New South Wales Technical and Further Education Commission AUDIT OPINION The audits of the Commission and its controlled entities’ financial reports for the year ended 30 June 2009 resulted in unqualified Independent Auditor’s Reports Unless otherwise stated, the following commentary relates to the consolidated entity PERFORMANCE INFORMATION Size and Scope of the Commission in New South Wales The Commission is the largest vocational education and training (VET) provider in Australia Year ended 30 June 2006-2008 Change % Increase/ (Decrease) Total enrolments Annual student hours (ASH) (’000) Net cost of services * ($’000) ASH per enrolment Net cost of services/enrolment ($) Net cost of services per ASH ($) 0.7 3.6 (1.9) 3.2 (2.6) (5.5) 2008 2007 2006 504,009 112,660 1,188,845 224 2,359 10.53 497,747 108,509 1,204,231 218 2,419 11.10 500,410 108,785 1,212,107 217 2,422 11.14 * Net cost of services is for the financial year ended 30 June, whereas enrolments and student hours are for the calendar year Source: New South Wales Technical and Further Education Commission (unaudited) Enrolments have remained steady and there has been a 3.6 per cent increase in hours of training delivered since 2006 The Commission has advised that this trend reflects a 0.7 per cent increase in enrolment numbers and also a change in the student profile, with an increasing number of students undertaking studies in longer higher level qualifications In 2008, 42.7 per cent of all enrolments were in these higher level qualifications (Certificate III and above) compared to 40 per cent in 2006 Higher level qualifications provide better employment outcomes Increasing the number of people with higher level qualifications has been an agreed goal of State and Commonwealth governments for several years Enrolments by Aboriginal and Torres Strait Islanders have increased by 25.3 per cent since 2006, while enrolments by students from language backgrounds other than English increased by 11.6 per cent in the same period This is trial version www.adultpdf.com 28 _Auditor-General’s Report to Parliament 2009 Volume Nine _ New South Wales Technical and Further Education Commission New South Wales VET Cost per Student Hour The table below provides details of the volume of vocational education and training hours delivered in New South Wales from training providers in receipt of Government funding Government expenditure per student hour has decreased by 18.1 per cent since 2004 The Commission has advised that over this period Government funded student enrolments in New South Wales increased by 10.2 per cent and totalled 429,181 in 2008 Year ended 30 June Government recurrent expenditure* ($m) Student hours (million) Expenditure per student hour ($/hour) Change in expenditure per student hour since 2004 (%) 2004-2008 Change Increase/ (Decrease) 2008 2007 2006 2005 2004 (90.0) 14.2 1,363 112.1 1,397 108.8 1,429 105.8 1,434 106.7 1,453 97.9 (2.7) 12.2 12.8 13.5 13.4 14.9 (18.1) (18.1) (13.5) (9.1) (9.5) Source: National Centre for Vocational Education Research, 2004-08 Australian vocational education and training statistics – financial information Unpublished data from NCVER The costs noted in the table above have been adjusted to 2008 dollars to exclude the effect of inflation (unaudited) * Government Recurrent Expenditure is made up of: TAFE NSW (approx 82 per cent of total), VET programs within NSW DET, agricultural colleges and NSW Adult Migrant English Service OTHER INFORMATION We identified some minor opportunities for the Commission to improve internal controls and we have reported these to management We have reported the following matters to the Commission for the last two years:  the need to better manage the review and transfer of completed projects in capital works in progress to completed assets The balance of these projects totalled $91.1 million at 30 June 2009  the need to correctly identify land and buildings included in both the Department of Education and TAFE NSW’s financial reports The maximum value of properties potentially duplicated is approximately $12.8 million As the land and buildings date back in time, the Commission has deferred confirming the accuracy of their records until the 2010 financial year Maintenance Backlog TAFE NSW Institutes are given an overall budget by the Commission The Institutes determine a maintenance budget based on service priorities In accordance