AUDITOR-GENERAL’S REPORT FINANCIAL AUDITS Volume Nine 2009_part3 pptx

Department of Education and Training  the Department has: created the Integrated Program Office (IPO), which is responsible for implementation, management and delivery of the BER, including conducting its own audit visits requested its Audit and Risk Management Committee to review and monitor the management and delivery of the BER engaged its internal auditors in an ongoing assurance role in relation to the BER program’s expenditure and to provide an annual certification of expenditure to the Commonwealth The detailed statement of income and expenditure for the Funding is to be audited annually by the New South Wales Auditor-General I anticipate reporting my audit findings to the Commonwealth Department of Education, Employment and Workplace Relations (DEEWR) for the year ended 30 June 2009 in early 2010 The Australian National Audit Office (ANAO) is examining the effectiveness of the establishment of the Primary Schools for the 21st Century element of the program by DEEW) The New South Wales Government has set up a BER website providing detailed information on a school by school basis It has also set up a formal complaints process via email At the date of this Report no complaints had been lodged through this process The Department advised that it receives queries from schools on the BER projects and it works with those schools to resolve the issues Refer to www.ber.nsw.gov.au We will audit the expenditure of BER funds during our annual audit of the Department in 2009-10 School Facilities and Building Maintenance The Department has a year enhancement program for addressing maintenance backlog The total cost of this project, as at 2004, was identified at $120 million The Government allocated additional funding of $30.0 million in 2006-07 and again in 2007-08 In 2008-09 an additional $31.6 million was allocated to fund the maintenance backlog As a result of the additional funding, the Department has completed a program of works which has reduced the estimated maintenance backlog to $21.3 million ($50.8 million in 2007-08) The expenditure details for each region are reflected in the table below: Year ended 30 June Hunter/Central Coast Illawarra and South East New England North Coast North Sydney Riverina South Western Sydney Sydney Western New South Wales Western Sydney 2009 $’000 2008 $’000 3,643 1,322 1,159 2,617 4,837 1,372 3,578 6,135 2,075 3,818 31,323 Total 3,958 1,221 1,293 2,787 5,086 1,480 3,772 5,984 2,008 3,734 30,556 Source: DET Statistics (unaudited) This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 17 Department of Education and Training Total school maintenance expenditure increased from $246 million in 2007-08 to $292 million in 2008-09 No Commonwealth funded school maintenance programs were undertaken in 2008-09 The Department is addressing contaminants in schools with an ongoing program of asbestos containment and eradication In 2008-09, the Department spent $429,000 on the containment and eradication of, mainly, in-ground asbestos in schools over all regional areas The Department provides advice to The Treasury, as part of the State Budget process, on its Total Asset Management Plan and funding requirements for the provision of education facilities The Department uses proceeds from the sale of surplus parts of school sites to partially fund improved facilities In 2008-09 the Department received $2.7 million from such sales compared to a predicted income of $8.8 million Planned Computer Systems Replacement In 2006, we reported that the Department’s Learning Management and Business Reform (LMBR) program will replace its finance, payroll and human resources systems and the school management system over the next four years Phase implementation costs are estimated at $153 million The project incorporates all state government schools, the Department’s regional and state office locations and TAFE NSW institutes Phase of the program has now progressed to User Acceptance Testing of the finance system which will be implemented for state and regional offices Business Readiness Testing, implementation of shared service centre, training and data migration will be undertaken prior to the software commencement on March 2010 The staged development and implementation of the finance system for schools will follow completion of the TAFE NSW finance component, scheduled for implementation in June 2010 A proposal is currently underway to commence the human resources and payroll development