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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
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Auditor-General's Report

Auditor-General's Report

In committee.

(Continued from 3 November 2016)

The CHAIR: As this a formal process, you need to stand to ask and answer questions. Member for Morphett.

Dr McFETRIDGE: I refer to the Report of the Auditor-General, Part A: Executive summary, page 34. It states:

DCSI purchases (brokers) services from non-government organisations to meet individual disability and domiciliary care service client needs. The cost of brokerage expenditure, including domiciliary care, amounted to $168 million in 2015-16. Disability SA represents most brokerage expenditure, with $165 million spent for the year ended 30 June 2016 on approximately 3,960 clients.

Minister, can you tell us what the future will be for brokerage services, looking at those figures, with the transition to the NDIS?

The Hon. L.A. VLAHOS: I thank the member opposite for his question. As we know, the breadth of the NDIS reforms is very large. The brokerage of individual clients is on a one-by-one basis as we hand money over to the commonwealth, so it is impossible to entirely project that matter, given that it depends on how fast the NDIS processes individual care plans and packages for people entering the system. Around 32,000 South Australians are predicted to enter the system at its full birthing in July 2018.

Dr McFETRIDGE: On the same reference, what are the reasons for the costs in the blowout of brokerage expenditure, and has the minister been able to address the Auditor-General's concerns, and I quote:

...weaknesses and failings in brokerage expenditure, internal control arrangements and processes including limitations in contract management, complaints management and operational controls.

The Hon. L.A. VLAHOS: With the growth of the sector and the growth of the number of consumers entering the sector, we put all of our work out to brokerage providers and advise that that is one of the reasons there is such a variance in a few of the areas.

Dr McFETRIDGE: On that same reference and the further reference of Part A: Executive Summary, pages 63 and 64, minister, how can you account for the increase in supplies and services expenditure to $273 million, of which $168 million is brokerage care service costs, or 62 per cent of the cost of supplies and services?

The Hon. L.A. VLAHOS: Please repeat the page reference.

Dr McFETRIDGE: Auditor-General's Report, pages 63 and 64, in Part A: Executive summary.

The Hon. L.A. VLAHOS: Again, in relation to this section of the Auditor-General's Report, it reflects the growth in the sector and the growth in demand for services.

Dr McFETRIDGE: Same reference, minister, can you advise what the increase of $34 million in disability grants over the last financial year comprised of? If there is a significant list, I would be happy for you to take that on notice?

The Hon. L.A. VLAHOS: It is quite a comprehensive list, and we are happy to provide that to you out of the chamber.

Mr DULUK: Minister, I refer to page 43 of Part A: Executive summary. What proportion of the state budget is spent on the delivery of mental health and substance abuse programs and services?

The Hon. L.A. VLAHOS: As I may have mentioned in estimates, it is impossible to thoroughly break down between the health portfolio and the mental health portfolio the exact split of that funding.

Mr DULUK: Could you provide me with a ballpark split of funding?

The Hon. L.A. VLAHOS: An indicative estimate for the budget year 2016-17 is $392 million.

Mr DULUK: That is for mental health and substance abuse, minister?

The Hon. L.A. VLAHOS: Mental health.

Mr DULUK: Do we have a ballpark figure on substance abuse as well, please?

The Hon. L.A. VLAHOS: It will take us a few moments to find that for you, but we will endeavour to do that.

Mr DULUK: Perhaps another on notice as well: at page 43, the Auditor-General's Report projects that at the current rate, South Australia's spending on health will be nearly half of the state budget over the next 15 years. Has any of that rise over the next 15 years been attributable to mental health as well?

The Hon. L.A. VLAHOS: We only work on a four-year cycle, as you know, with budget estimates.

Mr DULUK: I will take that as a no. Moving to page 44, is Transforming Health expected to deliver any financial savings in relation to the cost of providing hospital based treatment and services for mental health patients?

The Hon. L.A. VLAHOS: What page reference is that?

Mr DULUK: Page 44.

The Hon. L.A. VLAHOS: Which particular section?

Mr DULUK: Where it says in financial year 2015-16, the Independent Program Management Office for the Transforming Health program reported 'qualitative and quantitative benefits were not being delivered'.

The Hon. L.A. VLAHOS: I am advised in relation to mental health that there are no Transforming Health savings.

Mr DULUK: Thank you. Just to clarify, minister, does that mean that the rollout of Transforming Health is not expected to have any impact on the cost of treating and supporting mental health patients who, for example, present at a metropolitan emergency department?

The Hon. L.A. VLAHOS: Perhaps the member for Davenport is missing the point. It is a joined-up system and acute admissions are part of the health system across an ED environment. It is a joined-up solution. It is not a matter of isolating it down to a mental health budget line or a health budget line. There are a variety of services that go into maintaining acute healthcare settings.

Mr DULUK: Sticking on page 43, given that one of the goals of Transforming Health is to ensure the financial sustainability of our health system, how will the transfer of PTSD services from the Repat to Glenside impact on the annual cost of delivering inpatient PTSD services, including the cost of treating their comorbidities?

The Hon. L.A. VLAHOS: I am still waiting for further advice on that space. I do not have anything to contribute to your question at this point because I cannot see it in relation to the Auditor-General's Report. You did not reference a line.

Mr DULUK: Sorry, page 43. I will give you a chance to answer the question. Part A: Executive summary, page 43, operating and investing funding—

The CHAIR: Where are we?

Mr DULUK: Page 43, Chair.

The CHAIR: That is not the Executive Summary we are looking at.

Mr DULUK: On page 43?

The CHAIR: That is our page 43 and we cannot see what you are talking about.

Mr DULUK: It says here, 'Operating and investing funding for Transforming Health was included in the 2015-16 state budget for the four years to 2018-19. This included $15 million to cover the capital cost of a new post-traumatic stress disorder clinic.'

The CHAIR: You are in another book, we think.

The Hon. L.A. VLAHOS: You are not in the same book as us.

The CHAIR: Yes, we are not on the same page. It must be in the big book, not the Executive Summary.

Mr DULUK: Appendix to the Annual Report, Volume 2, page 303. Minister, how much of the $52.2 million provided by the commonwealth Department of Veterans' Affairs was payment for the delivery of mental health services and programs?

The Hon. L.A. VLAHOS: On the whole, we received around $52 million for treating a variety of veterans' health card entitlements across the whole healthcare system.

Mr DULUK: Thank you, minister. Does that $52 million contribution include payment or reimbursement for the cost of any treatment or services delivered at Ward 17, and if so, how much was provided?

The Hon. L.A. VLAHOS: That is a highly exhaustive resource task that you are asking of us and we would not have that information at hand in the chamber today.

