 | Introducing a new Auditor-General's OfficeNewsletter, Issue 4 September 2000 |
 Wayne Cameron, Auditor-General. INTRODUCING A NEW AUDITOR-GENERAL'S OFFICELate last year, the Audit Act was amended in a number of significant ways. Those changes sought to strengthen the independence of the Office from the Executive, enhance the accountability arrangements and restore operational autonomy to the Auditor-General. This latter change was effected through the abolition, on 1 January 2000, of Audit Victoria, and the transfer of the staff and responsibilities of that former statutory body to my Office. Since that date, much of my focus has been on establishing the appropriate organisational structure and arrangements for the new Office. The organisation chart shown on the following page sets out the fruits of that work and, now that almost all key senior positions have been filled, it is appropriate to introduce the new structure and certain members of the senior management team to you. As from 1 July 2000, this Office began operating from Level 34, 140 William Street, Melbourne. A small number of staff (Strategic Planning and Sector Liaison Group, and the Accounting and Auditing Policy Group) will remain at 222 Exhibition Street until the end of this year when accommodation arrangements at William Street are expected to be completed. Primary day-to-day contact for annual financial statement audits will be the Audit Director (from my Office) or Partner (where a contractor has been appointed). Overarching responsibility for all of my interests across a sector lies with the relevant sector director, in the Strategic Planning and Sector Liaison Group. Persons in this Group are interested in the medium to long-term issues across a sector, rather than individual audit issues emanating from the annual attest audit. They will be interested in learning about broader policy concerns as they affect the accountability and performance of entities across sectors. Thus, they will be involved in discussions on, for example, the effect of any new legislative requirements and systemic issues that need to be taken up with peak bodies, sponsoring departments or in other representative forums. I have divided the public arena into 5 sectors and allocated responsibilities to the following personnel:
 Our staff look forward to providing positive and timely services to our stakeholders. The Accounting and Auditing Policy Group, headed by Greg Pound, is responsible for providing pro-active technical leadership on auditing and accounting policy matters, and oversight of the contracting regime. Two directors in Greg's Group take lead roles:
Other recent senior appointments evident from the organisation chart are:
Now that this aspect of our activities is largely complete, I intend to visit auditees and other key stakeholders to explain why I have established the structure in the way that I have. It will take some time, however, to get around to some 540 audit bodies, 50 to 60 contract audit service providers and many others interested in, or affected by, the work of the Office. The new arrangements I have now set in place will provide a firm foundation for an Office that will play a leading role in providing positive and timely service to our various stakeholders. I look forward to introducing the new team to you and welcome any comments you might make to assist us in better serving the public interest.
J.W. Cameron
ORGANISATION CHART
TABLING OF INAUGURAL ANNUAL PLAN IN PARLIAMENTOur inaugural annual plan covering the 2000-2001 financial year was tabled in the Parliament on 1 June 2000. 
The plan describes our proposed work program for 2000-2001 and the resources required to implement that plan for the year. It includes:
The plan identifies the extensive nature of the transitional tasks necessary to address the re-absorption of staff and operational audit responsibilities from the former Audit Victoria. It also contains information on a new organisational structure for the Office introduced in response to the significantly changed legislative and operational environment. The contents of our annual plan for 2000-2001 may be accessed on the OfficeÕs internet website at www.audit.vic.gov.au FINANCIAL AUDIT SERVICE PROVIDERS MANUALThe Office recently issued its first integrated Financial Audit Service Providers Manual. The purpose of the Manual is to provide a concise overview of audit issues that an audit service provider needs to take into consideration in conducting a financial statement audit of a public sector entity. Each audit service provider has received a copy of the Manual. In addition, audit service providers can access the Manual on the OfficeÕs internet website. The Manual provides guidance on:
 Russell Walker, Assistant Auditor-General, at the Office's recent forum for audit service providers. The Manual was officially launched at a forum for audit service providers held in July 2000. The forum also provided an opportunity for senior staff of the Office to liaise with audit service providers. The forum attracted around 50 audit service providers who received presentations from:
RECENT DEVELOPMENTS IN PERFORMANCE REPORTING AND AUDITINGA pivotal element of the accountability framework established for entities forming part of the Victorian public sector is the presentation of annual reports to the Parliament. These annual reports include the audited financial statements and a report on operations. The latter provides Parliament and other users with information regarding the entity, its objectives, activities and performance during the relevant reporting period. In recognition of the importance of the performance-related information included in entity annual reports to such assessments, the December 1999 amendments to the Audit Act 1994 provided the Auditor-General with the mandate to audit any performance indicators included in the report of operations of public sector entities. Specifically, under section 8(3) of the Act: "The Auditor-General may audit any report of operations of an authority under section 45 of the Financial Management Act 1994 to determine whether any performance indicators in the report of operations -
 Regular discussions with stakeholders will continue to be a key feature of our operations.
