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Legislative Council - Fifty-Fifth Parliament, First Session (55-1)
2022-11-15 Daily Xml
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Auditor-General's Report

Auditor-General's Report

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (15:39): I move:

That standing orders be so far suspended as to enable the Report of the Auditor-General 2021-22 to be referred to a Committee of the Whole and for ministers to be examined on matters contained in the report for a period of one hour's duration.

Motion carried.

In committee.

The CHAIR: I note the absolute majority.

The Hon. J.M.A. LENSINK: My references will be all from report 8, Part C: Agency Audit Reports, which is the one that is 450-odd pages, or whatever it is. I refer to page 17 of that report, the big thick one, which I am assuming most people will be referring to. In relation to purchase recommendations for procurements not signed by all participants and some conflict of interest forms not completed, there is quite a bit of commentary on page 19. Can the minister advise how many conflict of interest forms remain unsigned, whether there has subsequently been found to have been a conflict, the procurement value of the forms that they relate to, and whether the minister has raised concern over this with the department and relevant individuals?

The Hon. K.J. MAHER: I thank the honourable member for her question. I can provide some general information in relation to conflict of interest forms not completed, and then take on notice the remainder of the specifics about numbers and, if it can be ascertained, values. Under the Attorney-General's Department procurement framework, all participants in an evaluation process must complete a conflict of interest declaration and confidentiality agreement prior to receiving responses and commencing the evaluation. On audits sampled, I am advised that, with a procurement that identified that conflict of interest forms had not been completed by participants in that evaluation, audit recommended that conflict of interest forms be completed for all procurements prior to the evaluation of offers.

I am advised that the Attorney-General's Department Procurement Services adviser would remind agency staff of their obligations to ensure conflict of interest forms are completed by all evaluation team members prior to reviewing responses, and that this action would be undertaken by 31 October 2022. I further advise that the Attorney-General's Department Procurement Services emailed the agency in September 2022, seeking confirmation on what processes they would implement to ensure the issue does not occur again. The agency replied, stating that this was an oversight and that they would ensure all the evaluation team members would sign these forms for future procurement.

I am further informed that, under the second audit finding under the Attorney-General's Department procurement framework, all evaluation team members must sign-off on the purchase recommendations. In two of the procurements sampled, the purchase recommendation was not signed by all members of the evaluation committee. The signing shows that all members of the evaluation committee are aware of the purchase recommendations and the information within the document.

The audit recommended that the purchase recommendation procurement templates be updated to have an area for all members of the evaluation team to sign-off and to ensure that all members of the team do in fact sign-off on the purchase recommendations before implementation of the recommendations. I am advised that the Attorney-General's Department Procurement Services has updated its simple purchase recommendation template to include a section for the evaluation team members to sign.

In relation to the detailed questions about numbers and value, I will see if I can get that information and bring back a reply for the honourable member.

The Hon. J.M.A. LENSINK: I thank the Attorney for that response. I have a follow-up question that is on the same matter. On page 19, it states that the department has responded that it will update its simple purchase recommendation template to require all members of the evaluation team to sign-off before the implementation of the recommendation. Can the minister advise what procurement value of the forms was referenced there, whether standard practice has required two signatures in the past and whether the minister has raised this concern with his department and relevant individuals?

The Hon. K.J. MAHER: I thank the honourable member for her question. As I outlined, the department is aware of it and is taking action to remedy the situation. In relation to the value of the particular procurement form that was the subject of the audit comments, I am happy to take that on notice and see if I can bring back a reply.

The Hon. J.M.A. LENSINK: Moving right along to page 21, 'Highlights of the financial report—controlled items'. Under Expenses it states that employee benefits expenses have gone up from $152 million in 2021 to $158 million in 2022. Can the minister advise what the additional $6 million in employee benefits expenses was spent on?

The Hon. K.J. MAHER: I thank the honourable member for her question. I am advised that there are a number of factors that will contribute to that increase. A part of it, I am advised, is likely to be accounted for in the full-year effects of the machinery of government changes that happen after a new government is elected—different parts of departments that come in and go out.