for TAFE NSW following the design stage The Program Steering Committee continues to be the peak governance body for the program A Risk Management methodology and approach has been developed and implemented The program reports on major risks to the Department’s Executive and to the Audit and Risk Committee Expenditure in 2008-09 was $43.5 million ($20.7 million) and total costs incurred to 30 June 2009 were $74.1 million We will continue to review the program’s implementation and monitor its progress Leave Recording The Department introduced an online leave system called eLAPS (Electronic Leave Application Processing System) in 2004-05 to improve leave recording In the past, delays in recording leave taken have resulted in salary overpayments that were difficult to recover The Department continues to promote eLAPS in schools by developing programs to educate and train users At 30 June 2009, 45.7 per cent (33.5 per cent in 2008) of all leave applications received from teachers and 41.2 per cent (29.5 per cent) from school administrative and support staff have been submitted electronically through eLAPS However, a large number of leave applications are still recorded on the manual system, which the Department advised largely relate to complex leave entitlements that require more analysis and manual calculation by the staff in the Employee Services Centres In addition, the Department advised that Human Resources staff involved in identifying the business requirements for the Learning Management and Business Reform program to replace the existing payroll and leave systems with SAP have raised issues relating to the recording of attendance in schools The need to ensure the complete capture and recording of leave in the detailed design phase of the new SAP system has been emphasised This is trial version www.adultpdf.com 18 _Auditor-General’s Report to Parliament 2009 Volume Nine Department of Education and Training Annual Leave I recommend that the Department continue to review the effectiveness of their policies for managing excessive annual leave balances Number of staff with more than 40 days annual leave Entitlement (days) at 30 June 2009 No of Employees Total Days Liability $’000 >100 81-100 61-80 41-60 42 37 128 691 5,444 3,353 8,876 33,073 1,566 941 2,558 9,636 Total 898 50,746 14,700 There has been little improvement from last year In 2007-08, 902 employees had excess annual leave balances totalling 51,125 days and a liability of $14.2 million The Department advised that the Human Resources Directorate reviews leave balances annually Employees with recreation leave balances in excess of 40 days are advised that, in accordance with the Award, they must reduce their leave balance by a given date or obtain the appropriate approval under the Award to conserve their excess recreation leave The new Crown Employees (Public Service Conditions of Employment) Award 2009 includes a new clause requiring staff to reduce their recreation leave balances below weeks (i.e 40 days for a full time employee or a pro rata equivalent for a part time employee) by 27 January 2010 The Award still provides for the conservation of recreation leave in excess of 40 days where the delegate is satisfied that a staff member is prevented by occupational or personal reasons from taking sufficient recreation leave to reduce their accrued leave below an acceptable level Teacher Age Profiles The Department is still faced with the loss of large numbers of retiring teachers and their associated skills While the overall impact of the ageing workforce is likely to be gradual, there is still a risk of teacher shortages This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 19 Department of Education and Training Using departmental statistics, the table below details the age profile of permanent teachers as at July 2009: 2009 Age Group 20 25 30 35 40 – 45 50 – 55 60 65+ No of Teachers 24 29 34 39 44 49 54 59 64 2008 Percentage No of Teachers Percentage 868 3,924 4,941 6,077 5,325 6,290 11,185 8,439 1,927 374 947 3,973 4,820 6,146 5,110 6,885 11,951 7,813 1,635 282 1.9 8.0 9.7 12.4 10.3 13.9 24.1 15.8 3.3 0.6 49,350 Total 1.8 7.9 10.0 12.3 10.8 12.7 22.7 17.1 3.9 0.8 100.0 49,562 100.0 Source: DET Personnel system (unaudited) Statistics show that 44.1 per cent of school teachers are aged 50 years and over (43.8 per cent in 2008) The Department advised that these employees may reach retirement age over the next eight years, with the majority in the later age groups reaching retirement age in the next four