Mr DULUK: Aside from the DVA funding identified on page 303, did the department receive any other revenue from the commonwealth in 2015-16 as reimbursement for treatment of services delivered at Ward 17?

The Hon. L.A. VLAHOS: I will have to take that on notice, but I have never, as the minister, inquired into individual units' revenue streams. That is an unusual question.

Mr DULUK: What proportion of total Ward 17 expenditure is covered by commonwealth funding?

The Hon. L.A. VLAHOS: I have just answered that question.

Mr DULUK: You have never inquired how much your department receives from the commonwealth government in relation to Ward 17 funding? As minister, you have never once made that inquiry?

The Hon. L.A. VLAHOS: The model of care group that is reporting to the oversight group is looking at models of care. How that unit runs its budget and reports through the normal local area health networks is for individual questions. It is not for the minister to ask people how many bandaids they use or how they are funded.

Mr DULUK: I am not asking how many bandaids were used: I am asking how much commonwealth funding is given in relation to Ward 17. Nevertheless, how is income received for Ward 17 by the state government?

The Hon. L.A. VLAHOS: Are you referring to commonwealth government revenue again?

Mr DULUK: Correct.

The Hon. L.A. VLAHOS: As previously stated, I have answered that question.

Mr DULUK: So, you are not aware of how your department receives funding from the commonwealth government in relation to Ward 17?

The Hon. L.A. VLAHOS: What is your page reference?

Mr DULUK: Page 303.

The Hon. L.A. VLAHOS: As I have previously stated, the healthcare system in this state, of which mental health and DASSA (Drug and Alcohol Services South Australia) are a part, receives via our contracting agreement with the commonwealth government a funding formula for the case care interactions that consumers have with our state healthcare system, I am advised. We do not break it down to individual units.

Dr McFETRIDGE: I refer to the Auditor-General's Report, Part B, Agency audit reports, page 58 under Brokerage expenditure. At the top of page 59, under Receipt of services, it states:

Past audits have recommended that DCSI improve controls to ensure that brokerage services provided by NGOs are adequately received by clients before making payment. DCSI was encouraged to consider:

involving clients in substantiating receipt of services

reviewing internal NGO documentation for client attendance and quality of services provided

reviewing complaints/feedback mechanisms to target NGOs for further assessments.

One particular provider was of particular concern. The report states:

The team identified concerns about whether:

the care provided by this service provider was in accordance with their contracted level of care

this service provider charged for care not actually provided

this service provider was able to adequately account for staffing arrangements to support care requirements when requested to do so.

Can you tell the committee what investigations have been undertaken, and can you assure the committee that that particular case, and other cases like it, has actually been looked after?

The Hon. L.A. VLAHOS: I am aware of the comments made by the Auditor-General, but I am also advised that there is a new DCSI incident management unit headed by the new CE, Tony Harrison. He has put in place with his team several new measures to strengthen internal audit controls in the department, particularly around brokerage.

Dr McFETRIDGE: How many other NGOs have been investigated and found wanting in the care provided, charging for services that were not actually delivered, or the service provider not being able to account for staffing arrangements?

The Hon. L.A. VLAHOS: There is plenty of activity with people with care concerns who we always monitor, quality of care and care concerns for frail and vulnerable people who interact with our department on a regular basis, but none of them have reached the level that this particular one did. As I have indicated previously, I am unable to comment further at this time.

Dr McFETRIDGE: On page 59, it says—this service provider was investigated—that further services with this service provider were discontinued. The estimated amount under review for the period audited is $2.2 million. Is that $2.2 million that has been paid to this service provider for services that were not delivered? If so, how much of that $2.2 million has been clawed back?

The Hon. L.A. VLAHOS: As it is under investigation, I cannot comment. I have been given legal advice to that effect.

Dr McFETRIDGE: So, we cannot get any further information about the $2.2 million the Auditor-General has talked about and whether that is still the outstanding amount. Has it been reduced or has any been clawed back at all?

The Hon. L.A. VLAHOS: No, I am unable to comment at this stage.

Dr McFETRIDGE: Can you tell us whether there are any other organisations that are in a similar boat?

The Hon. L.A. VLAHOS: As I said previously, no.

Mr DULUK: On page 197, Part B, the RSL Repat site, approximately halfway down the page, did the now abandoned $15 million RSL Repat park proposal include the option of any mental health services being delivered on the Daw Park site, either by SA Health or non-government providers?

The Hon. L.A. VLAHOS: That is outside the scope of my portfolio.

Mr DULUK: I thought your portfolio related to mental health and, of course, the RSL site. Ward 17 is on that RSL site, but that is fine. Does the recently announced replacement deal with ACH consortium envisage that there will be any mental health services at the Daw Park site once it has been redeveloped?

The Hon. L.A. VLAHOS: I have not seen the final proposal for that, nor would I, because I am not the Minister for Health.

Mr DULUK: But surely as the Minister for Mental Health you would have an interest in knowing if there were going to be any mental health services provided at the site in any proposed redevelopment.

The Hon. L.A. VLAHOS: Certainly, I would have an interest but, as I said, I have not seen that proposal today.

Mr DULUK: Have you made any inquiries with the health minister?

The Hon. L.A. VLAHOS: I may do so in the future.

Mr DULUK: Have you to this stage?

The Hon. L.A. VLAHOS: I make lots of inquiries with the health minister on many issues on a daily basis; some of them relate to ongoing units of care that are spread out across the state where we intersect on a daily basis.

Mr DULUK: Have Ward 17 and the mental health services been one of those issues you have raised with the minister on a daily basis regarding the consortium at ACH going forward?

The Hon. L.A. VLAHOS: I have not raised the consortia with him today, no.

Mr DULUK: So, to this date you have not raised with the Minister for Health anything in relation—

The Hon. L.A. VLAHOS: I said 'today'.

Mr DULUK: I am asking to date.

The Hon. L.A. VLAHOS: As I said, I raise a number of issues across clinical science across the state on a regular basis.

Mr DULUK: To date, have you raised with the Minister for Health the provision of mental health services at the Daw Park site in relation to the ACH consortium? It is a simple yes or no.

The CHAIR: It is up to the minister to answer any way she wishes, member for Davenport.

Mr DULUK: True.

The CHAIR: It is almost badgering.

The Hon. L.A. VLAHOS: Yes, it is almost badgering, and I would agree with the Chair about that, but the member for Davenport is quite good at badgering. He has a reputation for it, but we are not allowed to typify people as animals in this chamber—

The CHAIR: That is out of order.

The Hon. L.A. VLAHOS: —and I would not do that.

The CHAIR: That is out of order now.

