this and, referring back to 2008-09, there were non-operating funds and special purpose funds. In his audit, the Auditor points out that there is about $240 million in the SPF projects, with about 300 projects approved and 100 projects not approved yet. As I have said before, this is a recurring issue. The Auditor points out, on the top of page 765 at the bottom of the first paragraph:

…notably the adequacy of documentation underpinning the operations of SPFs…and implications of and reasons for overdrawn SPFs.

The audit needs to know about that. It also states, 'A fully endorsed policy and procedure framework is not yet implemented.' This has been an ongoing problem with at one stage (from memory, the 2009-10 audit report) some of these non-operating funds actually being used to prop up the cash flow at the Lyell McEwin Hospital. I might be wrong there. Minister, can you assure us that the questions the Auditor is raising about these SPFs—non-operating funds, specific-purpose funds—are being addressed and that none of these funds are being used to top up cash flows in hospitals?

The Hon. J.J. SNELLING: Just for the benefit of the committee, special-purpose funds are monies held by local hospital networks for particular purposes and money has gone in. Some of the smaller ones might have come in through charity activity of various auxiliaries, and so on, associated with the hospitals. Probably the largest and most significant are those funds held as a result of the rights of private practice by doctors working in the system, and research as well—grants, and so on, that come into the LHNs from NHMRC, and other organisations that provide research grants. They go in and are held in these SPFs.

The Auditor-General has raised concerns about this in the past. The member for Morphett looked forward to his bipartisan support when certain clinicians expressed outrage that we would be doing anything to exercise any control of the use and address any of the issues that have been raised by the Auditor-General. I am happy to say, though, that we set up a process where we had the Australian Medical Association as part of that, and I think SASMOA might have been—there was clinical representation on that—and there were officers from the department. This commenced in March 2013 and it will shortly come to a conclusion. The steering group, at its meeting held on 28 August, endorsed a plan to bring to a conclusion the SPF review process, the associated communication strategy, and the release of the revised draft SPF policy and procedure for broader consultation across SA Health. Key dates endorsed by the SPF group to conclude the SPF review include:

SPF project managers will have until 31 October to submit any remaining outstanding SPF assessment forms together with supporting documentation for a review against the assessment criteria;

where an SPF has not been approved, the SPF project manager has the opportunity to resubmit their application for reassessment;

the SPF project manager has one month from 31 October (or from the date the decision is issued) to resubmit additional information; and

once the SPF has not been approved, the local health network will be responsible for determining whether the activity undertaken by the SPF is supported ongoing, therefore transferred to operating, or the SPF or should be closed.

This process will be concluded by 19 December 2014. To ensure SPF project managers are informed of the plan to conclude the SPF review, the following communication strategies have been implemented:

a CE check outlining the plan to conclude the SPF review together with the release of the draft SPF policy and procedure for broader consultation and feedback;

communication from the CE to LHN CEOs to support the conclusion of the SPF review process and establish transparent governance frameworks under which SPFs will be managed in the future;

internal communication from the CEOs within the LHNs; and

individual communication from LHN finance and business management staff to the SPF project managers still to submit the SPFs for review.

The intention is for the SPF steering committee to reconvene in October to assess progress and consider additional feedback. New arrangements will provide a greater certainty and transparency to managers assessing SPFs and support SA Health's continued commitment to research. So, we are very close to having this matter cleared up, and I am confident that the Auditor-General will give it all a clean tick of health.

Dr McFETRIDGE: I look forward to the 2014-15 audit report to see if it is a recurring episode. I am sure the Lavender Ladies will be comforted by what the minister has just said—it is all in hand. I move on to page 765, the EPAS (Enterprise Patient Administration Systems). With the appointment of an ICT project director, what is the status of the EPAS project and, in particular, is the government still planning to use EPAS at the new Royal Adelaide Hospital? As the Auditor says at the bottom of page 765:

The new Royal Adelaide Hospital is also reliant on EPAS being implemented and embedded with reformed clinical workflows and practices.