to six years To ensure an adequate supply of teachers, the Department undertakes comprehensive workforce planning to develop teacher supply and demand projections for permanent teachers over a seven-year period The Department also has initiatives in place to attract new teachers such as active promotion of teaching as a career This is trial version www.adultpdf.com 20 _Auditor-General’s Report to Parliament 2009 Volume Nine Department of Education and Training FINANCIAL INFORMATION Abridged Consolidated Operating Statements Year ended 30 June Consolidated 2009 $’000 Parent 2008 $’000 2009 $’000 2008 $’000 8,158,551 1,766,849 405,939 210,488 9,455 7,609,666 1,648,682 391,931 209,712 4,741 7,195,480 1,478,451 327,848 234,212 9,455 6,714,706 1,346,025 316,231 239,379 4,741 TOTAL EXPENSES 10,551,282 9,864,732 9,245,446 8,621,082 TOTAL REVENUE 951,554 870,508 924,290 849,946 Employee related Operating expenses Depreciation and amortisation Grants and subsidies Other expenses Other gains/(losses) 3,088 (8,977) 3,072 (7,271) NET COST OF SERVICES 9,596,640 9,003,201 8,318,084 7,778,407 Less Government contributions 9,752,250 9,123,593 8,480,140 7,879,508 155,610 120,392 162,056 101,101 SURPLUS Employee related expenses represent 77.8 per cent (77.9 per cent) of total expenditure of the Department The $481 million increase was primarily due to a 4.4 per cent salary increase for teachers in January 2009 and a four per cent salary increase for administrative staff effective July 2008 The increase in total revenue of $74.3 million was primarily due to a $34.1 million rise in school and community revenue and external receipts and a $35.1 million increase in Commonwealth grants and contributions Abridged Consolidated Balance Sheets At 30 June Consolidated Parent 2009 $’000 2008 $’000 2009 $’000 2008 $’000 Current assets Non-current assets 851,328 17,029,562 730,049 16,751,106 689,264 14,038,235 577,133 13,772,121 TOTAL ASSETS 17,880,890 17,481,155 14,727,499 14,349,254 841,957 199,590 616,847 156,261 645,509 198,748 472,493 155,575 1,041,547 773,108 844,257 628,068 16,839,343 16,708,047 13,883,242 13,721,186 Current liabilities Non-current liabilities TOTAL LIABILITIES NET ASSETS This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 21 Department of Education and Training The increase in current assets of $112 million was primarily due to an increase of $75.0 million in the Department’s cash at bank and the school bank balances of $14.8 million Current liabilities increased $173 million due mainly to an increase in payables of $93.3 million, a liability to Consolidated Fund of $21.2 million and a rise in employee benefits and related on-costs provisions of $58.7 million Non-current liabilities increased $43.2 million due mainly to the increase in borrowings of $40.8 million relating to the public private partnership projects for construction, design, finance and maintenance of a number of schools Surplus Properties During 2008-09, 29 school properties, surplus to the Department’s needs, were sold for $16.1 million ($26.6 million) At 30 June 2009, the value of surplus properties was $62.0 million Abridged Service Group Information The Department’s consolidated net cost of services on a service group basis is detailed below: Year ended 30 June Net Cost of Services 2009 Budget* $’000 Preschool education services in government schools Primary education services in government schools Secondary education services in government schools Non-government schools TAFE NSW and community education Vocational education and training NSW Adult Migrant English Service (AMES) A.C.N 093 230 374 Pty Limited Not Attributable** Total all service groups * ** 2009 Actual $’000 Net Assets 2008 Actual $’000 2009 Actual $’000 24,948 27,450 25,267 4,012,363 4,249,775 3,903,678 7,419,128 7,446,050 3,705,758 9,654 1,415,242 138,741 3,815,948 10,262 1,337,970 162,724 3,595,875 11,223 1,301,455 176,653 5,429,364 (111) 3,002,919 (3,743) 5,422,807 (80) 2,997,051 (2,825) -9,306,706 (7,489) 9,596,640 (10,946) (4) (1,960) 2008 Actual $’000 (2,989) -996,735 9,003,201 16,839,343 (1,482) 22,473 2,289 821,764 16,708,047 Per the 2008-09 Budget Papers - net of transfer payments Represents items that could not be reliably allocated to a ‘service group’ This is trial version www.adultpdf.com 22 _Auditor-General’s Report to Parliament 2009 Volume Nine Department of Education and Training Cost of Providing Government School Education Using departmental statistics of government school enrolments and relevant program