While this provision provides the Auditor-General with discretion in determining the timing and extent of any audits undertaken of performance indicators, it also reflects a Parliamentary expectation that audit assurance will be provided in relation to this important area of public sector reporting in order to improve/strengthen the accountability of public bodies to the Parliament, and the community. Our Office is currently in the process of developing its approach to the discharge of this new additional responsibility. MAJOR CHANGES TO THE STATE'S AUDIT LEGISLATIONOne of the key features of the 1999-2000 financial year impacting on the strategic and operational activities of our Office was the passing of significant changes to the Audit Act 1994. In doing so, the Parliament signalled its clear desire for an objective and independent Auditor-General, closely aligned with, and directly accountable to, the Parliament. The legislative changes, which became effective from 1 January 2000, have:
These changes have reversed several of the amendments made to the Audit legislation in 1997. The amendments to the Act also provided a limited power of delegation to permit contract auditors to issue an audit opinion on the Auditor-General's behalf at the conclusion of an audit of a public body's financial statements. OFFICE'S RELATIONSHIP WITH THE PARLIAMENT STRENGTHENEDChanges to the Audit Act have strengthened the relationship of the Auditor-General with the Parliament, and have widened the role of the Parliament's Public Accounts and Estimates Committee on matters involving the Auditor-General and in respect of certain administrative aspects of the Office. The Committee has been assigned a specific role in:
After considering comments received from the Committee on the draft annual plan, the Auditor-General is required, under the amending legislation, to present the completed plan to each House of Parliament. The amendments also provide for the Auditor-General to present his Annual Report on the operations of the Office directly to the Parliament. In the past, the Annual Report was presented to the Parliament through the Premier as the designated responsible Minister. FURTHER NEW AUDIT RESPONSIBILITIESIn April 2000, the Audit Act was further amended to present a new budget review function for the Auditor-General. These changes assigned a responsibility to review the Government's estimated financial statements compiled as part of the annual budget process. The legislative changes involve the Auditor-General in examining prospective information and reporting to the Parliament. The developments in this area could be described as quite unique. The Office is not aware of any equivalent role for an Auditor-General in the budget process elsewhere within Australia, or internationally. AUDITOR-GENERAL'S PARLIAMENTARY REPORTING PROGRAM, SPRING 2000Our annual plan included details of the Auditor-General's proposed Parliamentary reporting program for 2000-2001.
For the Spring 2000 Parliamentary session, the Auditor-General intends to table the following Reports:
DID YOU KNOW THAT ...At 30 June 2000, the Auditor-General had responsibility for the audit of the Government's Annual Financial Report, the review of forecast financial statements within the State Budget, and the conduct of financial statement and performance audits of the StateÕs 543 public sector organisations. An indication of the magnitude of these responsibilities can be gleaned from the fact that public sector organisations collect income of approximately $33 billion annually, incur about $30 billion in annual expenditure and hold $113 billion in assets. Organisations audited comprise:
A complete listing of the organisations audited at 30 June 2000 is provided in Appendix 3 of our 1999-2000 Annual Report. OUR 1999-2000 ANNUAL REPORT NOW AVAILABLE
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