The Hon. J.J. SNELLING: Yes, we are. The status of the project, as I announced a couple of months ago, I think, is that EPAS has been rolled out to Noarlunga Hospital, the Repatriation General Hospital, the SA Ambulance Service and to two of the GP Plus centres, from memory. There have been problems with the PAS side of EPAS, so EPAS was replacing the legacy patient administration systems. As I have canvassed publicly before, we have had significant issues with the PAS side of the product and, because of those issues, we have put a pause to the rollout while that PAS side of the product can be stabilised.

I have instructed the department to concentrate entirely on the delivery of EPAS to the new Royal Adelaide Hospital because, of course, it is going to be critical. One of the most important things is that we are able to roll EPAS out to the existing Royal Adelaide Hospital in plenty of time before the transition to the new hospital. We do not want to be dealing with the complexities of a new IT rollout and the complexities of moving to the new hospital all at the same time, so we will be very careful to make sure that EPAS is ready. Certainly at present, the government's intention is for EPAS to be rolled out to the new Royal Adelaide Hospital.

Dr McFETRIDGE: Moving right along to another wonderful ITC project, Oracle, on that same page, 765, and also in Part A on page 20. Minister, is there a time limit on health's exemption from penalties for late payments pending the rollout of Oracle?

The Hon. J.J. SNELLING: I do not think there is a time limit, but there is an expectation that health will push Oracle out as quickly as we possibly can. What we have seen is that where Oracle phase 2 has been rolled out there has been considerable improvement in account payment performance, and I am very confident. Treasurer's Instruction 11 now requires the payment of all invoices by the due date as measured by invoice volume. For the 2013-14 financial year, SA Health paid 92.82 per cent of invoices within 60 days and 76.67 per cent of invoices by the due date. Even though SA Health in partnership with Shared Services rolled out an integrated e-procurement solution, Basware—that is part of the Oracle project—to a number of health units, all other entities in SA Health still rely on manual processing to manage accounts payable processing.

The phase 3 rollout of the Oracle corporate system, Accounts Payable, is planned to include the whole of government e-procurement solution, Basware, to electronically manage the workflow of invoices throughout all entities across SA Health. This will enable SA Health entities to attain compliance with the Treasurer's Instruction 11 requirement. The programmed rollout of OCS was recently completed at the Flinders Medical Centre and the Lyell McEwin Hospital with considerable improvement in AP performance already identified; that is, processing at 80 per cent and 90 per cent respectively.

Dr McFETRIDGE: Minister, I may be in the depth of the report here, but you have one system that is working better than it ever has. Why is the Women's and Children's Hospital network the worst performer, paying 66 per cent of its bills within 30 days, yet you have the Department for Health and Ageing paying 94 per cent of its accounts within 30 days? I would have thought that you would have consistency across the system if the system is working well.

The Hon. J.J. SNELLING: If the member for Morphett was listening to my answer, he would have heard that we have not rolled it out everywhere yet. The Women's and Children's Hospital has not had it rolled out yet, but we have seen significant improvements in accounts payable in sites where we have had it rolled out.

Dr McFETRIDGE: It is difficult to listen to the detail sometimes when you are looking at the next question, minister; I will admit that. I thank you for your answer. In the very last minute that we have, looking at audit paper Part B, Volume 2, page 766, we are talking about documented evidence of written market quotes on the procurement and contract management. The question is: given that there was no documented evidence of written market quotes on the Procurement and Contract Management System, in relation to the four projects that were the subject of written market quotes, can the minister advise whether the issue was a lack of documentation of tasks completed or that tasks were not completed?

The Hon. J.J. SNELLING: I think the answer is there in the A-G's Report, which states:

The Department responded positively to the audit findings and recommendations. Key initiatives advised included reviewing the procurement compliance program, ICT procurement practices and supporting policy and procedures for compliance with TIs and State Procurement Board policy guidelines. The Department also communicated it will ensure gaps in procurement documentation are identified and addressed in relation to PCMS, supplier evaluation and the selection process. Further the Department indicated improvements for probity directives and relevant procurement training and communications for responsible staff. The key initiatives are due for implementation before the end of December [this year].

Progress reported; committee to sit again.


At 17:47 the house adjourned until Wednesday 29 October 2014 at 11:00.

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