Department of Treasury and Finance

2016-2017 Annual Report

This annual report is presented to Parliament to meet the statutory reporting requirements of Public Sector Act 2009 and meets the requirements of Premier and Cabinet Circular PC013 Annual Reporting.

This report is verified to be accurate for the purposes of annual reporting to the Parliament of South Australia.

David Reynolds
Chief Executive
Under Treasurer


Section A: Reporting required under the Public Sector Act 2009, the Public Sector Regulations 2010 and the Public Finance and Audit Act 1987

Agency purpose or role

Working together to support the future prosperity and wellbeing of all South Australians.

Objectives

Our five objectives are:

  • Trust and empower our skilled, diverse, flexible and committed people.
  • Promote sustainable State finances.
  • Deliver timely high-quality service to meet the needs of our clients.
  • Support responsible budget and financial management.
  • Collaborate to deliver high quality advice on economic, social and environmental issues.

Our values, which reflect the South Australian Public Sector values, are:

  • We will proudly provide our Service to the community and Government of South Australia; and work to get the best results for long-term Sustainability for future generations.
  • We will do this by creating solutions together through Collaboration and Engagement; and strive for excellence through our Professionalism.

We will treat others with Respect; and act with Honesty and Integrity. We will show our Courage and Tenacity by never giving up; and we will have Trust in the ability of others

Key strategies and their relationship to SA Government objectives

Key strategy

SA Government objective

Trust and empower our skilled, diverse, flexible and committed people.

Supports all South Australian Economic and Strategic Priorities

Promote sustainable State finances.

South Australia’s Strategic Priority:
An affordable place to live

South Australia’s Economic Priorities:
Best place to do business

Support responsible budget and financial management.

South Australia’s Strategic Priority:
An affordable place to live

Deliver timely high quality services to meet the needs of our clients.

South Australia’s Strategic Priority:
An affordable place to live

South Australia’s Economic Priorities:
Best place to do business
Opening doors for small business

Collaborate to deliver high quality advice on economic, social and environmental issues.

South Australia’s Strategic Priority:
An affordable place to live

South Australia’s Economic Priorities:
Best place to do business
Opening doors for small business

Agency programs and initiatives and their effectiveness and efficiency

Program name

Indicators of performance / effectiveness / efficiency

Comments

Gambling Policy

Develop regulatory and tax arrangements for authorised betting operations, including place of consumption taxation.

Introduced amendments to the Authorised Betting Operations Act 2000 and Authorised Betting Operations Regulations 2016 to provide for the introduction of a new place of consumption wagering tax. The wagering tax provides additional sustainable revenue for the government to help meet services to the community and also meet the cost of potential harm from gambling.

Provided support to the Minister for Consumer and Business Services and the Treasurer in relation to Illegal Offshore Wagering Reform and a National Consumer Protection Framework for online wagering. This initiative aims to provide greater protection for consumers.

Commenced amendments to the Collections for Charitable Purposes Act 1939 on 1 December 2016 to reduce red-tape and reporting duplication for the South Australian charity sector.

Accountability for Public Sector Resources

Accountability for Public Sector Resources

Deliver the 2017-18 State Budget and the 2016-17 Mid-Year Budget Review

The 2017-18 State Budget and the 2016‑17 Mid-Year Budget Review were delivered and identified new initiatives having regard to public value in a transparent manner.

Produce and publish financial reports according to Generally Accepted Accounting Principles (GAAP) and Government Finance Statistics (GFS) standards.

The 2015-16 Consolidated Financial Report and Final Budget Outcomes were delivered on schedule. The reports provide information for the community on government revenues and expenses and key financial statistics.

Provide monthly monitoring on a range of agency performance indicators to the Budget and Performance Cabinet Committee

Budget and performance reporting was provided and encouraged sustainable public finances and efficient use of limited government resources.

Provide advice to the Government on a range of significant reforms, including disability reforms, national education funding, health funding and completion of the new Royal Adelaide Hospital and the energy market

Supported Government to be responsive and to adapt to change so that services to the public continue to be appropriate and best value for money.

