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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.

(Continued from 30 October 2014.)

The CHAIR: We have the Minister for Transport and Infrastructure and a question from the member for Mitchell.

Mr WINGARD: My question pertains to page 1277, the absence of a contract management framework can result in the department not identifying areas of noncompliance with key contract provisions, including performance obligations by the contractors, as the Auditor-General points out. Given that the Auditor-General has pointed this out, I ask the minister: what is he doing to remedy this to ensure that areas of noncompliance are being identified?

The Hon. S.C. MULLIGHAN: I thank the member for Mitchell for his question. Perhaps before I proceed to give an answer I will introduce the two advisers I have with me today: Michael Sedgman, from the Department of Planning, Transport and Infrastructure, and also Julienne TePohe from the department.

My understanding, very generally, is that this issue, along with all the other issues which have been raised by the Auditor-General to the department, has been the subject of what are commonly referred to as 'management letters' prior to the preparation of the report as we see it in front of us today. The Auditor-General, or one of his delegates, commonly writes to the department outlining any issues which he has identified and that is the opportunity for the department to respond about that issue, which then provides the Auditor-General the opportunity to provide a balanced view in his report.

I am advised that three issues were raised: the first issue was contract management, the second issue was contract variations and the third issue surrounded the industrial dispute which had a lot of attention in particular in the lead-up to the last state election. With regard to the first, contract management, I am advised that concerns were raised by the Auditor-General as contract management plans for two of the three metropolitan bus contracts were still to be finalised at the time of audit.

With respect to the contract variations, I am advised that concerns were raised by the Auditor-General that contract variations made in April 2013 were in excess of cabinet approvals and that reconciliations of the variations had not been finalised. With regard to the last one I mentioned, the industrial dispute, the Auditor-General noted that industrial action in early 2014 had resulted in missed trips by bus contractors. I am also advised that he has apparently observed that potentially there is lost revenue from fare collection.

With regard to the first issue, at the time of the audit, contract management plans had been developed under a new format to support a contract management framework but not finalised. I am advised that these plans have since been completed. I am advised that it should be noted that, whilst 'new contract management plans had not been finalised', there were still formal plans in place and that these formal plans in place that had been developed under the previous contract management framework were being followed.

Just jumping back to the contract variations issue, the second issue—which I am advised is of some importance—as advised to the Auditor-General at the time of the audit, contract variations provided in May 2013 included the cost for regular service alterations as well as the increased cost of moving eight routes from Light-City Buses to Torrens Transit. The requisite funding was approved by cabinet on 22 April 2013.

My advice from the department about the assertion that there were variations made in excess of cabinet approvals is that that issue relates to the moving of eight routes from Light-City Buses to Torrens Transit which, indeed, was contemplated in the relevant cabinet approval. I am further advised that a reconciliation of the contract variations has been finalised and reported to the Auditor-General.

On the last issue, the industrial dispute, as advised during audit and noted in the Auditor-General's Report, contract variations were executed to account for trips not operated by bus operators during the period of the industrial dispute. The advice I have here is that, whilst fare revenue could not be recovered as the quantum of the loss could not accurately be quantified, it has also been made plain to me that, generally speaking, when we provide public transport services, if any of those services are not provided then the financial position in general which we would find ourselves in might be that the excess cost of providing those services, above and beyond whatever fare revenue we might be able to recoup, would not be incurred by the government.

The quite logical and understandable assumption that many people have that, if a service was not provided and hence ticket revenue was not received for that service, the government might be out of pocket. I am, in fact, advised that, depending upon the circumstances, it could quite possibly be the case that the government has made a saving by not having to pay for a service which would otherwise have been provided.

Mr WINGARD: Just to pick up on a couple of those points, minister, the bus contract payment and the industrial dispute you talked about, I will go to that one first. Did you or the department calculate how much was owed, given that you said that it was not sought? Was that figure determined—how much was owed?

The Hon. S.C. MULLIGHAN: In terms of the fare revenue that was not collected?

Mr WINGARD: Yes.

The Hon. S.C. MULLIGHAN: No. My advice is that the quantum of the loss could not be estimated by the department, let alone any claim be made for that. I would have to check this, and I am happy to bring back a further and better response to the parliament but, if I cast my mind back, not that I was in a position where I had carriage of these issues at the time, I think that there seemed to be a combination of both services which were unable to be provided due to a lack of bus drivers, for example, or perhaps for some other reasons, as well as when bus services were being provided drivers perhaps exercising an activity where they were deliberately not collecting fares or potentially even perhaps advising passengers not to bother paying the fare. I am not sure we are able to estimate that, but I will just double-check, though.

To put a slightly finer point on the advice I just gave to the chamber, my advice is that the lost revenue I think the member for Mitchell is referring to is due to the bus drivers not enforcing validation of tickets, so it is not possible to accurately quantify the loss from that. Again, I am happy to check this, but I assume that, when we come up with estimations for people who are riding public transport services to and from the city, to and from work, for example, the validation on a bus, for example, is the key part of making that estimation. If we do not have that validation data, if people are not validating tickets, let alone purchasing paper tickets and then validating them, we are unable to accurately quantify the number of people who have not paid and, hence, be able to make any sort of claim for lost fare revenue.

Mr WINGARD: Following up on that, if you cannot quantify, in future industrial disputes how would you know what to charge one of the contractors? It seems to me that, if you cannot formulate a number or a figure for disputes or incidents like this in future, how much could be lost to South Australian taxpayers is the concern.

The Hon. S.C. MULLIGHAN: I think that is a pretty reasonable question to ask. I think that, first of all, our position would be, where appropriate, and the government would not always seek to do this, but shortly after the election, for example, the Deputy Premier and I sat down with bus operators and also the union involved (the Transport Workers Union) to try to broker an outcome. Perhaps the first way of answering your question is: try to avoid the industrial dispute or at least try to work to minimise the impacts of the industrial dispute. As to what better methods or systems we might either now have in place, or perhaps could seek to develop to put in place if these situations came up again, I would have to take that on notice and come back to you with some further advice.

Mr WINGARD: In regard to the unclaimed moneys, on page 1278 it states:

SSSA [Shared Services SA] and the Department had yet to establish arrangements to review and action unclaimed monies balances. Further, Audit noted that SSSA was in the process of performing a whole-of-government review of the management of unclaimed monies.

How much money is outstanding for public transport fare evasion in fines for the department?

The Hon. S.C. MULLIGHAN: What page, member for Mitchell?