Mr DULUK: I still just want to get my head around whether the Minister for Mental Health—

The CHAIR: It is your time. You do whatever you wish.

Mr DULUK: Exactly, and the minister can answer the question if—

The CHAIR: She can or not.

Mr DULUK: Has the minister in her capacity as the Minister for Mental Health spoken to the health minister regarding the provision of any mental health services at the Daw Park site in relation to the ACH consortium?

The Hon. L.A. VLAHOS: The minister and I talk about mental health and wellbeing across the state in a long-term way. We look at past service models, we discuss future service models and how we can work across a variety of spaces, whether it is drug and alcohol services, whether it is mental health, whether it is the connection for comorbidities—a variety of different spaces.

Mr DULUK: I refer to page 142. In the financial year 2015-16, how many of the presentations to metropolitan hospital emergency departments were mental health related, and how does this compare with the number of mental health-related presentations for the previous year, minister?

The Hon. L.A. VLAHOS: The definition of a mental health presentation is variable according to the people dealing with it at an ED triage point. It would depend whether the person had co-morbidities and what the principal diagnosis was at point of admission or subsequent readmissions.

Mr DULUK: But, minister, do you keep records of those who have presented and been categorised as mental health related patients?

The Hon. L.A. VLAHOS: Whilst we are doing work in definitional spaces for principal diagnosis and improving our data recovery and our data usage across the department (and we know that the member for Morphett is a regular visitor at the dashboard), we look at a variety of different ways we release the information. I am not sure what your exact definition of a mental health admission would be. That would be a matter for long discussion outside of this chamber because it varies across different units and across different clinical teams.

Dr McFETRIDGE: I hope that the advisers do not mind swapping back and forward a little here. I am referring to the Supplementary Report of the Auditor-General that was handed down today and specifically pages 2 and 3, key audit findings.

Minister, can you tell the committee whether any of your agencies, particularly Disability Services SA, is included in the Auditor-General's finding that 'two of the four agencies reviewed were not effectively managing patching', that agencies were operating unsupported legacy servers, that agencies were not effectively managing privileged user access to Active Directory and that security controls applied to mobile devices did not meet best practice guidelines in respect of two agencies?

Minister, can you assure the committee that the security controls of Disability Services SA (particularly with the sensitive information it has) are up to date, that there are not unsupported legacy servers operating and that the agency has implemented changes, upgrades, to its IT systems to make sure that the people who are using these systems, and also the people who are listed on the systems, are being protected?

The Hon. L.A. VLAHOS: Considering that I have only had the report for a little on an hour, it is a matter that I will be asking my agency to report to me on.

Dr McFETRIDGE: Minister, I would have thought that you would have had discussions, obviously, in here about the report. It lists recommendations and then also page 4 of this report also lists agency responses, so, obviously there have been responses. So, you have not been briefed on the issues or responses; is that correct?

The Hon. L.A. VLAHOS: Not in the half hour I have had between question time and now.

Mr DULUK: I refer to Volume 2, page 301. How many NGOs received funding in 2015-16 to deliver mental health programs and services?

The Hon. L.A. VLAHOS: To get to the nub of your question at the end, and then I will give you some more fulsome information, there is a number of smaller grants under $10,000.

Mr Duluk interjecting:

The Hon. L.A. VLAHOS: In time, I would be happy to provide a list. I suspect that a lot of them relate to suicide prevention, community capability and capacity grants that we are building across the state, and that is a fantastic space. I do know that there are more than the two pages here, a variety of grants in this space, that I am happy to provide notice of.

Mr DULUK: Can you provide a figure for total funding, as well, for all those organisations in that space?

The Hon. L.A. VLAHOS: I am advised that it is around $1.446 million.

Mr DULUK: Staying on that line, which non-government organisations were funded under mental health support, as listed on page 301, if you have that at hand?

The Hon. L.A. VLAHOS: At this point in time, I only have the figures broken down specific to the grants, not by the nature of the product that they are interacting with.

Mr DULUK: On Part B, page 142, how many of the 2,036 FTE departmental positions were dedicated to the development and delivery of mental health services and programs?

The Hon. L.A. VLAHOS: Are you referring to all mental health staff who would be interacting with mental health clients or consumers in this space, or are you referring particularly to SA Health department staff?

Mr DULUK: I will take both: the departmental first, please.

The Hon. L.A. VLAHOS: For the department, it is 16; but, for the rest of the mental health team that works to support that, it is a large number.

Mr DULUK: Do you have the number?

The CHAIR: We will let him have just one more. Do you have a number, and you can say anything you like.

The Hon. L.A. VLAHOS: It would require a lot of work and time to find that number.

The CHAIR: The time having expired for the examination of this portion of the Auditor-General's Report, we thank the minister and her advisers for their assistance and the members for Davenport and Morphett for their questions.

I ask the next group—that is, Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy—to join us as quickly as possible.

Mr KNOLL: In the Supplementary Report, State finances, page 12, key points, the projected surpluses for 2016-17, 2017-18 and 2018-19 are significantly less than was projected for these estimate years in previous budgets. Can you confirm what has resulted in these falls in the projected surpluses?

The Hon. A. KOUTSANTONIS: I would refer you to the budget papers.

Mr KNOLL: Can I go to the Supplementary Report, RevenueSA, Information Online system, October 2016, page 5.

The CHAIR: Which report are you in?

Mr KNOLL: The Report of the Auditor-General, Supplementary Report, RevenueSA, Information Online system.

The CHAIR: From when?

Mr KNOLL: October 2016.

The CHAIR: We do not have a copy, but off you go.

Mr KNOLL: It was stated in estimates two years ago that stage 3 of RISTEC was abandoned, and that is relating to stamp duties and other sundry taxes. For the taxes that were abandoned, can you give an update on whether a new IT system is going to be procured for those taxes?

The Hon. A. KOUTSANTONIS: No, there is no decision to do that. We are operating on legacy software.

Mr KNOLL: Can you give us an understanding of what that legacy software looks like? What is the process? I assume that under RISTEC there was going to be an enhanced level of functionality and that there would have been a more streamlined cost-effective process. How is the current process deficient to what RISTEC could have delivered?

The Hon. A. KOUTSANTONIS: I am advised that it is business as usual and that there has been no discernible difference.

Mr KNOLL: The question then is: why are we implementing RISTEC in the first place if there was no discernible difference in upgrading?

The Hon. A. KOUTSANTONIS: There was an assumption that the legacy systems would eventually fail. We are trying to bring six systems into one new program. Obviously, that did not go as well as planned. Treasury, being who they are, do not like spending more money than they absolutely need to. The legacy programs are working and working well. Everyone is paying their taxes. We are collecting the taxes. The budget is in surplus. Everyone is happy.