I am also advised that the increase in costs and indexations, of an indexation of costs as well as wage increases, will contribute to that as well. Things like salaries and wages, employment on-costs of superannuation, annual leave, employment on-costs of payroll tax, long service leave, board fees, TVSP, skills and experienced retention leave, workers' compensation, other employee retained expenses, as these increase with indexation and wage increases they will also go up.

The Hon. J.M.A. LENSINK: Can the minister advise what termination payments were included in the $1.1 million spent on the SA Public Sector Workforce Rejuvenation Scheme payments? I appreciate that you might need to take some of these on notice.

The Hon. K.J. MAHER: Which page is that?

The Hon. J.M.A. LENSINK: This one is on page 22.

The Hon. K.J. MAHER: I thank the honourable member for her question. I am advised that this was the name for one of the previous government's targeted voluntary separation schemes. I am advised that included 25 employees who accepted an offer under that scheme to the value of $1.1 million.

The Hon. J.M.A. LENSINK: Can the minister advise, in a similar section here, whether the increased salaries were a standard rate across the department because of EB negotiations, or did it vary from employee to employee?

The Hon. K.J. MAHER: A general increase in salaries across the department?

The Hon. J.M.A. LENSINK: Yes.

The Hon. K.J. MAHER: I thank the honourable member for her question. My advice is it is not a uniform increase. There are a number of industrial instruments that govern the different members of the Attorney-General's Department. There are the ASO levels of standard public sector industrial agreements, and there are executive agreements that govern other ones. I am informed there are a number of different industrial agreements and mechanisms, so it will not be a uniform increase in wages right across AGD.

The Hon. T.A. FRANKS: Chair, I seek your guidance. I have a public sector payroll software, Frontier, question. Is it appropriate at this point?

The Hon. K.J. MAHER: I can put it to the Treasurer.

The Hon. T.A. FRANKS: I assumed it was the public sector portfolio.

The Hon. K.J. MAHER: Maybe for some guidance, my advice is that the issues concerning the Frontier software security fall under the purview of the Treasurer. I think that is probably why the Hon. Rob Lucas was the one who spoke about this in the former government. If there is a question about this, I am more than happy to pass it on to the Treasurer.

The Hon. T.A. FRANKS: On page 7 of Part A, the Auditor-General's Report found with regard to the public servant payroll software provider that:

…over an extended time dating as far back as 2015, a significant number of data files were compromised. More than 90,000 current and former SA Government employees were affected.

Following, also on page 7, the Auditor-General found that Frontier breached their contractual obligations by 'routinely taking data from the separate environment and storing it on its corporate network'. It was from this corporate network that the public servants' data was stolen. On page 19 of Part B, it was found that:

There was no contract management activity or risk assessment to conclude on, or test, Frontier's compliance with the data security and storage requirements included in the contract.

My questions are: what steps have been taken to prevent further breaches and theft of government employee data, to ensure that contract management procedures are now in place to enforce contractual obligations that were not met and to put a system in place to ensure that external service providers are meeting their contractual obligations on an ongoing basis?

The Hon. K.J. MAHER: I thank the honourable member for her question. I will refer it to the Treasurer, but I am pretty sure the issue of cybersecurity falls within the Department of the Premier and Cabinet. It might be that I refer her questions to both of those and see who gets the best answers for her.

The Hon. J.M.A. LENSINK: I refer again to page 21 of the report in relation to expenses. Supplies and services have gone up from $139 million in 2021 to $169 million in 2022. Can the minister elaborate on the $30 million on supplies and services? We might get to page 23 in a minute. This is page 21 we are on.

The Hon. K.J. MAHER: I thank the honourable member for her question. My advice is overwhelming: the vast majority, almost all of that amount, is to do with machinery of government changes, particularly contract payments for land administration services, which previously came under the Attorney-General's Department in the planning area but now fall under Minister Champion's area. The overwhelming majority of the changes in that supply and services is in relation to the contract payments for land administration services.

The Hon. J.M.A. LENSINK: On page 23 there is a reference to accommodation charges of $22.1 million. Can the Attorney please provide a breakdown of what those are? I appreciate that he might need to take that one on notice.

The Hon. K.J. MAHER: I thank the honourable member for her question. As she has rightly suspected, I will take that on notice and bring back a reply. Even after some of our advisers have been sitting next to ministers for some 20 years, I do not have that information with me, so I am happy to take it on notice.