Mr WINGARD: 1278, Unclaimed moneys.

The Hon. S.C. MULLIGHAN: I am having a bit of difficulty locating the reference on page 12—

Mr WINGARD: I think it is at the bottom there. My apologies.

The Hon. S.C. MULLIGHAN: …'in which controls did not operate effectively,' the last line and a half?

Mr WINGARD: Yes.

The Hon. S.C. MULLIGHAN: I will see if I have some advice on that. I will perhaps come back to the parliament with some further and better particulars about the matter which is raised under that indented heading there on page 1278, Revenue and accounts receivable.

Mr WINGARD: My apologies, minister, 1279, at the bottom of 1279. My apologies.

The Hon. S.C. MULLIGHAN: I will just check if I have some information. Sorry for the delay, member for Mitchell. My advice is that the department is currently working with Shared Services to both ensure that their part of the unclaimed moneys register is up to date, but they also note that an across-government project is being undertaken by Shared Services to try to standardise the processes associated with unclaimed moneys. I am not sure whether we are able to disaggregate the information to the extent which you raised about fines, for example, but if we can get that information from that register I will be happy to provide it.

Mr WINGARD: Thank you, that would be greatly appreciated. Page 1282, Building management—facilities. It is outlined here that:

The Department is responsible for the oversight of outsourced facilities management services, which provide government agencies with access to planned and unplanned maintenance, minor works and other services.

It is quoted:

As reported last year, an unacceptably high percentage of facilities charges are auto-approved for payment without certification from agencies receiving the service. Audit review of system records of the extent of agencies' review of facilities charges for 2013-14 found 36 per cent of facilities charges totalling $64 million were not certified by requesting agencies prior to payment.

Is that acceptable and how will this process change in the future?

The Hon. S.C. MULLIGHAN: Just while Michael is searching to see if we have some further and better information to provide by way of an answer, if you go onto page 1282 there is a synopsis of the department's response to that. It seems that the automatic approval of those, from my reading of how the Auditor-General has summarised the department's response, may not just be isolated to the department, it may also be occurring with the client agencies, but I will have to double-check that.

From the two dot points underneath the third paragraph of 1283, I think the general explanation is that the auto-approval function was created to try to ensure prompt payment for services, but it should only be used—instead of a matter of course, which may seem to be the case highlighted by the Auditor—as an exception, and that there is a review requirement for these claims. So, my understanding (further) from that explanation is that the department is investigating the development of an agency notification system to make sure that these sorts of things either do not happen in the future or their incidence is minimised.

I should probably also say that the scale and quantum of contracts which are managed by DPTI on behalf of other government agencies are fairly extensive, and while 36 per cent of facilities charges and $64 million are very significant figures, I would hope that, given the experience and the capability established within the department, we should be able to rectify this issue into the future.

Mr WINGARD: Before I hand over to the member for Bragg, I refer to page 1274 and the management of purchase cards. The department has approximately 1,100 purchase cards issued to staff and as a consequence, a significant amount of expenditure is incurred by staff using purchase cards. While this can be a cost-effective means of purchasing goods and services, there are some risks, such as poor procurement practices, inappropriate use of public funds, financial reporting errors and noncompliance with taxation legislation. There were instances of payment splitting to bypass automated authorisation card transaction limits. Gift cards were also purchased and the details of what the payments were for were incorrectly recorded. How do you justify these claims by the Auditor-General and what are you and the department doing to alleviate these concerns?

The Hon. S.C. MULLIGHAN: I thank the member for Mitchell for his question, and I share his concern about the Auditor's finding in that respect. My very general understanding is that in years gone by there has been a significant increase in the number of purchase cards which have been made available to, for want of a better term, purchasing officers across government. In some quarters it has been seen as an attractive way to manage the smaller end procurement of goods and services, given the relative convenience of a credit card transaction rather than the invoicing accounts receivable/accounts payable mechanism which previously occurred within government agencies. Nevertheless, having so many purchase cards obviously creates a very significant opportunity for misuse, either by poor practice or, more concerningly, unscrupulous practice. Nonetheless, both are concerning.

My advice from the department is that there has been a piece of work undertaken by the department to analyse all purchase card expenditure between a set period, which was the calendar year 1 January to 31 December 2013, using a data analytics tool. It analysed over 55,000 transactions, so a very significant number, and identified what is described here as 'a number of areas for improvement'. The agency, I am advised, will develop and implement a number of initiatives which, amongst other things, should go some way to addressing the issues that have been identified by the Auditor-General.

I have to say, number one for me, and it may be a view that others share, is that rationalising the number of purchase cards, who these purchase cards are available to and making some reductions there seems to me to be an obvious one, and the department is pursuing that. On the face of it, that would seem to reduce the chance for misuse, again, as I said, either inadvertently or by design. I am also advised that we are looking at improving our practices and processes more significantly to again try to minimise the risk of that. I am aware that it is not an issue, unfortunately, which is just confined to the department, but nonetheless we are working very hard to try to minimise it, because I think, and as you implied in your question, these sorts of instances are unacceptable.

Ms CHAPMAN: I refer to the Auditor-General's Report, Volume 4, pages 1286-7 and also note 11 on page 1316. I will refer to the latter first. This notation, No. 11, is a further explanation in respect of written-off works in progress. I will come back to the Gawler railway line, but in respect of expenditures incurred under the Northern Expressway project, which is the other note to explain the write-off of a total of $55.8 million, I assume from that that some $9 million was written off in respect of the Northern Expressway project. If so, what was it for?

The Hon. S.C. MULLIGHAN: I do not have that detail about the Northern Expressway in front of me. My understanding is that a payment was made—and I really am going from memory here, so I will have to check this and come back with a better and hopefully accurate answer to the house—from the Northern Expressway project of approximately $12 million which, from a separate and unrelated briefing I saw, seemed to be a return of funds from the state government to the commonwealth government which was a significant co-funder of that project. I will have to take that on notice and check that because I do not have that detail in front of me.

Ms CHAPMAN: It is just that it is described as write-off of works in progress as distinct from refund to the commonwealth for a repayment, so I am not quite sure how that works. In any event, we will wait to hear what your response is.

The Hon. S.C. MULLIGHAN: Yes, I am happy to bring back an answer.

Ms CHAPMAN: Pages 1286-7 refer to the Gawler modernisation project, and some history is outlined there. In short, the government decided back in 2012 that it would suspend this project. Subsequently there was a recall by the commonwealth government to refund some $41 million—that was paid back—then in June this year the government announced that it would restart part of that project, which was the Adelaide to Salisbury component, which they would progress in 2017-18. As has now been identified by the Auditor-General, there was a write-off of a total of $46.6 million, comprising $28.6 million for costs in respect of the project between Salisbury and Gawler and also $18 million as described there.