costs, some broad trends of cost per student for primary and secondary education over the past four years were: Year ended 30 June 2008 2007 2006 431,447 314,290 430,885 307,260 431,618 307,018 434,366 306,049 745,737 738,145 738,636 740,415 Program costs(b): Primary $m Secondary $m 4,250 3,816 3,904 3,597 3,721 3,346 3,541 3,270 Total $m 8,066 7,501 7,067 6,811 Actual enrolments(a): Primary students Secondary students Total Funding per student: Primary $ Secondary $ Average $ 2009 9,851 12,142 10,816 9,060 11,707 10,162 8,621 10,898 9,568 8,152 10,685 9,199 Source: DET Statistics (unaudited) (a) DET Census date The 2009 figures are estimated figures derived from the NSW Budget papers 2008-09 as actual enrolment figures were not available at the time of the preparation of this Report (b) Program costs are net cost of services for government primary and secondary schools excluding transfer payments Program costs used in the calculation of cost per student included non-cash items, leave and superannuation liabilities assumed by the Crown Entity Average enrolments increased by 0.7 per cent over the last four years and the costs of funding per student increased by 17.6 per cent during the same period This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 23 Department of Education and Training The table below details the number of Year to 12 students currently enrolled in New South Wales government schools who were from outside the government sector and the percentage of 2009 enrolments by region: Region Number Hunter/Central Coast Illawarra and South East New England North Coast North Sydney Riverina South Western Sydney Sydney Western New South Wales Western Sydney 2009 % Enrolments 3,319 2,669 1,203 3,416 4,173 1,746 4,937 3,631 2,001 3,997 31,092 Total 3.5 4.3 6.2 5.7 5.5 6.0 4.3 4.7 5.9 4.5 4.7 Source: Data Analysis and Collections, Planning and Innovation Data extracted from National Schools Statistics Collections (NSSC) 2008 and 2009 (Preliminary) (unaudited) Notes:  The number of students from outside the government system has been adjusted down for the maximum calculated duplicates  It is not possible to further differentiate whether this group of students was from the non-government sector, interstate or overseas  Figures reported above exclude 2009 Kindergarten students and support students  Figures were derived by comparing students who are currently enrolled in the government system with their whereabouts same time last year The table below details the number of international students in government schools and fees raised over the past three years: Year 2008 2007 2006 Number of students enrolled Fees raised $m 3,470 34.1 2,814 25.9 2,100 20.4 Source: Data provided by DET International and TAFE NSW National Business (unaudited) Notes:  Data above is for calendar years, not financial years  Students not contribute equally to the revenue raised This is due to the followings: The number of students enrolled includes students enrolled for any part of the calendar year There is a different fee charged for primary school, junior secondary school, senior secondary school and intensive English provision  International students may enrol for more than one year Therefore, the total number of students for the three years reported does not indicate the number of individual international students involved The number of international students enrolled increased by 23.3 per cent in 2008 resulting in an increase in fees of $8.2 million or 31.7 per cent This is trial version www.adultpdf.com 24 _Auditor-General’s Report to Parliament 2009 Volume Nine Department of Education and Training Cost of Funding Non-Government School Education by the Department In 2008–09, the New South Wales Government provided funding to 930 non-government schools (936 in 2007-08) Funding is mainly in the form of a per capita allowance and an interest subsidy scheme Some broad trends of funding per student were: Year ended 30 June 2009 2008 2007 2006 187,406 185,451 186,537 183,399 186,005 182,676 185,642 181,232 372,857 369,936 368,681 366,874 Program costs(b): Primary $m Secondary $m 336 422 323 408 303 390 287 372 Total $m 758 731 693 659 1,791 2,276 2,033 1,729 2,224 1,975 1,629 2,137 1,881 1,543 2,054 1,795 Average enrolments(a): Primary Students Secondary Students Total Funding per student: Primary $ Secondary $ Average $ Source: Department of Education and Training (unaudited) (a) Average enrolments represent those non-government enrolments that qualified and received State recurrent funding