The Hon. J.M.A. LENSINK: I refer to page 30 of the report, which refers to the Public Trustee. Has there been any deferral of the integration of the Public Trustee ICT services within the Attorney-General's Department? If so, can the Attorney provide an update, please?

The Hon. K.J. MAHER: I thank the honourable member for her question. There has been some deferral of the integration of the Public Trustee's ICT services with the Attorney-General's Department. As the third dot point under 'Significant events and transactions' on page 30 states, there has been some deferral. I do not have information as to what aspects and the time frame of deferral, but once again I am happy to take that on notice and find an answer for the honourable member.

The Hon. J.M.A. LENSINK: I go back to page 20. It might have moved under machinery of government changes, but does the bonds management system still sit within AGD?

The Hon. K.J. MAHER: I thank the honourable member for her question. The Bonds Management System does not sit under myself as minister. Minister Andrea Michaels has responsibility for that area of government now.

The Hon. J.M.A. LENSINK: There have been some issues that were identified on page 20. Perhaps the government could provide some responses to those issues. Still on page 20, in regard to the South Australian Computer Aided Dispatch system, what work has been done to ensure optimal system function as well as protection of data?

The Hon. K.J. MAHER: I thank the honourable member for her question. I will just confirm that, in relation to the previous question on the bonds management system, I am happy to refer those issues that are raised on page 20 to Minister Michaels. I am going to have to do the same for the South Australian Computer Aided Dispatch system, which sits under Minister Szakacs. I will be more than happy to refer those and bring back a reply for the honourable member.

The Hon. J.M.A. LENSINK: I refer to page 27. This in relation to the Victims of Crime Fund. Where an offence has not been established, the Attorney-General has discretion to make an ex gratia payment to the claimant. Can the Attorney provide some details about how many ex gratia payments he has made since he commenced his role and give a breakdown of those, including the value of each?

The Hon. K.J. MAHER: I thank the honourable member for her question. I do not have a breakdown of the value or volume since I became minister, but we will see if we can find that for the honourable member. I can let the honourable member know that in the fiscal year 2021-22—which includes part of when I have been minister but also a large part, I think, of when the member for Heysen was performing the functions of the Attorney-General and before that the member for Bragg was Attorney-General—I am advised the value of ex gratia payments was $881,000.

I will see if it can be broken down into a time frame. I am not certain that we will readily be able to do that, but I can inform the honourable member that I certainly have made a number of ex gratia payments under the Victims of Crime Fund. Many of those concern people who have been the victims of childhood sexual abuse where there has not been a conviction recorded for a whole lot of reasons, a lot of them being the difficulty in recording convictions where the victim is a young child and the passage of time has diluted the evidence. I know that attorneys-general of both stripes have in the past awarded ex gratia payments in particularly that area, but I will see if a breakdown can be found.

The Hon. J.M.A. LENSINK: My last question is on the sentences at the bottom of page 27 and the top of page 28 in relation again to the Victims of Crime Fund. The amount that is subject to being actively managed has increased quite significantly from $1 million to $11.1 million. Can the minister provide some details about why that is the case?

The Hon. K.J. MAHER: I thank the honourable member for her question. It is a very good question. That is a just over eleven-fold increase. I do not have information or advice as to the reasons behind that, but again I am happy to take that on notice and provide a response for the honourable member.

I think I mentioned in response to the honourable member's last question an increase from $1 million to $11.1 million. What the amount is has increased by $1 million to $11.1 million. So it is not an eleven-fold increase, it is an increase from about $10 million to $11 million, but I will still find an answer as to why that is the case.

The ACTING CHAIR (Hon T.T. Ngo): Any further questions?

The Hon. J.M.A. LENSINK: I have other questions I can ask about the Public Trustee. I do not want to let you off that easily. So page 36, Public Trustee, the underlying investment strategy and Public Trustee client funds. Very poor returns. How does that impact upon the clients themselves, because this is money that is placed in trust for them which I assume they try to derive some sort of income from? Can the Attorney provide some more information about that?