Mr KNOLL: If I can go to page 2 of the same Supplementary Report, has the Treasurer received any indication of the potential value of transactions impacted by errors in the Revenue Information Online system?

The Hon. A. KOUTSANTONIS: I am advised that there is nothing significant that we are aware of.

Mr KNOLL: Would you care to clarify what 'nothing significant' means? Is it a few million dollars? Is it a few dollars or a few cents?

The Hon. A. KOUTSANTONIS: I am advised there is nothing in that order at all.

Mr KNOLL: What costs were there to external service providers?

The Hon. A. KOUTSANTONIS: Without being difficult, for what purpose? For all DTF or just RevenueSA?

Mr KNOLL: In relation to the Revenue Online Information system.

The Hon. A. KOUTSANTONIS: The budget for RISTEC is $55.8 million.

Mr KNOLL: Is there no ongoing external service provider in relation to the RIO system?

The Hon. A. KOUTSANTONIS: We are undergoing a procurement process at the moment, so we do not know the cost until that procurement process is finalised.

Mr KNOLL: Can the Treasurer outline exactly what is involved in that RIO procurement process, as in what functionality is the government seeking to acquire under this procurement process?

The Hon. A. KOUTSANTONIS: I am advised that it is business as usual. There are some things we do not have knowledge of, which we require from our external users. With the programs we are on, we use that for information we need to run the programs.

Mr KNOLL: I am still extremely unclear as to what the RIO procurement seeks to do. Is the Treasurer suggesting that he does not know what it is that the RIO procurement is seeking to achieve?

The Hon. A. KOUTSANTONIS: I am advised that it is just business as usual maintenance of that software, so we are maintaining it. We need to procure to have people help us manage it and run the software long term.

Mr KNOLL: Is there a rough or estimated cost of what this procurement is going to be?

The Hon. A. KOUTSANTONIS: We are currently out to the market, so I do not want to bell the cat.

Mr KNOLL: On Volume 5, page 4, the bottom table in regard to SA Water, Treasurer, you have a representative on the SA Water board. Can you explain what, if any, formal communication you have with that representative?

The Hon. A. KOUTSANTONIS: I receive briefs from my head of budget branch, who is the observer on the board. From time to time, if they feel there is something to be brought to my attention, they bring it to my attention.

Mr KNOLL: When you say there are briefs, is there a regular meeting and regular correspondence that happens between you and that representative?

The Hon. A. KOUTSANTONIS: From time to time, when they feel it is appropriate, they bring things to my attention.

Mr KNOLL: Are they there as an observer or as an active participant at the SA Water board meetings?

The Hon. A. KOUTSANTONIS: An observer only.

Mr KNOLL: You said in your previous answer that from time to time they bring things that you feel are necessary to your attention. Have you given any sort of direction to your Treasurer's representative as to what you believe is something of note to report back to you or bring a brief back to you on?

The Hon. A. KOUTSANTONIS: I have complete faith (1) in our board that runs SA Water, who are independent, and (2) in my head of budget branch, who is a very talented and financially astute representative and who will inform me of anything that will come to my concern. She knows me, I know her, and if there is something she needs to tell me she will tell me.

Mr KNOLL: I think we are talking about Linda Hart, your Treasurer's representative?

The Hon. A. KOUTSANTONIS: It might be Linda Hart; she has changed her name.

Mr KNOLL: It has changed a few times. While we are getting that answer, SA Water is seeking to inquire into privatisation of all or part of its business. You would consider that your Treasurer's representative should not have brought that to your attention?

The Hon. A. KOUTSANTONIS: If you could just help me out, I cannot remember when that report was commissioned.

Mr KNOLL: It depends. The report was commissioned somewhere late in 2014. Estimates said that it was at the 14 December board meeting that the report would have been brought to the SA Water board.

The Hon. A. KOUTSANTONIS: I understand that any work they did in the line of questioning that the member is leading towards, which is the option for the sale of SA Water, I could be wrong but, if my memory serves me correctly, this work was begun before the election, but I will check. It was part of the strategic planning process and, once they completed that, they brought it to the board.

If the member is suggesting that I was complicit in some way in this directive that they were planning options for the sale of SA Water, it is the government's policy that SA Water is not for sale. I am not trying to hedge this. Not only have we no plans to sell SA Water but we believe SA Water must remain in public hands, and we will not sell it. We have been in office since 2002 and have not sold SA Water, and if we are re-elected we will not sell SA Water.

Mr KNOLL: I have had it confirmed that it was 14 December when the first report was completed, and then the second report was completed in March 2015.

The Hon. A. Koutsantonis interjecting:

Mr KNOLL: I assume it was brought to the board's attention at the point at which it was completed. I assume that is normally what happens: you commission a report and when it is completed you bring it to the board. Treasurer, you have been the Treasurer at least since the election; we had a few before that, but you have been there for a little bit of time now. I want you to unequivocally say that you had no briefing or indication from your representative, who was at those board meetings, that they did not in any way bring it to your attention, as you say, believing that they will bring to your attention only things that are of importance.

The Hon. A. KOUTSANTONIS: I am advised that they did not.

Mr KNOLL: I refer to the Supplementary Report, State Finances, page 28, first line. In relation to the $688 million of equity retained by the MAC as at 30 June 2016, what is Treasury's latest advice as to the cost of winding up the tail?

The Hon. A. KOUTSANTONIS: We are still undertaking a body of work to do an analysis of the winding-up of the tail, so it would be premature to talk numbers at this early stage. Once that work is completed, we will make announcements in either the Mid-Year Budget Review or the budget.

Mr KNOLL: Has a decision been made on which entity will be responsible for winding up the tail?

The Hon. A. KOUTSANTONIS: I am advised no, and I am also advised that we are still conducting a body of work to understand how best to wind up the tail. Once that is completed, we will make a statement in the budget or the Mid-Year Budget Review.

Mr KNOLL: In the event that the cost of winding up the tail is less than the equity that is carried, has any decision be made in relation to what will happen with that remaining equity?

The Hon. A. KOUTSANTONIS: It is a hypothetical question until the body of work is completed.

Mr KNOLL: I refer to the same supplementary report, page 46. Has Treasury included a dividend payment for HomeStart in its forecast for the forward estimates?

The Hon. A. KOUTSANTONIS: I refer you to Budget Paper 3, Budget Statement, page 80. The HomeStart dividends 2015-16 estimated result is $11.5 million; the 2016-17 budgeted is $6.8 million; the 2017-18 budgeted is $6.9 million; the 2018-19 estimate budget is $7 million; and the 2019-20 estimate budget is $7.4 million. This was published in the last budget. You should tell the people who wrote the question to read the budget papers.