Provide policy and financial analysis support to the Government in the preparation of its response to the Child Protection Systems Royal Commission (the Nyland Royal Commission into Child Protection)

Response delivered services and support to our most vulnerable children and is intended to enable children to be raised in a safe manner.

Co-ordinate an across government review of redundant legislation and regulations and implement their repeal.

Co-ordinated an across government review of redundant legislation, regulations and red tape, and simplified citizens’ interactions with the government. Continued to support South Australia’s economic priority: Best Place to do Business. Of the 84 initiatives announced as part of the inaugural Simplify Day, 93 percent has been delivered or are in progress.

Achieve ‘go live’ of the new private CTP Insurance market on 1 July 2016.

This measure was successfully achieved on time. It has enabled competition into the market by bringing in four well known and established private CTP providers for the first three years, before transitioning to a fully competitive market whereby motorists will be able to remain with their allocated CTP insurer, or choose to shop around for potential better offers.

Progress the commercialisation of transactional land services and property valuation functions.

On 10 August 2017, the Treasurer announced that the Land Services SA had been appointed to provide transactional land services on behalf of the government for a 40 year period in return for an up-front payment of $1.605 billion.

Land Services SA will provide land registry and property valuation services on behalf of the government and will be able to commercialise related data, subject to rights for government use. Land Services SA, in commercialising data, will be able to develop new and innovative product and service offerings for customers, subject to government approval.

Land Services SA has also committed to invest $35 million in technology and innovation within the first five years, establish an Innovation Hub in South Australia and work with local digital start-ups to support the start-up culture in South Australia.

Assume responsibility for the assessment, management and co‑ordination of unsolicited bids

This measure was achieved.

Prepare for the implementation of the new Australian Government Finance Statistics standard, to support enhanced Australian Bureau of Statistics reporting.

Implemented an updated Government Financial Statistics framework for reporting to Australian Bureau of Statistics from 1 July 2017. The framework has been updated to incorporate the changes outlined in ‘Australian System of Government Finance Statistics: Concepts, Sources and Methods, 2015’ (AGFS 15).

Treasury Services

Continue to broaden SAFA’s profile and penetration with investors.

Extended the South Australian Government Financing Authority’s (SAFA) debt profile with increased investor penetration.

Implement a new liquidity policy in line with industry best practice.

Implemented a new liquidity policy in line with Australian Prudential Regulatory Authority (APRA) standards. Accessed markets to successfully raise $5.5 billion of short and long term funding to refinance existing financial maturities and build SAFA’s liquidity buffer.

Financial Services Provision

Taxation revenue collected by RevenueSA: $3,725,058,993

Revenue resulting from compliance initiatives: $95,286,917

% of revenue banked on day of receipt:
99.51%

Cost for collection of $100 tax (on a cash basis):
60 cents

Implemented legislative changes announced in 2016-17 Budget.

In December 2016 RevenueSA finalised and endorsed an enhanced Risk Management Framework which documents RevenueSA’s approach to managing compliance risk.

Super SA remains in the most cost efficient quartile measured by Chant West Benchmarking report.

81 per cent achievement of approved service level standards by 30 June 2017.

98 per cent of member statements issued by 31 August 2016.

Superannuant payment summaries issued within 14 days from 1 July 2016.

Substantial progress towards implementation of the new administration system.

Completed implementation of new Australian Accounting Standard AASB 1056 providing transparency of statements.

Veterans’ Affairs

Chair the Memorialisation Group to appropriately recognise military service at the Jamie Larcombe Centre and provide advice as a member of the Oversight Panel for the development of the Centre.

The new Veterans’ Mental Health Precinct, named The Jamie Larcombe Centre, will be opened at Glenside Health Services Campus on 5 October 2017. The model of care is based on the existing model for Ward 17 at the Repatriation General Hospital, and is built on evidence-based practice to ensure the needs of current and future veterans are met. Memorialisation features at the site will provide a comforting environment for visiting veterans and their families.