The Hon. K.J. MAHER: I thank the honourable member for her questions. As funds held and invested by Public Trustee decrease in your adverse investment environments, that is reflected in the funds they hold in trust for people, but in years when the investment environment is more favourable and those investments go up there is the relative increase for funds held in trust for their clients. In a number of recent years where the investment environment has been very challenging those funds will go down, but the investment funds follow the market and, as a general proposition, as the market increases over time—as with nearly all investment funds—clients' investments increase over time.

The ACTING CHAIR (Hon. T.T. Ngo): Any other questions? If there are no more questions, I call on the Minister for Primary Industries and Regional Development and Minister for Forest Industries.

The Hon. N.J. CENTOFANTI: My questions relate to Auditor-General's Report 8 of 2022, Part C, page 343. Pastoral land held by the Minister for Primary Industries and Regional Development was revalued upwards by $15.1 million to $69.2 million. Can the minister inform the chamber as to whether an increase of $15.1 million in valuation of pastoral land is consistent with previous valuations?

The Hon. C.M. SCRIVEN: We do not have information about previous valuations. We are happy to take that on notice.

The Hon. N.J. CENTOFANTI: I refer to Auditor-General's Report 8 of 2022, Part C, page 349, risk management procedures. Can the minister please explain why PIRSA did not proceed with its new enterprise risk management framework in 2021 and instead revert to its former policy and procedure reviewing, to reflect current practices?

The Hon. C.M. SCRIVEN: I am advised that the PIRSA risk management framework was reviewed and endorsed by the risk and performance committee prior to being approved by PIRSA executive on 17 June this year. The PIRSA risk management framework includes the risk management policy and procedure assessment guide and templates and is published on the PIRSA intranet.

Changes to the risk management framework included alignment to the South Australian government's risk management guide in Treasurer's Instruction No. 2. Strategic risk themes aligned to the departmental priorities and the corporate plan have been agreed by PIRSA executive as the first step to finalising the strategic risk register, and this process also includes the review of PIRSA's risk appetite.

The Hon. N.J. CENTOFANTI: Thank you for that information. You might not have this information to hand, but I am wondering why PIRSA did not proceed with that new enterprise risk management framework in 2021.

The Hon. C.M. SCRIVEN: I am advised that that decision was taken under the previous chief executive. Of course, it was also under the previous government. I do not have any additional information at this stage, but I am advised that it was then adopted in June of this year.

The Hon. N.J. CENTOFANTI: I refer to Auditor-General's Report 8 of 2022, Part C, page 350, legislative compliance register. Can the minister inform the chamber as to when PIRSA commenced quarterly reviews of its legislative compliance register?

The Hon. C.M. SCRIVEN: I am advised that that quarterly review commenced in September 2021 and that prior to that they were annual.

The Hon. N.J. CENTOFANTI: Auditor-General's Report 8 of 2022, Part C, page 351: can the minister please confirm whether it was only six positions of the 23 employees who separated under the South Australian Public Sector Workforce Rejuvenation Scheme within PIRSA that were listed as filled?

The Hon. C.M. SCRIVEN: I am advised the answer is yes.

The Hon. N.J. CENTOFANTI: Can the minister explain to the chamber what was the department's reasoning for not refilling these positions to rejuvenate the workforce, as was the intent of the scheme?

The Hon. C.M. SCRIVEN: I am advised that it should be emphasised that that question relates to a particular point in time. At that point in time, it was six positions that had been filled. I am advised that the rejuvenation scheme was announced as part of the 2021-22 state budget, which of course was under the previous government, and it aimed to rejuvenate the South Australian public sector workforce by giving ongoing employees access to a financial incentive should they wish to separate from the South Australian public sector employment.

The scheme apparently was not a savings measure, because the department was able to retain those positions for new recruitments. The scheme was available until 31 December 2021. At the time of the scheme, PIRSA was also undergoing an organisational restructure. I am advised that those circumstances, combined, were the reason.

The Hon. N.J. CENTOFANTI: Auditor-General's Report 8 of 2022, Part C, page 351, leave return reports: has the direction to restructure PIRSA directly resulted in delays of reviewing leave return reports, and does this risk employees being able to access leave they are not entitled to, potential salary overpayments and misstated employee benefit liabilities?