Mr KNOLL: Are any of those dividends linked to the scoping study into transferring the loan book?

The Hon. A. KOUTSANTONIS: I am advised no.

Mr KNOLL: I refer to the Supplementary Report, State Finances, page 48. In relation to the funding ratio for return to work, which remains above 100 per cent at 112.9 per cent, when will the scheme provide a further reduction in premiums to businesses?

The Hon. A. KOUTSANTONIS: I refer the member to the Attorney-General, the Deputy Premier, who is the minister responsible.

Mr KNOLL: I refer to Part A: Executive summary, page 21. Can you advise whether any of the research to be produced subsequent to this $10 million grant program has been completed and published? This is in relation to 'other grants', the second bullet point.

The Hon. A. KOUTSANTONIS: What page?

Mr KNOLL: Page 21, Other grants.

The Hon. A. KOUTSANTONIS: That is the OZ Minerals grant. Could you repeat the question?

Mr KNOLL: Can you advise whether any of the research to be produced subsequent to this $10 million grant program has been completed and published?

The Hon. A. KOUTSANTONIS: I will take that on notice and get back to you.

Mr KNOLL: If you would like also to take on notice what the schedule of payments for the remainder of the $10 million to be paid is. Also, will this research be made available to other miners and to the public?

The Hon. A. KOUTSANTONIS: It is my understanding that the arrangements between OZ Minerals is, but all the research conducted on the basis of the processes that they are investing the $10 million in will be made available to other South Australian copper producers, miners and explorers. I will double-check that for you, but that was my understanding.

Ms CHAPMAN: State development is at page 444, and I think you have already indicated, Madam Chair, that the Department of Treasury and Finance is at page 507. In respect of the State Administration Centre sale, Treasurer or minister, whichever one you are acting under to handle this, can you advise whether the Auditor-General has conducted any investigation in relation to the sale process surrounding that sale?

The Hon. A. KOUTSANTONIS: I am advised that it is par for the course in his roles and duties. He audits the entire agency. I am advised there is nothing specific that he has looked at but he may choose to. I will have to ask him, but there is nothing I have seen published.

Ms CHAPMAN: Is it being sold under your responsibility as minister or Treasurer?

The Hon. A. KOUTSANTONIS: I am advised as Treasurer.

Ms CHAPMAN: Finally if I could ask then in relation to the settlement which has now had three settlement dates, can you advise us when the settlement date is and what the expected consideration is that will be paid?

The Hon. A. KOUTSANTONIS: Today at 11.30.

Ms CHAPMAN: Today at 11.30, and what were the considerations paid?

The Hon. A. KOUTSANTONIS: We have not publicly released the value as yet.

Ms CHAPMAN: So, the settlement today was just to receive a down payment or a deposit?

The Hon. A. KOUTSANTONIS: I am advised that today was supposed to be complete settlement.

Ms CHAPMAN: How much did you receive? Perhaps I misunderstood what you said before.

The Hon. A. KOUTSANTONIS: I am advised that the proponents have not settled as yet.

Ms CHAPMAN: At all?

The Hon. A. KOUTSANTONIS: At all.

Ms CHAPMAN: No money has been received today. Has another settlement date been set?

The Hon. A. KOUTSANTONIS: We have a deposit of a value of $5 million, and no other date has been set as yet.

Mr VAN HOLST PELLEKAAN: Minister, do you have your mineral resources and energy advisers here now?

The Hon. A. KOUTSANTONIS: Yes.

Mr VAN HOLST PELLEKAAN: On Part B, Agency audit reports, page 449, Purchase cards, during last year's Auditor-General's examination, the minister assured the house that remedies had been put in place to prevent inappropriate expenditure on purchase cards, and he said he was satisfied with those processes. Why haven't those processes been resolved, minister?

The Hon. A. KOUTSANTONIS: I am advised that the findings of the Auditor-General last year were minor in nature in terms of the breaches. I understand protocols have been put in place to give CEs direct accountability and the ability to approve certain transactions. I am satisfied that the agency conducts itself appropriately. I also remind the member that there are now independent bodies that can oversee this type of behaviour. In terms of the audit process, I am comfortable with the procedures put in place by the agency.

Mr VAN HOLST PELLEKAAN: Minister, given you are comfortable that the procedures put in place after last year's finding that there was a problem are satisfactory, why is it that in this year's report it states:

Our review of compliance with these requirements, however, identified purchases of flowers for staff, staff functions, software and fuel within the metropolitan area, inconsistent with DSD's policy.

The Hon. A. KOUTSANTONIS: I am advised that that policy has now been amended by DSD and the chief executive has the ability to approve those transactions. I understand the flowers were in a case of bereavement and I think it only appropriate that that was authorised. I stand by the department.

Mr VAN HOLST PELLEKAAN: Thanks, minister, but what I am getting at is this: 12 months ago we had an issue like this and you said it would be fixed, and here we are again, 12 months later. It was clearly not fixed in the view of the Auditor-General and you are saying again, a year later, it has now been fixed. Has it been fixed?

The Hon. A. KOUTSANTONIS: I am satisfied with the procedures that are in place, yes.

Mr VAN HOLST PELLEKAAN: Same answer as last year?

The Hon. A. KOUTSANTONIS: I am satisfied that I think my agency is an exceptional agency full of people with goodwill, and if there are any safety procedures put in place to make sure that—the chief executive has oversight of these decisions so there is now an accordance with State Development policy, I am advised. I have the confidence that the chief executive and his officers are conducting themselves appropriately.

Mr VAN HOLST PELLEKAAN: Would it be accurate to say, given that the Auditor-General, two years in a row, found that policies were not being followed, your remedy is to change the policy?

The Hon. A. KOUTSANTONIS: Yes.

Mr VAN HOLST PELLEKAAN: I refer to page 447, and I am going to the middle of the page, about grant payments. What grant reporting requirements 'were not promptly monitored to ensure the grantee complied with the terms and conditions of the grant'?

The Hon. A. KOUTSANTONIS: I am advised that there is one grant under the RAES scheme where the District Council of Coober Pedy did not submit their orders of financial statements for the years ending 30 June 2014 and 30 June 2015. I am advised that in the absence of the relevant information in the audited financial statements, DSD may be paying the council more funding than is required. The council has undergone significant governance and leadership issues over the past two years, with six different chief executive officers and three different mayors, and a significant amount of disruption to the operation of the council.

