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Legislative Council - Fifty-Fifth Parliament, First Session (55-1)
2025-11-11 Daily Xml
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Auditor-General's Report

Auditor-General's Report

Debate resumed.

The Hon. K.J. MAHER: I thank the honourable member for his question. My advice is that the payroll external provider is Frontier. I am further advised that Frontier are used across government by Shared Services SA. I am advised the Courts Administration Authority have a direct contract with Frontier through a historical arrangement. My advice is the audit finding primarily relates to assurances we need from Frontier; for example, for disaster recovery, backups and user access reviews. I am advised that the Courts Administration Authority have now sought those assurances.

The Hon. B.R. HOOD: I just note in the response there from the Attorney-General: am I right to say that Frontier was managing many services across government in terms of payroll?

The Hon. K.J. MAHER: My advice is that Frontier are used across government by Shared Services SA.

The Hon. B.R. HOOD: So it would be right to assume, then, that there are issues with regard to access, with regard to payroll databases and operating systems across government?

The Hon. K.J. MAHER: That is not something I could speak to at all. As I have said, for historic reasons there is a direct contract that the Courts Administration Authority has with Frontier. I do not think it would be fair to draw a conclusion that anything that is similarly needed for assurances are right across government.

The Hon. B.R. HOOD: I appreciate that, Attorney-General. I was probably casting the net a little bit too wide.

The Hon. K.J. MAHER: Even from opposition.

The Hon. B.R. HOOD: The Auditor-General's Report references that a review and updates to its procedural documents will tidy up this access and payroll database issue. What will that ultimately look like? Is that something that Frontier will do for the CAA?

The Hon. K.J. MAHER: My advice is that that is essentially the Courts Administration Authority seeking those assurances. They have done that, I am advised. That has been sought by letter, so that will be needed for Frontier to provide such assurances.

The Hon. B.R. HOOD: I am going to attempt one more wide casting of the net. We see these issues with regard to the CAA payroll and, as we have learned, Frontier is covering across different agencies. Why is the government then persisting in using this provider if there are issues?

The Hon. K.J. MAHER: As I have said, my advice is that this is a specific issue that has been raised by the audit in relation to the Courts Administration Authority's direct contract with Frontier, as separate and standalone from Frontier's agreement arrangements or contract across government with Shared Services.

The Hon. B.R. HOOD: That is it for Courts Administration Authority. I direct the Attorney's attention to the SA Forensic Centre, if you need to make a change. I go to page 112 of Part C, Agency audits, increase in appropriations for the SA Forensic Centre. Appropriations increased by $45 million in 2024-25, including $19.2 million for the new SA Forensic Centre, contributing to a net result of $33 million. The questions to the Attorney are: how does this funding align with the long-term departmental priorities, and what oversight mechanisms are in place to ensure that the project costs remain within budget amid the land purchase in June 2025?

The Hon. K.J. MAHER: The new Forensic Centre remains a priority for the government. We have talked about it a number of times in this chamber before, particularly during question time and some of the deficiencies we are seeing with the Divett Place facility.

In terms of oversight and management of the project, I am informed that there is significant work that is done between SAPOL—which will be a co-user of the facility for their forensic needs—Treasury and also the Department for Infrastructure and Transport. The design process is currently being worked through.

The Hon. B.R. HOOD: When can we expect that design to be finalised?

The Hon. K.J. MAHER: I am happy to take it on notice. I do not have a date here. I am not sure that there will be an absolute firm drop-dead date. Obviously a forensic centre is a bespoke sort of project and a bespoke sort of development that you do not do every day in every state. It is being worked through. If there is a drop-dead date, which I suspect there is not, I am happy to make inquiries about it.

The Hon. B.R. HOOD: I thank the Attorney-General for his answers. While I am on my feet, I will move on to the Minister for Infrastructure and Transport. I am looking at Part C: Agency audits, page 234, under the heading 'AGFMA current status', about the standstill agreement between DIT and the AGFMA, the failed commercial review and the commercial approach proposed in May 2025. My question to the minister is: given that we are now four years into a $2.4 billion contract, why is the AGFMA still 'not operating as intended', to quote the Auditor-General?

The Hon. E.S. BOURKE: I thank the honourable member for his question. As highlighted, this was a contract signed off under the previous government, one that has left us, I guess, in a situation where it is difficult to dig up. This is a contract we have inherited that is not fit for purpose. Needless to say, we do continue to work with Ventia to ensure that we can have better outcomes.