This was the subject of questions at estimates, minister—and I appreciate you were newly in the job at that point—and again, in October in the parliament in respect of some of the detail of this. I am certainly hoping now that it has caught the attention of the Auditor-General that some detail will be able to be provided. My first question is: was the government warned at any time by public servants that some of the expenditure on the Gawler modernisation project would be wasted if it was suspended? If so, when?

The Hon. S.C. MULLIGHAN: I thank the deputy leader and member for Bragg for that question. She provided a brief synopsis of the history of the Gawler line modernisation project and it is true to say, casting our minds back to 2008, that the electrification of the Gawler line, along with the staged and eventual electrification of all four passenger rail lines and their two spur lines across metropolitan Adelaide, was a priority for the government. In fact, I can remember that the complete project across all the rail lines was announced, I believe, in the first week—

Ms CHAPMAN: Point of order, Madam Chair, if I may. I think the minister perhaps has not quite understood the question in respect of the warning of the cancellation which did not occur until May 2012. This is a very familiar project to the committee and indeed to the whole parliament, so I just ask that you address your attention to what warnings you received by any of the Public Service in respect of what would be wasted if you cancelled it.

The CHAIR: The minister is answering the question.

Ms CHAPMAN: Well, 2008 predates it by four years, Madam Chair.

The CHAIR: The minister is answering the question. I am sure he will finish off for you.

The Hon. S.C. MULLIGHAN: I thank the member for Bragg for that interjection. As I was saying, it has been an ongoing priority for the government to try to roll these projects out. As I recall—and I think as the member for Bragg mentioned in her explanation that accompanied her first question on this—a decision to defer it was taken in 2012, if I recall accurately, at the time of the release of that year's state budget, notwithstanding the commitment that had been made four years earlier and notwithstanding that the project had moved from being at that point in time a state government funded project to a joint state and commonwealth funded project, given the economic conditions and the decline in state revenues. Then of course there was some additional history that perhaps was not canvassed by the member for Bragg in her response, which despite her interjection, may well be germane to the question which she asked and that is that—

Ms Chapman interjecting:

The Hon. S.C. MULLIGHAN: I am sorry; is the purview of lengthy explanations about questions and answering solely in your domain?

Ms Chapman: I am asking a question.

The CHAIR: Order! The minister has the call.

Ms Chapman: If you want to waste time—

The CHAIR: Order! The member for Bragg is called to order. Minister.

The Hon. S.C. MULLIGHAN: As we were discussing, yes, this issue, the project, has been canvassed. You canvassed it in respect of a quite separate query during estimates, unrelated to the issue.

Ms Chapman: I am not getting an answer to the question.

The Hon. S.C. MULLIGHAN: It is because you were asking questions about something completely unrelated to what we were talking about then. You have even read—

Ms Chapman interjecting:

The CHAIR: The deputy leader is reminded that she has been warned twice in question time. That carries over into this. I am asking you to listen to the minister's answer, and I will give you the call when he has finished. Minister.

The Hon. S.C. MULLIGHAN: There are four other members who have been members of parliament in this chamber since March. You do set a pretty bad example.

The CHAIR: Order! Back to the question.

Ms Chapman interjecting:

The CHAIR: Order! Sit down. Order! I have asked the minister to either finish the question or sit down. You are sitting down? The member for Bragg has the next question.

Ms CHAPMAN: Thank you. I take it then that you did not have any warning from any public servants. I will move to the next question.

The Hon. S.C. Mullighan: I was trying to answer that question.

The CHAIR: Order!

Ms CHAPMAN: Since the Auditor-General's published report, have you checked to see exactly what works have been written off, given your answers made on 15 October that you were going to check that out?

The Hon. S.C. MULLIGHAN: I find it extraordinary, Chair, that given this issue has been canvassed in this chamber before, that I have provided answers to—

Ms Chapman interjecting:

The CHAIR: Order, member for Bragg!

The Hon. S.C. MULLIGHAN: Despite having the Hansard apparently in front of her, she still does not seem to be able to grasp the context and the content of the responses I gave at the time. When the member for Mitchell asked me questions about this, the information I provided to the member for Mitchell was that my advice from the department is that we could only really be in a position to provide an accurate estimation as to the full extent of written-off works once the project is recommenced.

My understanding is that expenditure on works related to this project was being incurred up to December 2013, which I am advised—I have not seen the document, but I am advised—is consistent with the advice which was provided to the Public Works Committee. As I said, I have not seen that document, but that is what I am advised has been advised to that committee.

In summary, I think it is fair to say that of the works that have been undertaken to date, both the physical or construction works, for want of a better term, as well as all of the incurred what might be considered more generally across government to be operation expenditure—the expenditure on consultants for design and technical work, for early engineering estimates and so forth—it will only become apparent, I am advised, at the recommencement of the project how much of both of those different categories of expenditure is able to be considered to be useful, which then has the impact on how much of that expenditure incurred to date is deemed to be not useful and at that point in time written off.

Ms CHAPMAN: When was the decision taken to change the recommencement date for the Gawler modernisation project from 2015-16 to 2017-18, and was the potential for already incurred costs to be written off included in the decision-making process?

The CHAIR: Are you still on the same pages?

The Hon. S.C. MULLIGHAN: Yes. With respect to the first question, this was something which was announced in the recently released state budget. I cannot remember off the top of my head what date that was released. My memory is that it is usually either in late May or early June. I have to say, I cannot quite remember the point that you raised, although it sounded to me very similar to the first question you asked on this project, and for the benefit of both the deputy leader and the parliament, I am happy to take that on notice.

The CHAIR: Our time having expired, I thank the minister and his advisers for attending, and call on the next section with the Hon. Susan Close: Manufacturing and Innovation. Member for Stuart, do you have some questions?

Mr VAN HOLST PELLEKAAN: I refer to Annual Report, Part B, Agency audit reports, Volume 3, page 1148, with regard to automotive transformation. As part of Activity 8: Automotive Transformation, what progress has the government made in coming up with potential future uses of the GM Holden plant and site at Elizabeth?