Over this period, I am advised the department is working closely with the council and its electricity generation provider to agree in terms of a long 20-year contract—a power purchase agreement—for a hybrid renewable energy generation project which is underpinned by a South Australian government commitment to a 20-year dealer grant with the council to enable the project to proceed. I understand that the reconciliation of the accounts in reducing the planned subsidies to the council by approximately $2.2 million is in consideration of overpayments processed during 2013-14 and 2014-15, primarily due to the reduction in the price of diesel. The council did not report to me on a timely basis as they should have, but the large level of dysfunction within that council has made it difficult, and we are trying to remedy it.

Mr VAN HOLST PELLEKAAN: I certainly agree that the council has had great challenges lately. The overpayment that was due to a reduction in the value of the diesel, has that money been repaid or are you in negotiations to arrange repayment?

The Hon. A. KOUTSANTONIS: I am advised that it will be repaid this year.

Mr VAN HOLST PELLEKAAN: On the same page, mineral licensing revenue, what measures have been put in place to ensure that mineral licensing revenue receipts, invoices and credit notes are processed appropriately and that revenue is not lost through the misappropriation of cheques or non-receipt of invoice amounts?

The Hon. A. KOUTSANTONIS: I am advised that audit raised the need to reinforce the requirements to ensure that cheque receipts, manual invoices and credit notes are appropriately processed and reviewed for mineral licensing. The cheque reconciliation, review of manual invoices and credit note review and reconciliation have been reimplemented in 2016-17. The cheque reconciliation was also completed for 2015-16 and did not identify any discrepancies. Established controls that mitigate the risks identified for revenue and accounts receivable, including credit notes, are reviewed and authorised by the delegate prior to processing, and outstanding certificate invoices are checked and reported to the executive board on a monthly basis.

Mr VAN HOLST PELLEKAAN: Are the concerns raised by the Auditor-General linked to the government's change in policy about 18 months ago, whereby mining companies and producers had to pay their royalties bimonthly, rather than six-monthly or annually, as it was?

The Hon. A. KOUTSANTONIS: I am advised no.

Mr VAN HOLST PELLEKAAN: What was the cause of the problem?

The Hon. A. KOUTSANTONIS: I am advised that, firstly, there were no discrepancies found and that, secondly, it is standard audit process to review these processes regularly, and that was what was conducted.

Mr VAN HOLST PELLEKAAN: If there was no problem found, why would the Auditor-General say that he has concerns, as follows:

Our review revealed a need to reinforce, or reintroduce, requirements to ensure cheque receipts, manual invoices and credit notes were appropriately processed and reviewed for mineral licensing—

if there was not actually a problem?

The Hon. A. KOUTSANTONIS: The process I spoke to you about previously had ceased. Audit raised concerns, and then we reintroduced it.

Mr VAN HOLST PELLEKAAN: On page 453, OZ Minerals, and I was here when you were asked some questions by the member for Schubert, now that you have your adviser with you can you advise when the remaining $6 million will be paid to OZ Minerals from their $10 million grant?

The Hon. A. KOUTSANTONIS: I am advised that we have budgeted to pay $3 million in 2016-17 and a further $3 million in 2017-18.

Mr VAN HOLST PELLEKAAN: Are they simply time line scheduled targets, or are there obligations that OZ Minerals needs to fulfil in those time lines to receive those two lots of $3 million?

The Hon. A. KOUTSANTONIS: I will get you an answer on notice from Ted Tyne, who I think is looking after this. I can get you a more detailed answer.

Mr VAN HOLST PELLEKAAN: Has the government attracted a third company to move its head office to Adelaide?

The Hon. A. KOUTSANTONIS: You will have to wait and see.

The CHAIR: The time having expired for examination of this portion of the Auditor-General's Report, we thank the Treasurer and his advisers for their attendance here today and the member for Stuart for his questions. We ask the Minister for Regional Development and Local Government to move into place as we begin the next portion. The member for Stuart and the member for Goyder are going to take these questions.

Mr VAN HOLST PELLEKAAN: We will start on Appendix to the Annual Report, Volume 4, page 95.

The CHAIR: Is it local government or regional development first?

Mr VAN HOLST PELLEKAAN: Regional development. For the minister's benefit, we will take roughly half the time on regional development and roughly half on local government. On page 95, about a quarter of the way down, the table of finances, Regional Development Fund, what funding has been allocated to Regional Development Australia organisations beyond 2016-17?

The Hon. G.G. BROCK: I am advised that the government has committed $3 million per annum for three years, beginning in 2015-16, then 2016-17 and 2017-18 to support the seven regional RDAs.

Mr VAN HOLST PELLEKAAN: Is there any money forecast beyond 2017-18?

The Hon. G.G. BROCK: I have not committed any funds after that.

Mr GRIFFITHS: Thank you for the confirmation of the money that we know is available; it might be revised, but we know it is there. I am intrigued, though, because you talked about the $3 million for each of those three financial years, but page 95, about a third of the way down, refers in the 2014-15 year to $2.768 million in expenditure and, in the 2015-16 year, to $2.515 million, so you are underspent on the $3 million for each of those financial years. Do the unspent funds automatically roll over to be available in the 2016-17 year?

The Hon. G.G. BROCK: At the time of the Auditor-General's Report being handed down, there were some milestone payments yet to be completed to fully spend the $3 million committed. The remaining payments will be made to RDAs as Regions SA receives confirmation of milestones achieved.

Mr GRIFFITHS: To confirm the full $3 million expenditure for each of those two financial years, even though there are timing issues on payments being incurred, my question is: when you have the benefit of some funds from 2014-15 that have not yet been paid, why was 2015-16 not above $3 million?

The Hon. G.G. BROCK: I am advised that it is very hard because it is a running thing. It is achieving the milestones. As each milestone is achieved, we need to pay that out, and the continuation of that keeps flowing on.

Mr VAN HOLST PELLEKAAN: Again, on page 95, the next line down, Jobs Accelerator Fund, did the additional $2 million for the local government traineeships program announced in October this year come from the Jobs Accelerator Fund?

The Hon. G.G. BROCK: The $2 million announced in October is coming from the Regional Development Fund.

Mr VAN HOLST PELLEKAAN: Just to be sure, I was asking whether it came from the Jobs Accelerator Fund. You are confirming that it comes from the Regional Development Fund?

The Hon. G.G. BROCK: The first $2 million came from the Jobs Accelerator Fund and the $2 million that was identified or announced in October is coming from the Regional Development Fund. I am not sure whether you are getting confused with the Treasurer's Jobs Accelerator Fund, which he also announced recently. My Jobs Accelerator Fund, as such, had $10 million in it and that is fully committed.

Mr VAN HOLST PELLEKAAN: I appreciate that clarification. I was definitely talking about your Jobs Accelerator Fund under Primary Industries and Regions. Is it your intention to continue to use the RDF for that traineeship program and, if so, for how long?