Just to highlight some of the things that are highlighted in the Auditor-General's Report, I think on the same page—page 234 from memory, or maybe further—are the things that the contractor is seen as not achieving. Subcontractors are engaged who charge above the maximum trade ceiling rates established under the contract, with agencies charged at rates higher than those allowed for some work; failure to meet KPI targets for response and restoration times for breakdown jobs; and maintenance work often not completed within the required timeframes.

I understand the department has been working with Ventia to work through this contract. Yes, there are improvements that can be done on both sides, and that is acknowledged. That is something that both the department and Ventia are working towards.

The Hon. B.R. HOOD: I thank the minister for her response. Still, I do want to go back to the language the Auditor-General uses, and I think he uses it intentionally, that this contract is 'not operating as intended'. There was obviously an intent to a contract that was signed, irrespective of who it was signed with. We are now at year 4, where we see multiple Auditor-General reports saying that it is not operating as intended. What does the minister take that to mean, and when will the minister's department begin to ensure that this contract is operating as intended? There are KPIs. If there are KPIs to be met within the contract, then it is up to the department to ensure that they are met.

The Hon. E.S. BOURKE: I thank the member for his question. As I am advised, the department restructured its AGFMA directorate, increasing FTEs to allow appropriate resourcing to manage the arrangements. A key area of commitment has enabled the AGFMA directorate to bolster audit and governance functions. These are steps that have been taken to try to address the issues that are being faced.

The department has followed and continues to implement several principles and approaches within the contract management plan to ensure that it provides AGFMA with the appropriate management and monitoring tools. I am further advised that the department has continued to apply extensive guidance and contract management advice, escalated to Ventia for all the raised findings. Additionally, the department has issued formal notifications to Ventia under the agreement, including contractual breach notices, in an attempt to remedy areas of persistent performances outside the agreed contract levels.

Internal and external assurances and audit activities of the systems, processes and work orders have been performed. These activities are being used to further update the information, the risk register and audit, and the insurance plans and contract management plans. Steps have continuously been put in place to make sure that Ventia can meet their contractual requirements here. The conversations do continue, and they have had to continue regularly to try to make sure we can have an outcome that we can all hope is a positive one, because at the end of the day it is our facilities in our communities that are missing out.

There are definitely steps being put in place—that is acknowledged I think also in the Auditor-General's Report of what actions they are taking. That is highlighted within the report and recorded in there as well.

The Hon. B.R. HOOD: I thank the minister for her response. Going to the substance of the original question, until we started talking about why it is not operating as intended, talking about the standstill agreement, which commenced with a commercial review process in May 2024 by the department, what specific outcomes did the standstill agreement aim to achieve and why did it ultimately fail?

The Hon. E.S. BOURKE: We were hoping to be able to have a contractual reset as a process was followed. It unfortunately did not have the desired outcome and now other steps have been taken. I believe that is also mentioned within the report's findings of those steps that were undertaken.

The Hon. B.R. HOOD: Can the minister advise whether there was any cost to taxpayers of the commercial review that failed to achieve any significant process in resolving identified issues, as quoting the Auditor-General?

The Hon. E.S. BOURKE: I do not have that information.

The Hon. B.R. HOOD: Can the minister take that on notice?

The Hon. E.S. BOURKE: I am happy to look into that further.

The Hon. B.R. HOOD: We are going to stay on the AGFMA audits, but move to page 235. This is regarding internal controls that need improving in other areas not operating in line with the contract. Given that many of the unresolved issues raised in the report are precisely the same unresolved issues that were raised in last year's Auditor-General's Report, why is it that they have not been addressed?

The Hon. E.S. BOURKE: I understand from the advice given that every effort is being made and we are now at the point of having to provide breach notices where that is required, but as highlighted before this is not a matter of set and forget. This is something where the department has regularly been in contact. They are trying to work through these matters. I think that is also highlighted in the Auditor-General's Report on page 234, the opening line acknowledging that DIT has been working continuously to improve Ventia's service delivery.

Yes, it is acknowledged that there is work that has been undertaken and it is acknowledged that work still needs to be undertaken. We appreciate that and it has been addressed within the report findings, but at the end of the day this is a contract that we inherited, it is not fit for purpose and we are now having to find ways to manage a contract that was not built to be able to support the services that are needed in South Australia.