Implement the Regional Engagement Strategy, based around the Cheer-Up Hut re-creations in Mount Gambier, Port Augusta and Loxton.

The Regional Engagement Strategy was implemented and created a valuable outcome by encouraging public engagement in the centenary of Anzac commemorations in regional South Australia. Attendance at the regional events, including satellite exhibitions were in excess of 50,000 people across the three regions.

Lead an official delegation to the centenary commemorations for the Battles of Fromelles and Pozieres.

A successful delegation along with commemorative ceremonies for the Battles of Fromelles and Pozieres was achieved, helping to raise public awareness of the service and sacrifice of South Australians during times of war. Valuable historical information was gathered for inclusion in a book being written about South Australia in the Great War.

Office of the Valuer-General

Commencement of a rolling five-year revaluation program in conjunction with transparency and accountability initiatives.

Commenced project planning and operational components of the Revaluation Initiative (RI).  The RI will improve valuation accuracy across the State, and underpins the fairness associated with property based taxation.

Record assessment management.

Around 920,000 assessments, resulting in a total Capital Value of $397.9 billion and total Site Value of $235.28 billion across the State for 2016‑17.

Included APY project which allocated road names and an Australian standard address and numbering system which allows 2,500 Aboriginal people to use an address for the first time to access essential services and provides clear property identification in the event of an emergency.

Legislation administered by the agency

Treasurer:

Bank Merger (BankSA and Advance Bank) Act 1996

Bank Mergers (South Australia) Act 1997

Casino Act 1997

Commonwealth Places (Mirror Taxes Administration) Act 1999

Debits Tax Act 1994

Emergency Services Funding Act 1998

Essential Services Commission Act 2002

Financial Institutions Duty Act 1983

Financial Sector (Transfer of Business) Act 1999

Financial Transaction Reports (State Provisions) Act 1992

Gift Duty Act 1968

Government Financing Authority Act 1982

Housing Loans Redemption Fund Act 1962

Interest on Crown Advances and Leases Act 1944

Land Tax Act 1936

Motor Vehicles Act 1959

National Tax Reform (State Provisions) Act 2000

New Tax System Price Exploitation Code (South Australia) Act 1999

Payroll Tax Act 2009

Public Corporations Act 1993

Public Finance and Audit Act 1987

Rural Advances Guarantee Act 1963

Stamp Duties Act 1923

State Bank (Corporatisation) Act 1994

Minister for Finance:

Benefit Associations Act 1958

Compulsory Third Party Insurance Regulation Act 2016

Electricity Corporations Act 1994

Electricity Corporations (Restructuring and Disposal) Act 1999

First Home and Housing Construction Grants Act 2000

Governors’ Pensions Act 1976

Judges’ Pensions Act 1971

Late Payment of Government Debts (Interest) Act 2013

Local Government Finance Authority Act 1983

Motor Accident Commission Act 1992

Motor Vehicles Act 1959

National Wine Centre (Restructuring and Leasing Arrangements) Act 2002

Parliamentary Superannuation Act 1974

Petroleum Products Regulation Act 1995

Police Superannuation Act 1990

SGIC (Sale) Act 1995

South Australian Timber Corporation Act 1979

South Australian Timber Corporation (Sale of Assets) Act 1996

Southern State Superannuation Act 2009

State Lotteries Act 1966

State Procurement Act 2004

Superannuation Act 1988

Superannuation Funds Management Corporation of South Australia Act 1995

TAB (Disposal) Act 2000

Taxation Administration Act 1996

Unclaimed Moneys Act 1891

Westpac/Challenge Act 1996

Minister for Veterans’ Affairs

ANZAC Day Commemoration Act 2005

Organisation of the agency

Office of the Chief Executive

Super SA

Revenue SA

Veterans’ SA

Financial Services

ICT Services

Public Finance

Budget, Analysis and Performance

Commercial Projects

South Australian Government Financing Authority (SAFA)

CTP Insurance Regulator

Lifetime Support Authority

State Valuation Office

http://www.treasury.sa.gov.au/our-department/about-us/organisation-structure

Other agencies related to this agency (within the Minister’s area/s of responsibility)

Not applicable

Employment opportunity programs

Program name

Result of the program

Jobs for Youth

DTF undertook a targeted trainee recruitment drive and employed four trainees under the Jobs4Youth program. Trainees and managers are supported through the DTF Cultural Diversity Officer.

