AUDITOR-GENERAL’S REPORT FINANCIAL AUDITS Volume Seven 2010 _part1 pot

17 Water utilities contributed $379 million to government during the year ended Hunter Water Corporation reported average number of unplanned interruptions per The NSW Office of Water’s

AUDITOR-GENERAL’S REPORT

FINANCIAL AUDITS Volume Seven 2010

Pursuant to the Public Finance and Audit Act 1983, I present Volume Seven

of my 2010 Report

Peter Achterstraat

Auditor-General

Sydney

November 2010

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i

Contents

Significant Items iii

Recommendations v

SECTION ONE – Overview Environment and Water Overviews 3

SECTION TWO - Commentary on Government Agencies Minister for Climate Change and the Environment 25

Department of Environment, Climate Change and Water 27

Environment Protection Authority 37

Environmental Trust 39

Royal Botanic Gardens and Domain Trust 42

Taronga Conservation Society Australia 45

Minister for Water 49

Cobar Water Board 51

Hunter Water Corporation 52

State Water Corporation 60

Sydney Catchment Authority 67

Sydney Water Corporation 76

Wyong Water Supply Authority 93

APPENDIX Appendix 1 – Agencies not reported elsewhere in this Volume 99

INDEX 101

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iii

Significant Items

Page

Environment and Water Overviews

In 2009-10, poor air quality days increased to 64 from 47 in 2008-09 and 23 in

2007-08 and is attributed to photochemical smog during the summer, dust storms and

At 30 June 2009, there were 272 contaminated sites across New South Wales of

The Department spent $214 million of the Climate Change Fund to help households,

businesses and government save energy and water and to reduce greenhouse gas

The New South Wales Home Saver Rebate Program, part of the Climate Change Fund,

has paid more than 263,000 rebates to residents since its commencement The

Department estimates related savings of 310,000 tonnes of greenhouse gas and

In the period October 2007 to June 2010, the Department paid 118,848 rebates to

residents for hot water systems The related payments from the Climate Change

The Department contributed $25.0 million to the Australian Government’s

$500 million National Clean Coal initiative The New South Wales Government has

committed $100 million over four years to the Fund, which will be mainly used to

In 2009-10, the NSW Office of Water finalised 246 compliance investigations under

the Water Act 1912 and Water Management Act 2000 resulting in two license

The Central Coast Water Corporation Act 2006 is expected to commence late 2010 17 Water utilities contributed $379 million to government during the year ended

Hunter Water Corporation reported average number of unplanned interruptions per

The NSW Office of Water’s information systems do not meet the information needs of

Department of Environment, Climate Change and Water

The total number of prosecutions commenced during the year for environmental

protection offences was the highest number since 2006 Of the 134 cases completed

Surveyed unregulated water invoices for 2007 were issued in September 2010 28 Purchases of water entitlements fell from 145,122 megalitres in 2008-09 to 40,122

megalitres in 2009-10 Purchases over the last four years totalled 252,694 megalitres 28

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iv

Taronga Conservation Society Australia

Paid attendance at Taronga Zoo increased by 15 per cent in 2009-10 The months

of July 2009 and April 2010 recorded higher than expected visitors following the

Hunter Water Corporation

Hunter Water is planning to complete its major projects in line with original

At 30 June 2010, 132 employees (20.9 per cent of all employees) had accrued more

than 40 days of annual leave entitlements Twenty two employees had more than

State Water Corporation

The volume of water sales during 2009-10 continued to remain at historically low

The Corporation’s performance against its Operating Licence declined slightly from

The Corporation spent $58.0 million on the first phase of its dam safety compliance

Sydney Catchment Authority

Over 31 per cent of the Authority’s employees had leave balances in excess of

The Authority has established a working group to address overtime costs of

$1.2 million, representing 5.7 per cent of total employees’ base pay 72

Sydney Water Corporation

The Minister for Water granted Sydney Desalination a network operating licence

The cost of constructing the desalination plant was approximately $90.0 million

The Maximo project, an Information Technology solution to assist with asset

Water customers have retained water saving behaviours developed during the

drought, keeping consumption in 2009-10 below the ceiling specified in the

Total recycled water from all sources was 35.8 gigalitres in 2009-10 80 Water loss from breaks and leaks has nearly halved from 68,620 megalitres in

2002-03 to 35,323 megalitres in 2009-10 Water loss represented seven per cent

Some employees received overtime payments higher than their base salary 87

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v

Recommendations

Page Environment and Water Overviews

I recommend:

 DECCW finalise the implementation of the revised Funding Agreement for grant

 DECCW report on compliance with National Australian Built Environment Rating

 the NSW Office of Water establish systems to meet the information needs of

the Independent Pricing and Regulatory Tribunal of New South Wales 20

Department of Environment, Climate Change and Water

I recommend the Department:

 continue to implement its policy requiring all staff with excessive leave

balances to have a leave management plan in place in order to further reduce

 further review the roles and responsibilities of all contract employees to

ensure:

 reliance on contractors is not excessive

 use of contract employees instead of permanent employees is

appropriate

 contractors do not become de facto employees by virtue of being

employed for an extended period of time

 the use of contract employees continues to represent value for

 ensure its systems are able to provide accurate data to enable it to prepare

specific project based submissions to The Treasury which address its

Hunter Water Corporation

I recommend the Corporation:

 the Corporation prepare a sound and comprehensive business case before any

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Hunter Water Corporation (continued)

I recommend the Corporation:

 create and maintain a single register for contracted employees

 using this register, review the effectiveness of its existing policies for

employment of contract employees to ensure:

 reliance on contractors is not excessive

 use of contract employees instead of permanent employees is

appropriate

 contractors do not become de facto employees by virtue of being

with the Corporation for an extended period of time

 use of contract employees continues to represent value for money 56

 review the effectiveness of its existing policies for managing the use of

State Water Corporation

I recommend the Corporation:

 review the effectiveness of its existing policies for managing overtime work

and analyse the underlying reasons for overtime payments that are

 create and maintain a single record of all contractors engaged by it

 using this record, periodically review the roles and responsibilities of all its

contractors to ensure:

 its reliance on contractors is not excessive

 use of contract employees instead of permanent employees is

appropriate

 contractors do not become de facto employees by virtue of being

with the Corporation for an extended period of time

 use of a contractor continues to represent good value for money

64

Sydney Catchment Authority

I recommend the Authority:

 create and maintain a single record of all contractors engaged by it

 using this record, periodically review the roles and responsibilities of all its

contractors to help ensure:

 its reliance on contractors is not excessive

 use of contract employees instead of permanent employees is

appropriate

 contractors do not become de facto employees by virtue of being

with the Authority for an extended period of time

 use of a contractor continues to represent good value for money 70

 continue its efforts to help ensure accumulated flex leave is taken rather

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Sydney Water Corporation

I recommend the Corporation:

 review the effectiveness of its existing policies for managing overtime 87

 continue to implement and monitor its existing Workforce Planning policies for

 create and maintain a single register for contracted employees

 using this register, review the effectiveness of its existing policies for

employment of contract employees to ensure:

 reliance on contractors is not excessive

 use of contract employees instead of permanent employees is

appropriate

 contractors do not become de facto employees by virtue of being

with the Corporation for an extended period of time

 use of contract employees continues to represent value for money

89

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Section One

1

Environment and Water Overviews

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