The Hon. B.R. HOOD: I appreciate the minister's response. When the minister uses terms such as 'not fit for purpose' but the Auditor-General's language is 'not operating as intended', we can only assume that we have a contract which has an intent of correct operation, and that operation is not happening. In terms of the breaches that the minister spoke about and are now being issued, can the minister advise the chamber how many breaches have been issued? When was the first breach issued to Ventia? What constitutes a breach by Ventia?

The Hon. E.S. BOURKE: I am advised that a breach is a failing of the specific requirements under the original contract. Unfortunately, I do not have the numbers on me today regarding how many there are of those breaches. We know there are enough to be of concern, and that is why we have been able to say to Ventia that we will work through these. This is acknowledged again in the report. It is not a matter of not looking at the concerns: those concerns are being worked through. As I said earlier, where required, those breach notices are being applied, and those conversations continue with Ventia as well.

The Hon. B.R. HOOD: Just to the first parts of those last questions, can the minister advise the chamber—I am happy for her to take it on notice—on when the first breach orders were issued to Ventia and how many have been issued since?

The Hon. E.S. BOURKE: My advice is that it was in around 2021.

The Hon. B.R. HOOD: Can the minister advise how many breach orders have been issued to Ventia since 2021?

The Hon. E.S. BOURKE: As mentioned earlier, I do not have those numbers on me today.

The Hon. B.R. HOOD: Can the minister take that on notice?

The Hon. E.S. BOURKE: I am happy to take that on notice

The Hon. B.R. HOOD: Given that we see the contract with Ventia is going to end on 1 July 2027, is the government currently considering options regarding the extension of this contract and considering not exercising it with Ventia should they form government in the next term?

The Hon. E.S. BOURKE: We are always actively considering options.

The Hon. B.R. HOOD: That was a good response. Were there any attempts made by your department in 2024-25—notwithstanding that you were not the minister then—to insist on compliance by Ventia with the South Australian Cyber Security Framework, particularly given that last year's Auditor-General's Report stated that Ventia failed to provide evidence of compliance in 2023-24? If so, what was the nature of those requests? If attempts were not made, why not?

The Hon. E.S. BOURKE: My understanding is CyberCX have done an independent audit and are getting to a position where they are feeling comfortable that those requirements are being met. So there is work that is being undertaken, and we are progressing to a point where they are feeling more comfortable about that particular matter.

The Hon. B.R. HOOD: Who paid for that independent audit?

The Hon. E.S. BOURKE: I would have to look into that further. I am happy to take it on notice.

The Hon. B.R. HOOD: If the minister can take that on notice, that would be appreciated. Notwithstanding the long-held issues in terms of Ventia's performance, we do still see in the Auditor-General's Report that DIT is failing to obtain necessary evidence from Ventia's systems. That includes minimum asset data requirements, particularly given that last year's Auditor-General's Report stated that was something that the department was failing to do in 2023-24. What will the minister be doing to ensure the necessary evidence is obtained going forward from Ventia?

The Hon. E.S. BOURKE: I am advised that we are continuing to work with Ventia, other government agencies and internal requirements to improve the data quality, and this is something that we will be doing ongoing.

The Hon. B.R. HOOD: In the last remaining few minutes with the minister I would like to move to page 237, in regard to road maintenance contracts and performance management controls. Can the minister advise the chamber why this is now the third Auditor-General's Report in a row identifying failures within DIT's road maintenance contract management? Why are the issues continuing to persist and have not been resolved, and what measures is the minister implementing to ensure these resolved issues are properly addressed going forward?

The Hon. E.S. BOURKE: I know the honourable member was not here when this happened, but this is, I guess, another one of those matters we inherited from those opposite who have a vendetta against having things in public hands. The Department for Infrastructure and Transport manages 23,000 kilometres of roads, 742 bridges and more than 100,000 electrical assets across South Australia. This is an extensive network.

The Hon. B.R. Hood: I know the stats.

The Hon. E.S. BOURKE: Just in case you were not aware of the stats, I thought I would repeat them. I guess as a government what we have done is tried ways—and we did this in our budget process—of investing money to tackle a problem that we inherited. I understand that when we came into government the road maintenance was at a level down from where it should have been. I think they inherited at one level. I am just trying to find that data.

While we find that statistic in the last budget, our government's road maintenance is ongoing, and that is why we invested an additional $20 million over two years, commencing from 2027-28, to deliver additional road maintenance for regional and metropolitan roads, including resurfacing, replacement of safety barriers and audio tactile line markings, and maintenance for electrical assets. This commitment is in addition to the $35 million commitment in the 2024-25 budget.