This does not include full fee paying overseas students (b) Program costs used in calculating cost per student included per capita grants, interest rate subsidies Average enrolments increased by 1.6 per cent over the last four years and the costs of funding per student increased by 13.3 per cent during the same period Grants for Conveyance of School Children The Department’s School Student Special Transport Scheme currently provides transport assistance to 10,500 eligible students with disabilities between their permanent residences and over 800 government and non-government schools at no cost to families The Scheme aims to assist those students who are not able to travel independently and whose parents and carers can demonstrate that they are unable to provide or arrange transport for their child either fully or in part The Scheme uses around 650 transport operators to provide over 2,300 return services to and from school each day (over 4,600 trips per day) The services of over 720 escorts are also engaged to support safe travel for students This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 25 Department of Education and Training The table below details the total cost and the number of student applications approved and rejected over the past five years: Year ended 30 June 2009 2007 2006 2005 72,932 10,279** 314** 10,593** Total cost $’000 Applications approved* Applications declined* Total Applications 2008 68,399 10,771 361 11,132 59,800 10,611 200 10,811 51,468 10,176 288 10,464 48,154 10,062 350 10,412 Source: Department of Education and Training (unaudited) * Data provided is for calendar years, not financial years ** Data to 11 August 2009 The approval rate for 2009 student applications was 97 per cent (96.7 per cent in 2008) This Scheme operates in addition to the Ministry of Transport’s School Student Transport Scheme, which provides subsidised transport for eligible school students to travel to school using existing public transport services and dedicated school bus services DEPARTMENT ACTIVITIES The Department coordinates the delivery of education and training services in New South Wales from pre-school to tertiary It is responsible for providing school education, vocational education and training and has certain regulatory and service responsibilities to private schools, private providers of education and training and universities For further information regarding the activities of the Department, refer to www.det.nsw.edu.au CONTROLLED ENTITIES New South Wales Technical and Further Education Commission (TAFE NSW) Separate comments on TAFE NSW and its controlled entities TAFE NSW Commission Division and A.C.N 093 230 374 Pty Limited (formerly TAFE Global Pty Ltd) are included elsewhere in this Report NSW Adult Migrant English Service (AMES) AMES provides English language learning opportunities for adult migrants and job seekers The Commonwealth Government primarily funds AMES For further information on the Service, refer to www.ames.edu.au This is trial version www.adultpdf.com 26 _Auditor-General’s Report to Parliament 2009 Volume Nine Department of Education and Training FINANCIAL INFORMATION Year ended 30 June 2009 $’000 2008 $’000 Revenue Employee related expenses Other expenses (Deficit)/surplus Net (liabilities)/assets (at 30 June) 49,426 18,376 31,523 (473) (2,343) 44,600 14,846 22,328 7,426 22,475 Revenue increased by $4.6 million ($3.6 million) as a result of increased demand for AMES services Other expenses increased by $9.2 million due to:    an intra-agency payment to the Department of $5.0 million to ensure AMES complies with its obligation under the competitive neutrality policy a $2.5 million increase in fees and charges, and a $1.5 million increase in rent and related expenses Nets assets fell mainly due to an increase in superannuation liability from a prepaid superannuation of $3.9 million in 2007-08 to a net superannuation liability of $19.7 million in 2008-09 as a result of falls in superannuation reserves due to the global financial crisis This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 27 ... www.adultpdf.com 20 _Auditor-General’s Report to Parliament 2009 Volume Nine Department of Education and Training FINANCIAL INFORMATION Abridged Consolidated... www.adultpdf.com 26 _Auditor-General’s Report to Parliament 2009 Volume Nine Department of Education and Training FINANCIAL INFORMATION Year ended... superannuation reserves due to the global financial crisis This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 27