The Hon. S.E. CLOSE: I would like, before answering that question, to introduce the advisers I have with me: Marcus Ganley from the Department of the Premier and Cabinet; I have Chris Oerman, who is Executive Director of the Government Services Group; Rick Seaman, who is the Acting Chief Information Officer; and Steven Woolhouse, who is the Director of Finance and Corporate Finances. From the Department of State Development I have Len Piro, Executive Director, Industry and Innovation; and Rick Janssen, Executive Director, Corporate Services.

The question about the future of the Holden site is still some way down the track. As you would be aware and as the chamber would be aware, we have signed a memorandum of understanding with General Motors Holden so that there will be clear communication between both the government and General Motors Holden about the future of the site. That was important because the site is wholly owned by GM and, therefore, the government wanted to ensure that it had the kind of relationship that would mean that we could continue to communicate about options as they were presented to us.

We have from time to time had people who have expressed some kind of varying degree of interest, but to date nothing has translated into anything of any substance. Holden has, true to its agreement in the MOU, facilitated discussions about that. The reason I prefaced my answer with the point that I think we are talking about something some way down the track is that what GM have indicated is that they will be keeping the site for some years after the closure—about three, five, maybe six years—and that is because they want to ensure that they take the equipment that they are able to use elsewhere, where they will continue to make cars, and they also may want to do some due diligence around any contamination in the area, certainly an assessment.

They will also be working out what parts of the site they will want to continue to use. There is some possibility of using it, for example, to store cars as they are imported for sale through dealerships and also the storing of spare parts to be supplied to those dealerships where they maintain and service vehicles. We will continue to have the discussion and we will continue to keep the public and the opposition informed as appropriate.

Mr VAN HOLST PELLEKAAN: As part of the jobs plan there is $2 million allocated to review the future use of the GM Holden plant. Has any of that money been spent and, if so, on what?

The Hon. S.E. CLOSE: Just to clarify, in the Our Jobs Plan we did ask the commonwealth to contribute $2 million, which they declined to do. We have not ourselves set aside any money for that.

Mr VAN HOLST PELLEKAAN: So there is no money from any source set aside to do that?

The Hon. S.E. CLOSE: No.

Mr VAN HOLST PELLEKAAN: Same book, page 1126, with regard to purchase orders, can you explain why DMITRE officers were not raising purchase orders which, according to the Auditor-General, were required to be raised?

The Hon. S.E. CLOSE: One of the complexities for today, of course, is that we are reviewing an Auditor-General's Report for the year ending 30 June 2014, when DMITRE still existed. We are now in the world of the Department of State Development, which means that some of the response to the comments will be taking place under a different construction of the department and therefore different corporate services.

The judgement on the comment about the raising of purchase orders was that it was not a significant issue. However, DMITRE did undertake a review in order to ensure that it would not receive such a comment in future. That has now had to fold into the processes of the Department of State Development.

Mr VAN HOLST PELLEKAAN: Thanks, minister, and I do understand the transition issues. Do you know when that review will be complete?

The Hon. S.E. CLOSE: I imagine that what will now be happening is that the consequences of this report will be informing the structures of the Auditor-General's Report, but if there is any more substance to that I will convey that to you and take that on notice if there is more to add.

Mr VAN HOLST PELLEKAAN: With the benefit of hindsight, was anything actually purchased inappropriately—the use of purchase orders was not done exactly as it should have been? Was anything purchased inappropriately?

The Hon. S.E. CLOSE: My best advice is that there is not a concern about any particular purchase that was made, that it was just the process. That is also substantiated by the Auditor-General not having qualified his report. He has made an adverse comment about the processes only. Therefore, there is reason to assume that the Auditor was not overly concerned about the result of those processes.

Mr VAN HOLST PELLEKAAN: Do you know how many staff were involved in that breach of the purchase order protocol?

The Hon. S.E. CLOSE: We do not have that detail here and I will take that on notice.

Mr VAN HOLST PELLEKAAN: I refer to the same book, page 1127, recording receipt of goods and services. According to the report, DMITRE officers were not consistently recording receipt of goods and services in Basware prior to the invoices being paid, so receipt was not technically done properly before the invoices were paid. Has this issue been investigated?

The Hon. S.E. CLOSE: Again, this is regarded as a minor breach but, nonetheless, one that requires a response. As is indicated in the Auditor-General's Report, the response was to remind the staff about the procedures, and that is continuing to happen. I cannot guarantee it will never happen again, so there is an ongoing process of making sure that standards are, first of all, understood and then that they are kept to.

Mr VAN HOLST PELLEKAAN: Are you aware of any invoices being paid where the goods were not actually received?

The Hon. S.E. CLOSE: I will take that on notice.

Mr VAN HOLST PELLEKAAN: Same book, page 1150. Can the minister advise what the total subsidy payments towards industry development were for 2013-14? Just to explain, the reason I ask is that I am a little bit unsure about these numbers in the table on that page. Where it says 2013, is that 2012-13, and 2014, is that the 2013-14-year?

The Hon. S.E. CLOSE: Yes, your question about the years, that is correct.

Mr VAN HOLST PELLEKAAN: What is the grants and subsidies budget for industry development for 2014-15? Do you have that, please?

The Hon. S.E. CLOSE: We will take that on notice, as it is not within the Auditor-General. I have not brought that level of detail with me today.

Mr VAN HOLST PELLEKAAN: Were any grants provided to companies with the condition that they move to the Tonsley site?

The Hon. S.E. CLOSE: Yes, there were, and I will provide you with the detail of that subsequently.

Mr VAN HOLST PELLEKAAN: Can you give an indication? Do you happen to know how many, roughly, or what percentage of the total, or anything like that?

The Hon. S.E. CLOSE: No, I do not have that level of detail here, particularly as there is a distinction in your question about being on condition of moving as opposed to a company that is moving as part of what they are doing, so we will be careful in our response.

Mr VAN HOLST PELLEKAAN: Page 1148, what was the total allocation of FTEs under Activity 7: Manufacturing and Innovation, for 2012-13 and 2013-14, and budgeted for 2014-15?

The Hon. S.E. CLOSE: For the year that is covered by the Auditor-General's Report, it was just under 50 FTEs, that is, 2013-14. I do not have the details for 2014-15. It is around the same, but I will get that precisely for you.

Mr VAN HOLST PELLEKAAN: How much funding is allocated to manufacturing and innovation each year from the government's Our Jobs Plan to activity 7?

The Hon. S.E. CLOSE: The Our Jobs Plan, as you would be well aware, is the $60 million over four years. To disaggregate that into activity 7, we will have to take on notice. There is a lot of it being handled there but other bits are handled elsewhere, so we will disaggregate that for you.