The Hon. C.M. SCRIVEN: I am advised that it has no relationship whatsoever to the restructure. It is an ongoing challenge not only for PIRSA but also, we understand, for other government departments. In response to the Auditor-General's findings that leave return reports were not reviewed promptly, PIRSA has implemented regular monthly compliance reporting across divisions.

A reminder to relevant PIRSA officers on the importance of timely review of all leave return reports has also been implemented. Departmental quarterly reporting to the senior executive will be implemented during 2022-23. I am also advised that the procedure is currently under review and, once finalised, will be communicated to all responsible managers to enhance compliance.

The Hon. N.J. CENTOFANTI: Auditor-General's Report 8 of 2022, Part C, page 352, contract complexity assessment: can the minister please inform the chamber how is PIRSA ensuring its contract assessment aligns with the complexity scale factors in the Procurement Services SA guidelines?

The Hon. C.M. SCRIVEN: I am advised that, in response to the Auditor-General's finding that the contract complexity assessment rationale was not documented, PIRSA confirmed that that was an isolated incident resulting from the transition period between a change in the assessment frameworks used by SA government from the former state procurement board and the newly formed Procurement Services SA (PSSA) in 2021-22.

A PIRSA complexity and risk assessment tool has since been developed in line with the PSSA framework for both procurement and contract management, to allow for a consistent and streamlined determination of complexity and risk.

The Hon. N.J. CENTOFANTI: I refer to the Auditor-General's Report 8 of 2022, Part C, page 353, financial report highlights. The expenses regarding employee benefits increased from $87 million in 2021 to $95 million in 2022. Part of these expenses were due to an increase in targeted voluntary separation packages to the tune of $3 million. Can the minister please confirm this $3 million included payments under the SA Public Sector Workforce Rejuvenation Scheme of $1 million?

The Hon. C.M. SCRIVEN: I am advised that the $1 million is part of the $3 million total referred to in the report.

The Hon. N.J. CENTOFANTI: Therefore, if the breakdown of employee benefit expenses increased by $7.6 million, and that included $3 million for the targeted voluntary separation packages, $1.7 million due to re-evaluation of workers compensation liability, and increased salary and wages of $951,000, this totals $5.65 million. Can the minister inform the chamber what employee benefit expenses made up the remaining increase of approximately $2 million?

The Hon. C.M. SCRIVEN: I am advised that the reconciliation is not with us here at present, and that question can be taken on notice.

The Hon. N.J. CENTOFANTI: I refer to the Auditor-General's Report 8 of 2022, Part C, page 356, 'Statewide storm recovery grants'. My question to the minister is: have PIRSA undertaken an evaluation of the storm recovery grants program to determine its success or otherwise?

The Hon. C.M. SCRIVEN: My advice is that that was not done during the period that this report relates to.

The Hon. N.J. CENTOFANTI: Sorry?

The Hon. C.M. SCRIVEN: My advice is there has been no evaluation done during the period that this report relates to.

The Hon. N.J. CENTOFANTI: In the Auditor-General's Report 8 of 2022, Part C, page 357, 'Drought support package and On-farm Emergency Water Infrastructure Rebate Scheme', can the minister please inform the chamber whether there have been any applications for the On-farm Emergency Water Infrastructure Rebate Scheme approved since the state election? If not, can she give an indication of when they will be approved and announced?

The Hon. C.M. SCRIVEN: I can take that question on notice.

The Hon. N.J. CENTOFANTI: Auditor-General's Report 8 of 2022, Part C, page 357, 'Supplies and services': can the minister please inform the chamber what the $2.3 million decrease in contractors and temporary staff to help with the management of fruit fly was? I assume this was associated with the success of eradicating the metropolitan outbreaks.

The Hon. C.M. SCRIVEN: I am advised that the reduction was due to the reduction in the number of contractors. The member would be aware that there were metropolitan fruit fly outbreaks that required a large number of contractors. Once that was resolved, the contractors were no longer required.

The Hon. N.J. CENTOFANTI: I refer to Auditor-General's Report 8 of 2022, Part C, pages 343 and 357. On page 343 the report notes that:

Supplies and services expenditure of $89.2 million was $25.5 million higher than originally budgeted, largely due to the continued use of temporary staff for fruit fly biosecurity response activities.