Aboriginal Employment Plan

DTF currently have four Aboriginal and Torres Strait Islander trainees placed in the department, and have established networks for our current employee’s including the Nunga network group in collaboration with DPC. Support systems have also been put in place from the Aboriginal Cultural Consultation in mentoring and culture support, and have also included the creation of a wellbeing website targeted at Aboriginal Employees.

DTF has committed to increasing the cultural diversity across its workforce with a focus on Aboriginal and Torres Strait Islander employees. A review of the Reconciliation Action Plan is in process, which will include developing and implementing a new Aboriginal and Torres Strait Islander Employment and Retention Strategy.

Graduate Development Program

DTF coordinates the South Australian Government Graduate Development Program for graduates in accounting, finance, commerce and economics. Graduates have the opportunity to be considered for positions in a wide range of South Australian Government agencies. There were 26 graduates appointed through the 2017 DTF Graduate Development Program that secured positions in agencies across government — 6 of which were appointed to DTF.

Agency performance management and development systems

Performance management and development system

Assessment of effectiveness and efficiency

Online Performance Discussion Process, facilitated through OurDevelopment.

Following a feedback based review, the revised Performance Discussion Process was implemented in the 2016/17 reporting period. The process focuses on quality feedback performance discussions. All employees have bi-annual Performance Discussions which are documented through the online OurDevelopment system, and supported with appropriate training.

Occupational health, safety and rehabilitation programs of the agency and their effectiveness

Occupational health, safety and rehabilitation programs

Effectiveness

Injury Management

Reduction in workers compensation costs and work injured employees.

DTF’s significant injury rates have consistently remained lower than the rest of the SA Public Sector.

Early intervention assessments are conducted within 24 hours of an injury reported.

WHS performance measures to align with key across Government safety performance targets have been met.

Wellbeing & Engagement

Delivery of a comprehensive Wellbeing Program based on the concept of Healthy Body/Healthy Mind. Employee wellbeing program to help build resilience and a positive culture with a focus on psychological wellbeing.

The Wellbeing Program has been established, monitored and there has been positive outcomes against all targets.

Fraud detected in the agency

Category/nature of fraud

Number of instances

No fraud was detected in the agency during 2016–17

0

Strategies implemented to control and prevent fraud

The agency’s framework outlines the process for identifying and responding to the risk of fraud. The Framework consists of the following documents;

  • Fraud and corruption policy
  • Fraud and corruption procedure
  • Fraud and corruption control strategy

Specifically, the detection activities are;

  • effective internal controls
  • whistleblower process
  • review transaction reports
  • review management reports
  • data analysis
  • internal and external audits
  • preliminary investigation protocol
  • review of internal controls post any incident

These documents also detail the reporting requirements; serious or complex offences against DTF and/or the South Australian Public Sector that need to be referred to Office for Public Integrity (OPI) or inquiry agencies to investigate.

This Fraud and Corruption Control Strategy was reviewed by Risk and Audit Services and approved by the Audit and Risk Committee in November 2016.

Additionally the Department engages an independent fraud and corruption specialist once every three years to conduct a Fraud, Corruption and Maladministration Risk Assessment for the Department. This is currently in progress.

The Department documents all fraud, corruption and maladministration risks in the Department’s Fraud Risk Register.

The Financial Management Compliance Program (FMCP) implemented within the Department outlines the process for managing and controlling all departmental risks including fraud, corruption and maladministration risks, and is presented to the Audit and Risk Committee and the Chief Executive annually. The results of the latest FMCP exercise were reported to the December 2016 Audit Committee, without any fraud risk actions identified.