We are fixing the mess that was created from that side over there, as highlighted here in my notes, and we are rebuilding the capabilities to make South Australia have better roads across our state. I am further advised that total South Australian road maintenance in 2024-25 was $189.5 million, and approximately half the South Australian road maintenance budget is spent in regional and remote areas, which I know would be of great interest to the honourable member.

The Hon. B.R. HOOD: I thank the minister for her very detailed response there as I watched the time tick away. I am just going to ask one more question, so I can hand over to the Hon. Nicola Centofanti and the Minister for Primary Industries. Just so I understand this correctly, if the minister can advise the chamber, importantly me: we have the privatised road maintenance contracts with Downer, Fulton Hogan and others. As I understand, Ventia is on top of that as the umbrella contract for all maintenance; is that correct?

The Hon. E.S. BOURKE: I have been advised that Ventia has nothing to do with road maintenance.

The Hon. B.R. HOOD: Okay, that is good. That is the answer that I wanted. When do the privatised road maintenance contracts expire?

The Hon. E.S. BOURKE: I understand that in July 2020, the Commissioner of Highways executed a contract for the delivery of road maintenance activities for a total value of just over $5 billion over a potential period of 13 years.

The Hon. B.R. HOOD: Thank you. I am done.

The ACTING CHAIR (The Hon. D.G.E. Hood): We will ask the next minister to position herself, please.

The Hon. N.J. CENTOFANTI: I want to turn to the Auditor-General's notes in regard to drought funding.

The Hon. C.M. SCRIVEN: Do you have a page number?

The Hon. N.J. CENTOFANTI: I do not have the page number on me, but I am pretty sure you can outline where the drought funding is.

The Hon. C.M. SCRIVEN: Usually, we have the page number.

The Hon. N.J. CENTOFANTI: I can find it in one moment. Bear with me.

The Hon. C.M. SCRIVEN: I think you might be referring to section 2.12, so I am happy to go with that assumption.

The Hon. N.J. CENTOFANTI: Thank you, minister; I appreciate it. Can the minister outline in particular what the cost of administering the drought support program has been in terms of PIRSA's staff? In particular, I guess the question I want to get to is: does the drought support package include administration costs in terms of PIRSA staff or contractors, or do all of the funds go directly to farmers?

The Hon. C.M. SCRIVEN: My advice is that the cost of administration is not included as part of the package.

The Hon. N.J. CENTOFANTI: Can the minister indicate how many primary producers have benefited to date from the $21 million in drought grants—that is $21 million in payments under the new drought support package 2024-25?

The Hon. C.M. SCRIVEN: The question that was asked included paying $21 million in grants. I am advised that a significant portion of that spend was for the On-farm Drought Infrastructure Rebate Scheme, which offers rebates to help primary producers implement infrastructure projects to manage current drought conditions and strengthen their preparedness for future droughts. In the period that this refers to—so for that grant program starting in November 2024 and closing in January 2026, but obviously this only refers to 30 June 2025—PIRSA advised that as at that time it had received 2,832 applications for that grant program and had processed 2,694 of them by July 2025.

Obviously there are a number of other grants, including other agencies administering drought support measures—including SA Health, the Department of State Development, the Department for Environment and Water and the Office for Recreation, Sport and Racing—covering areas such as small business support, health and wellbeing support, upgrades to parks and reservoirs, community grants and sporting grants. The answer that I have given refers only to the on-farm drought infrastructure grants.

The Hon. N.J. CENTOFANTI: Why did the Thriving Regions Fund grants decrease by $5 million to $10 million? I refer to page 272.

The Hon. C.M. SCRIVEN: I am advised that payments are made on achievement of milestones by grant recipients, so to the extent that milestones are not met in the year the allocation was approved, the balance is carried forward to be distributed to the applicant in a subsequent year on achievement of milestones. In that sense, it is not that there is less being paid out; it is simply that if milestones have not yet been met, those will be deferred.

The Hon. N.J. CENTOFANTI: Staying on page 272 in regard to drought funding, can the minister outline to the chamber how much of the $73 million package remains unspent and when it will be deployed? I note that I am talking about expenditure, not allocation.

The Hon. C.M. SCRIVEN: My advice is that, as at 30 June, just under $23 million had been spent.

The Hon. N.J. CENTOFANTI: Just to confirm, is the minister suggesting that $23 million of the $73 million package has been spent or is unspent?