The Hon. G.G. BROCK: Yes, we will continue to use the Regional Development Fund to maximise job opportunities throughout the regions. The final allocation or decision about how we use the rest of the funds is being identified currently as we speak. I want to be working with the councils, working with industries and the federal government to try to maximise the opportunities for jobs in our regions.

Mr VAN HOLST PELLEKAAN: The Local Government Traineeship Fund may or may not continue out of that RDF money?

The Hon. G.G. BROCK: Yes.

Mr VAN HOLST PELLEKAAN: I want to move on to Part B of the Agency audit reports. I am moving to a different book now and I refer to page 331. Minister, I note that there is only $2.3 million in grants in the 2014-15 year and then $17.6 million in the 2015-16 year. What is the total amount of funding approved for projects in the Regional Development Fund?

The Hon. G.G. BROCK: We need to get the answers to you. I could take that on notice but we do not want to do that. The $15 million per annum from the Regional Development Fund is fully committed for the 2014-15 and 2015-16 financial years. In addition, I brought forward round 3 of the RDF to ensure that the 2016-17 funding was committed to projects before the end of the 2015-16 financial year, to be invested in our regions without delay. All projects that have been approved are or will be the subject of formal funding deeds. We need to have that. The total actual expenditure for 2015-16 against RDF commitments was $17.6 million.

Mr GRIFFITHS: I appreciate the information from the minister. That is total expenditure, that is, dollars that have gone out, but what are the committed dollars, including the sum that had been granted to various recipients, but the transfer of the funds has not yet occurred in the 2015-16 year for which it was granted?

The Hon. G.G. BROCK: $33 million in grants were awarded in rounds 1 and 2 of the RDF, supporting 61 projects worth a combined $5.6 billion to the state's economy and leading to the creation of more than 900 new, ongoing full-time equivalent jobs. Eighteen applicants have accepted grants of offer under RDF round 3. Their projects will create around 420 new ongoing full-time equivalent jobs and generate more than $139 million of direct investment.

Several projects have already been announced, and I look forward to further announcements of successful projects in the next few weeks. This shows that there is confidence in our regions and businesses out there are ready and willing to invest. One of our aims is to create new opportunities and advance our regional communities and economies.

Mr VAN HOLST PELLEKAAN: Thank you, minister, and I agree with the importance of providing money to regional areas. What the member for Goyder and I are trying to understand is this: you have a budgeted amount, then you have a committed amount, but then you actually have a paid out amount. Of the money that you just gave us that is committed to programs, how much has actually been delivered, and how much is still actually outstanding, still to be paid out of those commitments?

Members interjecting:

The CHAIR: Can you put it on record so that Hansard can hear it, maybe, and explain it?

The Hon. G.G. BROCK: I was asking the member if he is talking about the first two rounds, and I just reaffirmed with the member.

Mr VAN HOLST PELLEKAAN: What I am asking about is that there are actually three rounds. Of any money that has been committed, how much of that in each round has been actually paid and how much of that is outstanding, still to pay?

The Hon. G.G. BROCK: That is a lot of information and we want to give you the right answer. We will take that on notice and get back to you as soon as we can.

Mr VAN HOLST PELLEKAAN: Thank you, minister, I appreciate that. Are there any grants that have been committed that the minister has any concerns about that will not actually be delivered? For example, if an application has been put in, a grant has been made and then the company changes its mind, pulls out or does not fulfil the conditions in any way.

The Hon. G.G. BROCK: Grant funding is offered to the successful applicant on a number of conditions, including that the project is completed at the same scale of investment and that the same job outcomes, as stated in the application, are achieved. Despite the best efforts of the successful applicant and the comprehensive due diligence process by the government, circumstances can and sometimes may change.

For example, a company or organisation may change the direction of their project, be unable to meet their co-investment contribution or face a sudden industry downturn that affects the demand for their product or service. These factors may lead to an organisation withdrawing from or not accepting an offer of grant funding.

While it is disappointing when projects are not able to proceed as planned, I respect that commercial decisions need to be made. Any funding that has been offered to a withdrawn project is reinvested in the Regional Development Fund, and I reinforce that the payments are made at the milestones being achieved.

Mr VAN HOLST PELLEKAAN: I understand those principles. Are there any projects or any grants that you fear will not be fulfilled and that money might be returned for any number of reasons?

The Hon. G.G. BROCK: Not to my knowledge, at this stage.

Mr VAN HOLST PELLEKAAN: With regard to the $7 million from the Regional Development Fund that was transferred to the Whyalla interest-free loan scheme, how much of that money has been actually loaned out? Do you believe that the balance will be loaned out and, if you do not think that it is all necessary, what is your estimate of how much of the balance will be loaned out and when those loans will be repaid?

The Hon. G.G. BROCK: That money was transferred to the Treasurer, and those questions should be asked of the Treasurer or the Small Business Commissioner. They are facilitating that on behalf of the $7 million I took across.

Mr VAN HOLST PELLEKAAN: When will the RDF get the full $7 million repaid from the Treasurer?

The Hon. G.G. BROCK: When Arrium went into administration, there was a lot of uncertainty in Whyalla, and small businesses there had an issue, having cash flow problems, going forward. We were able to facilitate that quickly by transferring money from the Regional Development Fund across into Treasury and allowing those small businesses to take an interest-free loan to be able to keep the cash flow going on there. By doing that, we secured those small businesses to be able to continue trading with Arrium under administration. By working this way, we also saved the potential loss of hundreds of jobs in the Whyalla region.

Mr VAN HOLST PELLEKAAN: I am happy to be on record to say that I support the government running that program. What my question is about, though, is that $7 million of money, which was going to be granted to appropriate regional development programs, has been transferred to the Treasury so that the Treasury could then lend that money to businesses in Whyalla for very good reasons.

Essentially, money that was going to be given to regional South Australia is now being lent to South Australia. I have no concerns with that as long as that money comes back from the Treasury and back into the Regional Development Fund. I understand that you do not administer that money, that you have handed it over to the Treasurer. When will you get it back from the Treasurer so that it can be used for its original purpose?

The Hon. G.G. BROCK: I would hope that the member is not implying that, by allocating this money across to Whyalla, it is not part of the regional locations in South Australia. The inference I took from that was that Whyalla may have transferred this money over to protect those jobs and those small businesses to allow them to continue. Your question to me was about getting that money back for regional opportunities. I believe that we have done that. Those jobs could have gone, I understand that. By doing that, we have secured and saved hundreds of jobs in Whyalla and, irrespective, it comes from the RDF. It has been utilised for job opportunities and retaining jobs.