The Department has a zero tolerance for fraud and corruption and any inappropriate behavior by employees will result in disciplinary action and be reported to the Office for Public Integrity.

Processes are in place for recording, analysing, reporting and escalating fraud and corruption loss events and control failures. These include the endorsement of key mechanisms in preventing, detecting and responding to the risks of fraud.

These processes are supported by:

  • Annual internal audit plans;
  • Monthly Executive Financial Performance Reports; and
  • Management certification of internal controls as part of the Department’s Financial Management Compliance Program (FMCP) and the end of financial year statements preparation process.

Staff are aware of their obligations under the Public Sector Act 2009 and the Code of Ethics. Awareness training is managed and monitored for new and existing employees on behalf of DTF, by the Department of Premier and Cabinet (DPC) Organisational Development team. New employees complete the Fraud and Corruption Awareness training unit within 6 months of commencing employment. Follow up is conducted by DPC Organisational Development, via an automated email to the user the week before the due date and continues every Monday until the training unit is complete.

Data for the past five years is available at: https://data.sa.gov.au/data/dataset/department-of-treasury-and-finance-annual-report-statistics

Whistle-blowers’ disclosure

Number of occasions on which public interest information has been disclosed to a responsible officer of the agency under the Whistle-blowers’ Protection Act 1993

 

0

Data for the past five years is available at: https://data.sa.gov.au/data/dataset/department-of-treasury-and-finance-annual-report-statistics

Consultants

The following is a summary of external consultants that have been engaged by the agency, the nature of work undertaken and the total cost of the work undertaken.

Consultants

Purpose

Value

Consultancies below $10,000 each

SAFA

Purpose (combined)

$18 474

Super SA

Purpose (combined)

$16 751

Non SAFA & Super SA

Purpose (combined)

$59 320

Total of consultancies below $10,000 each

$94 545

Consultancies above $10,000 each

SAFA:

  

Taptu Pty Ltd

SAFA intranet improvements

 

Julia Dunstone

Actuarial Services - Large Claims Hindsight Review

 

PriceWaterhouseCoopers

GST review – SAFA apportionment rate

 

Ernst & Young

Accounting advice – Public private partnership for the Royal Adelaide Hospital

 

KPMG

Insurance System Review

 

DibbsBarker

Actuarial Services – Large Claims Hindsight Review

 

Leed Consulting Pty Ltd

Consulting relating to Denison Organisational Culture Survey

 

AON

2017 Catastrophe Modelling Fee

 

Finity

Actuarial Services

 

Super SA:

  

SLCA Pty Ltd

Advice in relation to the impact of federal budget changes

 

KPMG

Member communication and documentation review

 

PriceWaterhouseCoopers

Operational Risk Quantification Review

 

Non SAFA & Super SA:

  

PriceWaterhouseCoopers

Preparation of enterprise risk management services

 

University of Adelaide

Wagering tax project

 

ACIL Allen Consulting

Wagering tax

 

KPMG

Data Analysis and Modelling (Business Survey)

 

Ernst & Young

Capability Review of the South Australian Department of Treasury and Finance

 

Enduring Change Pty Ltd

Competition Scheme Model Development

 

ACIL Allen Consulting

Evaluate options in support of the Energy Plan

 

University of Adelaide

1. Development of an economic plan for Whyalla.

2. Fee for “Economic Impacts of Infrastructure Investment”

 

Ernst & Young

Provide RISTEC post implementation review

 

University of Adelaide

International Water Initiative

 

PriceWaterhouseCoopers

Lead Commercial Advisor to the Compulsory Third Party Insurance Market Reform Project

 

BIS Oxford Economics Pty Ltd

Economic Advisors to the Land Services Commercialisation Project

 

Investec Australia Ltd

Transaction Advisors to the Land Services Commercialisation Project

 

Promentor Pty Ltd

Identify and evaluate opportunities to achieve service improvements and efficiencies in the operation of the new Royal Adelaide Hospital

 

PriceWaterhouseCoopers

ICT and Business Reform Advisor, Compulsory Insurance Market Reform Project

 

Total all consultancies

$3 840 456

Data for the past five years is available at: https://data.sa.gov.au/data/dataset/department-of-treasury-and-finance-annual-report-statistics

See also https://www.tenders.sa.gov.au/tenders/index.do for a list of all external consultancies, including nature of work and value. See also the Consolidated Financial Report of the Department of Treasury and Finance http://treasury.sa.gov.au/ for total value of consultancy contracts across the SA Public Sector.