The Hon. C.M. SCRIVEN: Spent.

The Hon. N.J. CENTOFANTI: The Auditor-General's Report, on page 273, notes that PIRSA manages loan schemes under the Rural Industry Adjustment and Development Act 1985, yet no new concessional loan products have been activated. Minister, given the widespread financial strain that has been reported and is continuing to be reported across primary industries, can you confirm whether you have received any formal correspondence from industry bodies calling for the establishment of no and low-interest concessional loans?

The Hon. C.M. SCRIVEN: I am advised that there have not been any requests for or applications to the Rural Industry Adjustment and Development scheme, which is the scheme to which the honourable member referred.

The Hon. N.J. CENTOFANTI: That was not my question. My question was whether the minister herself had received any formal correspondence from industry bodies calling for the establishment of no and low-interest concessional loans?

The Hon. C.M. SCRIVEN: No.

The Hon. N.J. CENTOFANTI: Is the minister indicating that under the Rural Industry Adjustment and Development Act 1985 and other schemes for rural assistance, the minister is not able to establish no and low-interest concessional loans?

The Hon. C.M. SCRIVEN: I will have to take that question on notice.

The Hon. N.J. CENTOFANTI: Perhaps when the minister is doing so, she can take on notice whether she has received any formal correspondence from industry bodies calling for the establishment of no and low-interest concessional loans, and whether her department has provided her with a formal briefing.

The Hon. C.M. Scriven interjecting:

The Hon. N.J. CENTOFANTI: I appreciate that but, minister, you are taking the question on notice as to whether or not you have the capacity to establish no and low-interest concessional loans. So in establishing whether you actually have the capacity to establish those no and low-interest concessional loans, I ask that you also take on notice whether you have received any formal correspondence seeking that you establish no and low-interest concessional loans.

The Hon. C.M. SCRIVEN: I am happy to take on notice matters that relate to the Auditor-General's Report, but not matters that are beyond that scope.

The Hon. N.J. CENTOFANTI: Were any internal audit reports or management reviews conducted by PIRSA to ensure expenditure growth was matched by corresponding service delivery outcomes? Specifically, if you are looking for a page reference, it is the interpretation and analysis of the financial report, which is on page 271.

The Hon. C.M. SCRIVEN: My advice is that any increases in expenditure will be obviously analysed by the Department of Treasury and Finance.

The Hon. N.J. CENTOFANTI: Can the minister outline whether PIRSA has any internal controls in place to ensure that temporary staffing, contractor expenses and grant allocations are properly monitored and not duplicated across the division?

The Hon. C.M. SCRIVEN: I am advised that all expenditure is monitored through the formal approval processes. The Auditor-General clearly did not identify any concerns in regard to temporary staff or contractors, otherwise it would have appeared in his report.

The Hon. N.J. CENTOFANTI: In regard to, again, regional drought funding on page 272, the South Australian Drought Package made $1.4 million available for standpipes for critical infrastructure needs in the Adelaide Hills and Fleurieu, but from budget and finance questions on notice, $1.245 million of this remains unspent. Can the minister confirm whether that money has now been spent or, if not, will that allocated money be spent on standpipes?

The Hon. C.M. SCRIVEN: My advice is that as at 30 June that had not been expended.

The Hon. N.J. CENTOFANTI: Given that it has not been spent, will that money be reallocated to other in-demand areas for the drought support package, or is that confined to standpipes?

The Hon. C.M. SCRIVEN: I would emphasise that my response was in regard to as at 30 June. My understanding is that there have been some payments or allocations since that time, and in general where there is an underspend we would seek that to cover other areas of the drought package.

The Hon. N.J. CENTOFANTI: Can the minister—I am happy for her to take it on notice—provide funding from 30 June in terms of the additional funds that have been spent on the standpipes?

The Hon. C.M. SCRIVEN: The Auditor-General's Report refers to the 2024-25 financial year. I have given the answer as at the end of that financial year.

The Hon. N.J. CENTOFANTI: In regard to expenses on page 271, can the minister indicate regarding the Struan Research Centre whether the insurance money has been fully paid out? Sorry, that would be relating to income rather than expenses. What was the total value of that payout?

The Hon. C.M. SCRIVEN: My advice is—although I am not sure if it relates only to 30 June or since—is that an insurance payment has been received. It has not as yet been fully paid out, because obviously the rebuild of the Struan Research Centre is still in its early stages.

The CHAIR: I conclude the examination of the Auditor-General's Report.

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