Mr VAN HOLST PELLEKAAN: I have the same set of questions essentially for activity 8 on the same page. Could you tell me the FTEs for 2013-14 for activity 8?

The Hon. S.E. CLOSE: The Automotive Transformation Taskforce came into life at the beginning of this financial year and, therefore, there are not separately accounted for people in the 2013-14 year that is covered by the Auditor-General's Report. There is now something in the order of 17 FTEs in the Automotive Transformation Taskforce this year but there were not any held against that activity within the Auditor-General's Report.

Mr VAN HOLST PELLEKAAN: Similar to activity 7, would you be able to come back with an answer about how much of the Our Jobs money is focused specifically on activity 8?

The Hon. S.E. CLOSE: Again, I believe it is something like $20 million or $24 million or $26 million of the Our Jobs Plan is being directly dealt with through the Automotive Transformation Taskforce. Again, that is starting from this financial year but I will get that more precisely for you.

Mr VAN HOLST PELLEKAAN: Back to page 1150 and looking at consultancies, I ask the minister to explain the increase in the number of consultancies and the increased consultancy expenses.

The Hon. S.E. CLOSE: The increase of $1.3 million is predominantly due to the following: there was an increase of $2.1 million in the Our Jobs Plan consultancies which commenced in 2013-14; there was an increase of $0.4 million due to once-off funding from the commonwealth government in 2013-14 for the National Energy Efficient Building Project; an increase of $0.2 million due to changes in the work undertaken on the Port Pirie transformation project between financial years; an increase of $0.2 million due to consultancy work in relation to the establishment of the Mining and Petroleum Services Centre of Excellence commencing in 2013-14, which was partly offset by a decrease of $0.9 million due to costs incurred in 2012-13 for the Public Sector Renewal Program which transferred to DPC from 2013-14; a decrease of $0.4 million due to changes in the work undertaken on the Brukunga mine site remediation project between financial years; and a decrease of $0.2 million due to once-off consultancy in 2012-13 for review and implementation of the South Australia-India Economic Development directions paper.

Mr VAN HOLST PELLEKAAN: I note that the More Than Cars campaign was not on the list but I just want to be sure that none of the consultancy money went to the More Than Cars campaign.

The Hon. S.E. CLOSE: My understanding is that it was not funded through DMITRE. If I need to alter that I will get back to you but otherwise my understanding is that it was not funded through DMITRE.

Mr VAN HOLST PELLEKAAN: Thanks, minister, and I will wait for that answer. Can you confirm whether or not the Auditor-General contacted the department regarding the More Than Cars campaign?

The Hon. S.E. CLOSE: The advisers I have here are unaware of that so I would assume not but should someone come forward from within the department to say anything differently then I will update you on that.

Mr VAN HOLST PELLEKAAN: Back to page 1148, Automotive Transformation, which states:

Activity 8: Automotive Transformation

This activity will support companies operating within the supply chain to successfully diversify and secure alternate revenue streams to drive sustainable growth, long-term employment and potential for export revenues.

That would be terrific. Will the minister advise what work is being done under the Automotive Transformation portfolio with regard to managing the potential social issues arising out of the likelihood of increased unemployment from GM's departure from the northern suburbs?

The Hon. S.E. CLOSE: Of course, what we primarily prepared for today is to discuss things that have occurred within the Auditor-General's scope for the department. The element that relates to that is the contract which we have entered into with Northern Connections—it is run out of DCSI—to provide the one-stop shop for people who are caught up in the supply chain (primarily, the workers) to provide a service to advise them on where they will be able to gain support. DCSI has other social services that are more geared to supporting people who are vulnerable in the northern suburbs, as well as across the state. We support the work they do but we are concentrating on the economic activity of DMITRE and the Department of State Development.

Mr VAN HOLST PELLEKAAN: Does the automotive task force play any role in that whatsoever or is it all Northern Connections?

The Hon. S.E. CLOSE: The support for the workers is provided through the task force. The arrangement with Northern Connections is that that is a convenient place to have a website, a physical presence and also a telephone presence to be able to answer the questions of people who are concerned about what is happening.

One of the challenges we have with the closure of Holden, although in some ways it is a good problem to have, is that we have a fairly long lead time before the anticipated closure. As we gear up programs ready to support the workers, and we are getting sorted and prepared to do that, the workers, nonetheless, while we are doing that, are deeply concerned about their future. So, it was important to us to have a front face, particularly in the northern suburbs, although it is on my mind that the southern suburbs also contain workers who will be concerned about it; there are quite a few component suppliers in the southern suburbs.

Northern Connections is that one-stop shop for anyone in South Australia who is concerned about the consequences for them with the closure of Holden. The support that is then provided to the workers—the support in terms of career assessment and retraining—is provided by the automotive task force within the Department of State Development.

Mr VAN HOLST PELLEKAAN: While I guess there is no direct responsibility, no funding lines, does the automotive task force contribute support or advice into that work, keeping in mind that these questions are about the social issues, not the economic or the direct employment issues?

The Hon. S.E. CLOSE: I was just trying to clarify with the advisers whether we had a dollar figure to give you. We do provide money to Northern Connections to do that piece of work for us, but I will have to get back to you on how much that is each year that we are providing to support that effort.

Mr VAN HOLST PELLEKAAN: What I was really trying to get at, and I might have been a bit unclear, is the social side of things as opposed to the harder economic side of things. Is the Automotive Transformation Taskforce putting in money that is meant to be directed to both those areas?

The Hon. S.E. CLOSE: No. It is slightly conceptually difficult because a person's work is the greatest definer of their social wellbeing. If they are employed, they are already significantly better off. If they are employed in a stable position that they also enjoy, they are again significantly well off. It would not be accurate to say that our concern about the employment of people or the sustainability of companies where they work has no social dimension to it. But if you are asking more specifically about counselling, housing or welfare, that is not the province of the Department of State Development. However, if we are successful in continuing the employment of anybody, we are contributing to their social outcomes.

Mr VAN HOLST PELLEKAAN: I refer to page 1150, looking at the services and supplies, accommodation and service costs. Was it DMITRE's target to source 50 per cent of its electricity supplies from green power in 2013-14?

The Hon. S.E. CLOSE: We do not have with us the detail on the level of green power, so we will take that on notice.

Mr VAN HOLST PELLEKAAN: So, not sure what the target was, minister, or not sure what was achieved?

The Hon. S.E. CLOSE: I personally am not sure of either, so I will take those on notice.