Financial performance of the agency

The following is a brief summary of the overall financial position of the agency. The information is unaudited. Full audited financial statements for 2016-17 are attached to this report.

The department’s revised operating budget provided for a net operating deficit of $1.217 million. The department recorded an actual net operating surplus of $11.786 million for 2016–17. The favourable variance of $13.003 million is primarily due to:

  • A delay in the transition of the State Valuation Office from the Department of Planning, Transport and Infrastructure (DPTI) to the Department of Treasury and Finance (DTF). This delay resulted in the actual expenses and revenues relating to the State Valuation Office being recorded against DPTI while DTF held the operating budget (expenditure $13.128 million & revenue $13.875 million);
  • Delays in several projects resulting in under expenditure ($6.549 million) for which the department will apply for carryovers into 2017–18; and
  • A delay in the transfer of the ANZAC Centenary Memorial Walk ($9.971 million) which was budgeted to transfer to the Adelaide City Council as a donated asset for nil consideration. The transfer was delayed until the end of the warranty/defect period and is now scheduled for 2017–18.

Summary Income Statement

 

Budget
2016–17
$000

Actual Result
2016–17
$000

Variance
$000

Expenses

155 019

122 218

32 801

Revenues

81 367

61 569

(19 798)

Net cost of providing services

73 652

60 649

13 003

Revenues from SA Government

72 435

72 435

Payments to SA Government

Net result

(1 217)

11 786

13 003

Other financial information

Nil to report.

Other information requested by the Minister(s) or other significant issues affecting the agency or reporting pertaining to independent functions

N/A

Section B: Reporting of public complaints as requested by the Ombudsman

Summary of complaints by subject

Public complaints received by RevenueSA

Category of complaints by subject

Number of instances

Customer service provided by Revenue SA

5

Notice incorrectly addressed

3

Public complaints received by Super SA

Category of complaints by subject

Number of instances

Process

45

Entitlements

28

Investments

28

Policy

15

Member communication

7

Fees

1

Data for the past five years is available at: https://data.sa.gov.au/data/dataset/department-of-treasury-and-finance-annual-report-statistics

Complaint outcomes

Nature of complaint or suggestion

Services improved or changes as a result of complaints or consumer suggestions

RevenueSA – customer service

Expectations of customer service reinforced with staff members.

RevenueSA – notice incorrectly addressed

Matter dealt with as a matter of priority to ensure future notices sent to the correct address.

There is now an online change of address form available for Emergency Services Levy and Land Tax on the RevenueSA website.

Super SA – policy (nomination of beneficiaries)

Introduction of the ability to nominate a legal personal representative to receive a member’s entitlement in the event of death.

Super SA – policy (time limit to apply for Income Protection Insurance)

The Board Delegations were updated to allow the Office to assess extension to time limits (in specified circumstances) thereby reducing the volumes reviewed by the Board and reducing the waiting time for members.

Super SA – process (increase security for online member access)

Temporary suspension of online access when a member cancels a third party authority. Online access can only be reinstated by the member after undergoing standard security checks.

Super SA – member communication (Income Protection and Death and TPD insurance page on our website)

Updated the insurance page on the Super SA website to be clearer.

Super SA – process (salary sacrifice process)

The salary sacrifice forms were updated and the process streamlined.

Super SA – member communication (application of insurance limitations)

Improved communication to members when limitations are placed on their insurance.

Appendix: Audited financial statements 2016-17

Audited financial statements 2016-17 (2.6 MB PDF)

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