Mr VAN HOLST PELLEKAAN: As I said before, I fully support that. What I want to know is: when does the money come back from Treasury into the Regional Development Fund? Is the agreement that you have with the Treasurer, 'Yes, here's the money from the regional development bucket into the Treasury. Transfer it back in one year, transfer it back in two years, potentially transfer it back when the money is repaid by the businesses.'?

I do not question that it was used for a good purpose, but what I want to know is: when is it going to go back to the original purpose—after the money is repaid by the recipients of the loans from the Treasury? What agreement did you enter into with the Treasurer to make sure that the regional development money came back to you so that it could be used for the interest-free loans but that, when those loans were repaid, it would come back for the original purpose? That is what I want to know.

The Hon. G.G. BROCK: I reinforce what I said a minute ago: irrespective of where the money comes from, it is money that has gone across for opportunities in regional South Australia into Whyalla to assist those businesses—no matter where it comes from. The issue was that we put that money across there and, if I go a bit further, I asked the commonwealth to match my money and they did not do that. However, no matter which bucket it comes out of, it is saving those hundreds of jobs in Whyalla and the surrounding regions and keeping up the prosperity of those Whyalla businesses, making certain they have health and wellbeing.

Mr VAN HOLST PELLEKAAN: Certainly, I support that, minister—for the third time, I support that. Let's just say you transferred $7 million from RDF into Treasury, Treasury lent $7 million to the businesses of Whyalla for all those really good reasons and then those businesses paid it all back to the Treasurer. Do you get your $7 million back so that the money can be used twice? That is what I am getting at. I am not questioning the interest-free loans—those are fantastic.

If those people pay it all back to the Treasurer and you do not get it back into the Regional Development Fund, then the regions have missed out on an opportunity to use the money twice: once to lend it and have it paid back, and then once for it to go back where it came from and be used for grants. Is there any agreement like that at all between you and the Treasurer to make sure that you get the money back?

The Hon. G.G. BROCK: I think I have answered the question. If you remember back in round 2, I got another six point something million dollars from the Treasurer to fulfil some of round 2. I think I have answered the question.

Mr GRIFFITHS: We will stop here. I think there is a bit of a difference on the emphasis of the question, so we will swap over to local government questions, minister. It is very frustrating to me to look through the Auditor-General's Report to try to find references to local government in the papers. I refer to Volume 3, page 553. Under DPTI, and Activity 4, Office of Local Government, the report states: 'The Office of Local Government provides policy and other advice to the Minister for Local Government.'

That is all I can find about the Office of Local Government in the Auditor-General's papers. As the Office of Local Government—and my long-term understanding of this was to provide support and advice for councils—I would have thought there would have been a reference to interaction with local government individually, regionally, via collections of councils and the Local Government Association. Why is it that this only talks about the office providing advice to the minister?

The Hon. G.G. BROCK: As the minister, I am responsible for the system of local government, as you are aware. The Office of Local Government (OLG) provides advice on the operation of the system to me as minister and, in doing so, the OLG can talk to individual councils.

Mr GRIFFITHS: Having been at regional meetings, I am aware of your staff's attendance at some of them. It is not that I think that they never get out of the city—I understand that occurs—but I was hoping for a more fulsome explanation of the relationship that exists between the Office of Local Government and local government and the minister, as part of those papers. You referred to the traineeship positions that were announced in October and the $2 million that was allocated to that. My recollection is that you said 47 were to be created. Can you confirm that number?

The Hon. G.G. BROCK: From memory, for regional councils—and this is only for regional councils—the number of traineeships is 57, but I stand to be corrected.

Mr GRIFFITHS: We both have the number seven in it, so hopefully we will get the right answer. I support the effort that is being made and commend you for the second round for this to occur. In considering the contribution towards that—and I believe that $2 million was put into that—in your previous response to a question from the member for Stuart, you referred to dollar commitments and therefore the total spend for private investors also coming in and jobs created as part of that.

As part of the consideration of the effectiveness of this commitment of $2 million over two years, can I get the best bang for my buck by investing in this way? I like the idea that it has been put there. I think it is good to invest in the involvement of future generations of local government people. I am not going to argue with that, but was consideration given to another opportunity within local government to invest and get a good return also for the community at large?

The Hon. G.G. BROCK: To be quite frank, this is a regional development question, but I am happy to answer it; it is administered through the Local Government Association. The 57 positions have been created by councils taking that on board. Every time I have been out there to see these young people, I see the joy on their faces because they have a full-time job in their own area. To answer your question, I believe that this is the best bang for those dollars for this particular project, bearing in mind that I am still to decide how I will allocate the rest of the Regional Development Fund.

Mr GRIFFITHS: I appreciate the minister answering questions that are slightly out of his portfolio area, but I just wanted to get that on the record. Part of the ministerial responsibility that rests with you as the Minister for Local Government relates to the Local Government Research and Development Scheme. My understanding is that the legislation controlling that requires that you, as the minister, are advised of recommendations on the expenditure within that program. I would like to confirm that that actually occurs.

The Hon. G.G. BROCK: I am advised that the Local Government R&D Scheme comes under the Local Government Finance Authority Act, which is administered by the Minister for Finance.

Mr GRIFFITHS: I am looking at the Local Government Finance Authority Act 1983, section 31A—Tax equivalents, subsection (4) where it provides:

Amounts held under subsection (2), together with interest accrued under subsection (3), will be applied for local government development purposes recommended by the LGA and agreed to by the Minister in accordance with principles agreed between the Minister and the LGA.

You are talking about the Minister for Finance, are you?

The Hon. G.G. BROCK: Yes, that is correct.

Mr GRIFFITHS: Can I clarify then about the staff member who represents the minister on that? Is that a staff member of the Minister for Finance or a staff member of the Minister for Local Government?

The Hon. G.G. BROCK: I am advised that the Department of Treasury and Finance, through the Minister for Finance, is very at ease with the Office of Local Government being able to give advice and work through the process. Certainly, it comes under the Minister for Finance.

Mr GRIFFITHS: To clarify, I recognise that Ms Hart is an ex-officio member and is defined as being Manager, Office of Local Government; therefore, I presume that Ms Hart reports back to the Minister for Finance but does Ms Hart also report or provide a CC to you some of the relationships and decision-making of the Local Government R&D Scheme?

The Hon. G.G. BROCK: The Minister for Finance is responsible for these questions. I recommend that the member direct those questions to the Minister for Finance.

The CHAIR: The time having expired for the examination of this portion of the Auditor-General's Report, we thank the minister and his advisers for making themselves available. We thank the members for Goyder and Stuart for their questions.

Progress reported; committee to sit again.

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