Mr VAN HOLST PELLEKAAN: When you come back, minister, if you would, would you also answer what the target was, just to confirm that, because I accept what you are saying, and also confirm what was actually achieved and, if there is a difference, come back with an explanation, please.

The Hon. S.E. CLOSE: Yes, absolutely.

Mr VAN HOLST PELLEKAAN: Same page, travel and related expenses: will the minister explain the large increase in travel and related expenses that are shown in the table there?

The Hon. S.E. CLOSE: Travel went down by $211,000 and that decrease is mainly due to the change in travel requirements between years, including the impact of the transfer of Invest in SA to the Department of the Premier and Cabinet, which was effective from 5 September 2013.

Mr VAN HOLST PELLEKAAN: Same page, bad and doubtful debts. Will the minister explain what the $1.232 million in bad and doubtful debts relates to?

The Hon. S.E. CLOSE: There was a $1.232 million amount in doubtful debts recognised during 2013-14. The increase in doubtful debts is predominantly due to the following: an increase of $0.9 million due to the recognition of the National Safety Agency as a doubtful debt. The company was provided with a loan in 2010-11, however, was not able to meet certain conditions for it to be converted to a grant and, therefore, has been invoiced for repayments. Payment is in dispute and, therefore, the full amount has been recognised as a doubtful debt during 2013-14. Also, an increase of $0.2 million is due to recognition of Priority Engineering Services as a doubtful debt as the company went into administration during 2013-14. The $0.008 million recognised in 2012-13 relates to an increase in the provision of doubtful debts associated with the Extractive Areas Rehabilitation Fund.

Mr VAN HOLST PELLEKAAN: The $110,000 writedown, can you tell me what that is, please?

The Hon. S.E. CLOSE: We may have the information here but you only have two minutes left, so I will take that on notice in order to allow you to ask any further questions.

Mr VAN HOLST PELLEKAAN: Thanks, minister. On the same page, looking at renewables, so right down towards the bottom of the page, why is there a considerable difference there between 2013 and 2014?

The Hon. S.E. CLOSE: I would have to direct that question to minister Koutsantonis as that relates to his portfolio area and I do not have that briefing with me.

Mr VAN HOLST PELLEKAAN: With that entire section of grants and subsidies, of the bits that do relate to you, is industry development within your portfolio, minister? Can you tell me whether there were any grant applications that were unsuccessful in that area?

The Hon. S.E. CLOSE: Yes, of course there would be several grant applications that were unsuccessful. Are you asking for any detail about that? There may be some commercial-in-confidence issues, but we could give you a summary at least.

Mr VAN HOLST PELLEKAAN: I am not trying to breach that, but looking particularly at that increase, if I just get your section of industry development, there is obviously significant increase in the grants there. I am trying to get a feel for the take-up, essentially, and, when there is a significant increase in grants that are handed out, it might be that almost everything that was requested was given or it may not be. It is not inconceivable that almost everything that was requested was granted.

The Hon. S.E. CLOSE: I do have an explanation of the increase of $3.418 million between 2012-13 and 2013-14. An increase of $1 million is due to cabinet-approved funding for Hills Holding Ltd restructuring, which commenced in 2012-13. An increase of $2.8 million is due to a once-off grant in 2013-14 relating to the sale of the Renewal SA property at Felixstow, which was formerly the JP Morgan facility, and a decrease of $0.5 million is due to cessation of funding to Business SA for trade missions, which ended in 2012-13.

The CHAIR: The time having expired for our examination, I thank the minister and her advisers and call the Minister for Communities and Social Inclusion, Social Housing, Multicultural Affairs, Ageing, Youth, and Volunteers, and her advisers. Member for Morphett, you are going to start off are you?

Dr McFETRIDGE: The member for Adelaide and I are going to tag team on this.

The CHAIR: What page are you on?

Dr McFETRIDGE: We are on Auditor-General's Report 2014, Part B, Volume 1, page 281—Department for Communities and Social Inclusion. The question is regarding the concessions and seniors card administration system, CASIS as it is commonly known, started in 2008 by the now Premier Jay Weatherill. Over the page on 282, it says:

The past five audits have commented on the Department's inability to comprehensively reconcile concession payments made with client details maintained on departmental databases.

Concerningly for the committee's sake, it then goes on in the next paragraph:

The Department has advised Audit that the CASIS project is expected to eventually address this matter.

Can you tell the committee what the issue is with reconciling the audit of cases and when it will be eventually addressed?

The Hon. Z.L. BETTISON: I thank the member for Morphett for his question. As you have mentioned, this has been raised in previous audit reports and, as part of the development, DCSI (the department) has commissioned independent reviews of CASIS functionality and project management. We are looking ahead for future ICT projects. Obviously we are looking at the development of a new system with the view to actually creating a single client view of concessions. We are looking to streamline, consolidate and automate those. I think your question was in regard to the reconciliation.

Dr McFETRIDGE: For the information of the committee, it was referring to the first two lines in that paragraph about reconciling payments of client records where, for the past five audits, it has commented on the department's inability to comprehensively reconcile concession payments made with client details maintained on departmental databases.

The Hon. Z.L. BETTISON: If I recall correctly, you asked me this question during estimates and I believe I have written to you. In 2013-14, we undertook a comparison of the energy retailer records against customer records held by the department and we were unable to match 5,173 of 206,200 records held in carts which is the system for energy retailers. The energy retailers were asked to write to the unmatched customers to invite them to contact the department so that their concession eligibility could be verified and, where necessary, a second letter was sent in March 2014.

As at 30 September 2014, it was determined that the extent of overpayments was $311,000 for 569 ineligible customers. A further $68,000 related to 119 other customers who did not respond to the two requests to contact the department. The department is waiting for further information from retailers about a further 2,456 customers to determine the extent of any overpayment. The concessions have been stopped for customers who did not respond to either letter or who have been found ineligible. We have approached the energy retailers involved in the recovery of overpayments identified and, where an agreement has been reached, invoices have been raised with the energy retailers to recover the overpayments.

In regard to water and sewerage, there were only 132 potential mismatched customers and they have all been resolved and none had been overpaid.

Dr McFETRIDGE: On the same reference, minister, can you tell the committee again whether that was 569 energy customers with an outstanding amount of $369,000?

The Hon. Z.L. BETTISON: I think in regard to the extent of overpayments was for 569 ineligible customers.

Dr McFETRIDGE: And the monetary value?

The Hon. Z.L. BETTISON: $311,000.