On page 357 of the report, under 'Supplies and services', it states that:

Supplies and services expenses decreased slightly by $381,000 to $89.2 million in 2021-22, largely due to a $2.3 million decrease in contractors and temporary staff, as fewer temporary staff were engaged to help with the biosecurity response to manage fruit fly outbreaks of South Australia…

To me, those two statements appear contradictory. Can the minister please explain if those two statements are contradictory and, if not, why not?

The Hon. C.M. SCRIVEN: I am advised that the reference on page 343 is comparing the budget to actuals, whereas the reference on page 357 is comparing the actuals over two years.

The Hon. N.J. CENTOFANTI: Auditor-General's Report 8 of 2022, Part C, page 359, Liabilities: can the minister please explain the $4.8 million increase in contract liabilities for which PIRSA has outstanding performance obligations to fulfil?

The Hon. C.M. SCRIVEN: I am advised that that would predominantly be in relation to the Regional Growth Fund, where those liabilities have not been paid by 30 June. I am also more than happy to receive questions from the opposition about the Regional Growth Fund and other comments in the Auditor-General's Report.

The Hon. N.J. CENTOFANTI: I thank the minister for her commentary. I refer to Auditor-General's Report 8 of 2022, Part C, page 353, employee benefits expenses: the employee benefits expenses increased by $7.6 million in 2021-22, which included $1.7 million due to an increase in workers compensation liability because of the number of open seriously injured workers cases. My question to the minister is: what is the department doing to reduce the risk of injury to its employees?

The Hon. C.M. SCRIVEN: I am advised that what the honourable member is referring to is the actuarial assessment. Of course, there are a number of steps that are gone through when someone has a workers compensation claim. Where appropriate, that can result in a review of the processes within a workplace, but the department takes the safety of its employees very seriously and is constantly striving to improve workplace health and safety.

However, that statement does not imply that workers compensation claims are necessarily directly related to any kind of deficiency in the department. Each case would be looked at individually, and ongoing work for improving the health, safety and wellbeing of employees is of paramount importance to the department.

The Hon. N.J. CENTOFANTI: Auditor-General's Report 8 of 2022, Part C, page 344, significant events and transactions. Can the minister please inform the chamber how many FTEs received targeted voluntary separation packages and what the levels and titles of these FTEs were?

The Hon. C.M. SCRIVEN: What page was the honourable member referring to?

The Hon. N.J. CENTOFANTI: Page 344, significant events and transactions.

The Hon. C.M. SCRIVEN: I am advised that in 2021-22, there were a total of 60 non-executive separation packages accepted within PIRSA for a total cost of $4.527 million, and 37 targeted voluntary separation packages (TVSPs) were accepted at a cost of $3.482 million in the 2021-22 financial year. During 2021-22, following the development of the new strategic priorities for PIRSA, a review of the structure and functions of the department was undertaken to ensure that priorities could be achieved within allocated budgets. This resulted in the offer and acceptance of an initial 19 TVSPS. To further assist with ensuring PIRSA could meet its allocated budget, a subsequent expression of interest for TVSPs was issued.

The Hon. N.J. CENTOFANTI: I think this will be my final question. Back to page 251 and the vacancies resulting from the Public Sector Workforce Rejuvenation Scheme, can the minister inform the chamber, of the 23 employees who separated under the workforce rejuvenation scheme, what was the total FTE level and title of those 23? What was the FTE level and title of the six positions listed as filled at that point in time?

The Hon. C.M. SCRIVEN: I can advise the chamber that, unfortunately under the previous government, there were five roles in Biosecurity SA which ceased and eight from SARDI which ceased. I am pleased to say that under the current government those roles are being filled. I think that is incredibly important because biosecurity is a very high priority and research is so important. I am very pleased that under the current government those roles will be filled.

The Hon. N.J. CENTOFANTI: I would just ask for the total FTE level and title of those 23 employees.

The Hon. C.M. SCRIVEN: We do not have that level of detail to hand.

The Hon. N.J. CENTOFANTI: Will the minister please take that on notice?

The Hon. C.M. SCRIVEN: Certainly; if that information is available, I will provide it back to the chamber.

The CHAIR: There being no further questions, that concludes the examination of the Auditor-General's Report.

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (16:37): I move:

That the report be adopted.

Motion carried.

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