Dr McFETRIDGE: On the same reference regarding brokerage expenses. The department purchases brokers' services from NGOs to meet individual disability services for client needs. There is a total of $120 million being spent with most of that being spent with Disability SA. Is the minister's department trying to give more work to NGOs or is this a case where the government feels they can do best? I am concerned, though, that there are still some concerns about the management of NGOs on page 283 regarding the performance management of providers, and I will ask some more questions about that in a moment. Can the minister explain why an extraordinary amount of that total value is being used to purchase services that is not going to NGOs, it is going to another government department?

The Hon. Z.L. BETTISON: You have mentioned the increase of brokerage care services and we have seen a slight increase there. In regard to Domiciliary Care, I am responsible for that, and we have seen that increase. I think your question relates specifically to disability.

Dr McFETRIDGE: It is the services that the department is purchasing from NGOs and the government department to Disability SA. It is a total of $134 million that is in question in 2013-14 with $120 million being spent with Disability SA. It seems disproportionate knowing the number of great NGOs we have in South Australia.

The Hon. Z.L. BETTISON: My answer to you would be that the significant growth in brokerage care reflects the ongoing investment in our disability support programs by the state government. It is in line with the emphasis on providing individual support services to people with disability to live and participate in the community. I would probably direct you to the Minister for Disabilities for further information.

Dr McFETRIDGE: Thank you. On the same reference, a little bit further down, Disability SA, receipt of services, it says:

Previous audits have recommended that the Department consider improving controls to ensure that services provided are adequately received before making payments.

Does the minister's department oversee the role in conjunction with Disability SA, I suppose, in making sure that services are actually received before payments are made? If there is an issue, what is the amount that has been paid out that is in question? Has money been paid out where services have only been partially delivered or not delivered at all?

The Hon. Z.L. BETTISON: I think that is a question best directed to the Minister for Disabilities because that area looks after that particular area. The department relies on a range of indicators, communications, work flows to agree services are provided to our clients. We need to strike that balance, obviously, because often we have very vulnerable clients and we need to determine between delivery of that service and how we could get them to acknowledge that, and the best way of gaining that assurance. We use a request contracts reconciliation system that electronically reconciles claims for services being billed to the client service agreement.

In addition to this, the department does sample testing to verify claims, and where necessary seeks additional evidence to confirm that services charged were delivered. We will take on board the Auditor-General's recommendations and look at how a more comprehensive approach can be derived to provide greater assurance that they have been delivered to an accepted standard and appropriately recorded.

Dr McFETRIDGE: Looking at the same reference, the Auditor points out that it is your department that contracts NGOs—or in this case Disability SA, a government department—and that Disability SA has an issue in verifying that their services, or services that have been purchased, are actually being provided before payment is being made. I suppose, not putting it too crudely, that the buck stops with you as the minister who then has to respond to this audit. I have listened to your answer.

There is a similar issue with client trust funds, on page 283. The balance of client trust funds in accounts at the end of the financial year 2014 was $12.5 million, which it has in brackets here—$12.3 million in another area. The trust funds cannot be used by the department to achieve its own objectives. They are not included in the controlled financial statements and are disclosed as an administered item, yet over on page 284 the Auditor says, 'The audit identified that important client files were not adequately protected against unauthorised edit.'

Minister, can you assure the committee—and we have seen this issue with the non-operating funds and the special purpose funds in the Department of Health that were used to support cash flow in hospitals—that these client trust funds are not being used for purposes for which they are not intended?

The Hon. Z.L. BETTISON: The issue has been raised and it has been remedied. The department reviewed the access to client trust files and implemented appropriate restrictions and password security. Client trust management will regularly review these access restrictions. These access restrictions are in addition to the current management controls covering the payment process.

Dr McFETRIDGE: I refer to the same volume, page 284, Requests Contract Reconciliation (RCR) system. The audit points out that the RCR system processes over $100 million in payments to external service providers and clients. The issues that were raised by audit included the current internal audit plan, which had certain issues that have been and are continuing to be addressed to some degree. The schedule is to commence in early 2015 to complete the audit of the requests contract reconciliation system. Minister, can you tell us how much in dollar value was under question? Can you identify whether it was spent in the right area, that particular protections were in place, and how many contracts were in question?

The Hon. Z.L. BETTISON: As noted, the Auditor-General reviewed the requests contract reconciliation system and noted some areas for improvement. The Auditor-General noted that the department had responded positively to audit findings and recommendations. The RCR system facilitates the establishment and contract of payment between the department and disability service providers for the provision of brokerage services to the department's clients. In addition, the RCR system makes payments directly to clients with disability who choose to self-manage their services.

As mentioned by the member for Morphett, the RCR system in 2013-14 processed and managed the delivery of services to 3,200 clients and made over $100 million in payments to external service providers and clients. This system was designed to replace the contract management brokerage system, which is no longer considered fit for purpose. The system is fully operational and being expanded to provide more detail.

The services provided to clients are progressively being transferred to the National Disability Insurance Scheme. The NDIS will eventually take over the management of these brokerage services, at which time the RCR system will be decommissioned.

Ms SANDERSON: I refer to Volume 5, page 1696, Other control matters. The Auditor-General states that Housing SA:

…had not established a process to ensure all tenants that fail or refuse to provide proof of income are referred to the benefits review team for investigation.

Housing SA's response was that a monthly reversion report will be provided to the benefits review team. My question is: has a monthly reversion report been provided to the benefits review team and, if so, when did it start, and for what months have those reports been given?

The Hon. Z.L. BETTISON: I am advised that that process has commenced, but I do not have the date or the month that it started, so I will come back to you with an answer.

Ms SANDERSON: As far as the six-monthly review, there was one scheduled for October 2013 and one in April 2014. Could I have the completion date for each of those reviews, as the Auditor-General stated that they are not being done in a timely manner and they are taking too long? I would like to know when they were both finished.

The Hon. Z.L. BETTISON: I will take that on notice.

Dr McFETRIDGE: I refer to page 1696, going back to the first question from the member for Adelaide. What does it mean that these tenants are being 'reverted'? They are being reverted to what? Are they being kicked out or are they put on a watch list?

The Hon. Z.L. BETTISON: I understand what they do is they revert to market rents. This was something that was raised recently. Only about 12 per cent of our tenants are on market rents and that is what would happen if they do not respond.

Dr McFETRIDGE: I saw the Housing Trust Tenants Association talking about market rents and people living in Housing Trust houses who were earning $80,000, $100,000 or more. How many of those tenants do you have?

The Hon. Z.L. BETTISON: Are you referencing this same page?

Dr McFETRIDGE: Yes.

The Hon. Z.L. BETTISON: We know that most of the people in our homes—probably over 80 per cent—are on fixed incomes, and that comes from a Centrelink payment, whether it be an age pension or a disability pension. We have about 12 per cent who are on market rents. We know now that people do not tend to go on ongoing leases, they go on short-term leases. If someone turns their life around and they are able to increase their income, that is something we obviously support them to do. I think the idea that people are on $100,000 is a furphy, but I would be happy to go back, have a look and come back to you.

Ms SANDERSON: I refer to page 1699 regarding payroll. The Auditor-General states that 7 per cent of the bona fide reports (BFRs, as they are known) have not been certified and 25 per cent were not certified as reviewed within the required time frames. If 7 per cent of payroll reports are not bona fide, how many people are being paid incorrectly or no longer work in the department? For the 25 per cent not certified in a timely manner, how many were incorrect and what is the financial implication?

The Hon. Z.L. BETTISON: The Auditor-General raised this issue and we were looking at the reports being not certified as required. The department has enhanced the bona fide system to provide follow-up reminders to managers that bona fides have not been completed within seven days. If the bona fides are outstanding at 14 days the system automatically escalates the report. In addition, the department will produce regular ageing analysis reports from the bona fide system for review by the department's Director, Quality Assurance, Risk and Business Improvement, and instances of noncompliance will be escalated to the relevant executive director.

We are also looking at other areas for improvement of inconsistency in the Basware recorded delegations and position details, and we are looking at the development of a system which allows automatic comparisons between the CHRIS payroll system, Basware and the financial authorisation register. Most importantly, the Auditor-General did not find any instances where an employee was paid erroneously for work that was not performed.

Ms SANDERSON: Same page: given audit testing found instances where leave in an attendance record was not recorded or was incorrectly recorded in the payroll system, has the minister investigated doing a full audit to ensure their accuracy, that is, a full review rather than an audit?

The Hon. Z.L. BETTISON: We are talking about some of the things that we are going to do, so we are looking at the audit escalation function added to the bona fide process to ensure the regular follow-up of returns. A process was developed to ensure that leave recorded per the leave report agreed with employee records. As noted, the process did raise the awareness of the requirements. However, further refinement is required and will be undertaken. Future verification processes will be conducted on a six-monthly basis.

Ms SANDERSON: When was that six-monthly review done? Was it a random audit or was it a full review?

The Hon. Z.L. BETTISON: I am advised that this is an ongoing verification process, rolling on a six-monthly basis starting on 1 July.

Ms SANDERSON: Page 1697: regarding maintenance having monthly reports now being expanded to include inspection details to enable monitoring of the MTC compliance with contractual requirements, this was advised to be available by September 2014. It is now November. Has this been done and do the reports now include the inspection details?

The Hon. Z.L. BETTISON: The South Australian Housing Trust is expanding the current suite of monthly maintenance reports to include inspection details, site inspected or tenant confirmed, collected at the time of processing invoices. This will enable monitoring of the MTC (multi trade contractor) compliance with contractual requirements. The modified reports have now been developed and implemented.

In July 2014, the audit and compliance assessments procedure, the Housing Trust compliance framework for MTCs, was approved and released. A new compliance inspection database has been created to record inspections by Housing SA staff. This information is then used to calculate the quality of work and a key performance indicator for each contract in accordance with the terms of the contract. Training has been delivered to regional maintenance staff to ensure a standard consistent approach is given to this process.

I was speaking with the executive team about this the other day and some of the more practical aspects of this will be taking a photograph of the completed work and that being attached to the invoice when it is sent in. These are some of the available strategies that we have. Of course, we do the site inspection and tenant confirmed, but having that photo shows that the work has been completed.

Ms SANDERSON: It says that the review would be available by September 2014. I know you mentioned something about July. Can I assume, then, that this is now underway and the reports are now being done monthly?

The Hon. Z.L. BETTISON: As I just spoke previously, in July 2014 there was a new audit and compliance assessments procedure and the compliance framework for the multi trade contractors was approved and released.

Ms SANDERSON: Can the minister advise how many MTC invoices were audited, what percentage this represents and how many were found to have discrepancies?

The Hon. Z.L. BETTISON: We will have to take that on notice.

Ms SANDERSON: Thank you. Page 1704, expenses: the report states that there was a $15 million increase in staff costs and that was due to $10 million being targeted separation payments and $2 million increase in wages. What is the other $3 million and how many staff received targeted separation payments?

The Hon. Z.L. BETTISON: During 2013 and 2014, as part of our workforce transition plan, 79 Housing SA employees were approved to received TVSPs, and the total cost of the Housing SA TVSPs was $9.687 million. An additional $71,400 was paid for payroll tax and $2.14 million was paid for leave on termination.

Ms SANDERSON: Is there still $3 million missing? If the increase was $15 million and $10 million was the TVSPs and $2 million increase in wages, what was the other $3 million?

The Hon. Z.L. BETTISON: I am advised that there was an increase in salaries and wages and their associated on-costs due to salary indexation and converting business systems contractors to employees as part of the business systems workforce transition.

Ms SANDERSON: I thought that would have been included in the $2 million increase in wages but perhaps I will check that with you again later. Going back to pages 1698 and 1699, regarding the water rates, what is the minister doing to ensure that both council rates and water rates are authorised for payment before disbursement occurs? Apparently this procedure used to be developed in the first quarter of this financial year, which ended in September. Has this been done and does it include water rate recovery?

The Hon. Z.L. BETTISON: We do have some systems limitations in regard to council rates as the data is not currently available for the council rate system that enables payments to be approved prior to disbursement. Housing SA is currently working on a change in the timing of council rate payment reports so they can be rigorously reviewed and authorised prior to disbursement. This review process will then mitigate the risk of incorrect payments being made to councils.

Manual council rates notices are checked by the rate calculator for accuracy before loading and system formulas are set for each council as per the notices received and gazetted at the beginning of the financial year. The number of entries in the rate calculator is checked against the number of manual notices received. This process is then subject to an independent checking and auditing process.

During 2013-14, Housing SA processed over 172,000 council rate notices with a value of $44.307 million. The Auditor-General did not find any instances where the incorrect amount of council rates was paid for South Australian Housing Trust owned property.

The CHAIR: The time having expired, I would like to thank the minister and her advisers for their attendance.

Progress reported; committee to sit again.

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