with the Government’s policy of total asset management, the Commission is developing a new methodology for future condition assessments This uses new software to identify and prioritise maintenance works by matching data collected with maintenance work programs It was anticipated that the new condition assessments would be completed by the end of 2008, but to date they have not been undertaken At 30 June 2009, maintenance backlog was estimated by management to be $37.6 million ($27.7 million in 2007-08) The backlog is not considered significant in the context of the estimated replacement value of TAFE NSW buildings of $3.0 billion This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 29 New South Wales Technical and Further Education Commission _ Workers’ Compensation Claims Year Ended 30 June 2009 Number of claims incurring cost Number of stress claims incurring cost Estimated cost for all workers compensation claims ($m) Estimated cost for stress claims ($m) Days lost - all injuries Days lost - stress claims 2008* 2007* 627 66 6.8 1.9 5,669 1,515 699 101 9.1 3.6 6,993 2,707 639 82 8.5 2.2 14,269 4,263 * Figures for prior years include data accumulated to date Therefore the total days lost and costs are higher for the earlier years due to the passage of more time Source: New South Wales Technical and Further Education Commission (unaudited) In 2008-09, the Commission had 15,962 (16,231) full time equivalent employees and there were 66 stress claims made, 34.7 per cent less than in 2007-08 The average cost per stress claim in 2008-09 was $28,971 ($35,947) compared to $10,766 ($13,015) for all types of injuries The number of workers’ compensation claims has decreased by 10.3 per cent since 2007-08 and there has been a 25.3 per cent reduction in the estimated cost of the claims The Commission has advised the improvement was due in part to a reduction in the number of claims incurred along with a reduction in the average duration of time lost The Commission attributes these reductions to the successful implementation of programs and initiatives under its safe working and learning strategy, which targets improvements in injury prevention, return to work and claims management outcomes Workers’ Compensation Premiums Benchmark Year ended 30 June 2010+ 2009 Equivalent full time employees (EFT)*** Premium cost ($m) Benchmark* ($m) Excess** ($m) 15,962 15.2 14.4 0.8 15,962 16.2 15.0 1.2 * ** *** + 2008 2007 16,231 16.8 14.5 2.3 16,037 18.2 14.8 3.4 Benchmark paid by The Treasury Excess paid by TAFE NSW EFT numbers as specified in the Commission’s Workers’ Compensation Declarations Estimates for 2010 The Treasury sets a benchmark for agencies that determines the level of funding provided for workers’ compensation premiums If an agency’s premiums exceed the benchmark, the agency needs to fund the excess This offers a financial incentive for agencies to actively manage their workers’ compensation costs and minimise workplace injuries The Commission has advised that there has been a $2.6 million reduction (76 per cent) in the short fall payable by the Commission over the last four premium renewal periods as a result of improved claims management This has also led to a $1.0 million reduction (6.2 per cent) in the deposit premium for the 2009-10 period This is trial version www.adultpdf.com 30 _Auditor-General’s Report to Parliament 2009 Volume Nine _ New South Wales Technical and Further Education Commission Overtime Overtime costs decreased two per cent in 2008-09 Year ended 30 June Overtime ($m) Salaries ($m) Overtime as % of salary 2009 2008 2007 2006 28.8 1009.7 2.9 29.4 1,002.1 3.0 29.3 987.1 3.0 27.3 951.3 2.9 As shown in the table below, 157 (156) non-teaching TAFE NSW employees earn 20 per cent or more of their gross salary in overtime Overtime to Base Salary % Number of Non-Teaching Employees 2009 71 – 61 – 51 – 41 – 31 – 21 – 10 – 0> Nil 100 70 60 50 40 30 20 10 2008 22 54 77 169 1,798 3,763 5,887 Total -5 18 45 87 169 1,854 3,461 5,640 For four employees overtime was more than 50 per cent of their base salary compared to six in the prior year Overtime worked by non-teaching staff is paid at penalty rates, which is a relatively expensive way of obtaining more resources Employee Employee Employee Employee Employee Annual Overtime $ Base Salary $ Annual Gross $ 23,225 21,507 20,827 21,225 39,666 40,465 39,666 42,317 Overtime to Base Salary % 64,317 69,997 61,760 69,756 58.6 53.2 52.5 50.2 The Commission has previously advised that high levels of overtime may be paid because:  overtime paid was for services that needed to be performed and that overtime was the cheapest alternative for providing the required services  the cost of some overtime has been built into the budget for commercial activities  of industrial action and other circumstances beyond the control of the Commission  TAFE NSW operating hours are from 6.00am to 10.00pm, Monday to Saturday, therefore some overtime is unavoidable This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 31 New South Wales Technical and Further Education Commission _ FINANCIAL INFORMATION Abridged Consolidated Operating Statement Year ended 30 June Consolidated Parent 2009 $’000 2008 $’000 944,255 343,344 307,779 78,072 901,141 330,845 303,384 75,675 -1,232,114 307,779 78,072 -1,188,636 303,384 75,675 TOTAL EXPENSES 1,673,450 1,611,045 1,617,965 1,567,695 TOTAL REVENUE 396,026 380,560 396,313 380,556 Employee related Personnel services Other operating expenses Depreciation and amortisation Other gains/(losses) 16 (1,706) 2009 $’000 2008 $’000 16 (1,706) NET COST OF SERVICES 1,277,408 1,232,191 1,221,636 1,188,845 Government contributions 1,272,110 1,244,084 1,216,626 1,200,734 (DEFICIT)/SURPLUS (5,298) 11,893 (5,010) 11,889 The increase in revenue is attributable to the increase in student enrolment numbers, referred to previously Abridged Consolidated Balance Sheet At 30 June Consolidated Parent 2009 $’000 2008 $’000 2009 $’000 2008 $’000 Current assets Non-current assets 181,321 2,991,280 166,353 2,978,932 181,321 2,991,280 166,111 2,978,932 TOTAL ASSETS 3,172,601 3,145,285 3,172,601 3,145,043 Current liabilities Non-current liabilities 212,669 842 180,210 687 213,511 180,943 TOTAL LIABILITIES 213,511 180,897 213,511 180,943 2,959,090 2,964,388 2,959,090 2,964,100 NET ASSETS This is trial version www.adultpdf.com 32 _Auditor-General’s Report to Parliament 2009 Volume Nine _ New South Wales Technical and Further Education Commission The increase in current liabilities of $32.5 million was predominately due to:  a rise in personnel services payable the to the Department of Education and Training of $5.5 million  an increase in unearned revenue of $12.1 million due to new programs and increased commercial activity domestically and overseas  a $9.9 million increase in accrued salaries and wages COMMISSION ACTIVITIES The Commission, more commonly known as TAFE NSW, was constituted by the Technical and Further Education Commission Act 1990 as a statutory body corporate Its principal objective is to provide relevant technical and further education services to industry, students and other client groups The Commission provides vocational and pre-vocational education and training services through its ten Institutes and the Open Training and Education Network (OTEN) While the Institutes and OTEN observe Commission policies and priorities, they develop their own education and training profiles and manage their own operations Since December 1997, the Commission has been a controlled entity of the Department of Education and Training The Commission is subject to the control and direction of the Minister for Education and Training For further information on the Commission, refer to www.tafensw.edu.au The four Metropolitan Institutes are Northern Sydney, South Western, Sydney and Western Sydney The six Country Institutes are Hunter, Illawarra, New England, North Coast, Riverina and Western CONTROLLED ENTITIES The following controlled entities have not been reported separately on as they are not considered material by their size or the nature of their operations to the consolidated entity A.C.N 093 230 374 Pty Limited The company ceased trading and was wound up on 15 November 2008 New South Wales Technical and Further Education Commission Division The Division provides personnel services to the Commission This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 33 Office of the Board of Studies AUDIT OPINION The audit of the Office’s financial report for the year ended 30 June 2009 resulted in an unqualified Independent Auditor’s Report FINANCIAL INFORMATION Abridged Operating Statement Year ended 30 June 2009 $’000 2008 $’000 Sales of goods and services Grant and contributions Other 6,209 955 445 6,829 980 544 TOTAL REVENUE 7,609 8,353 80,208 23,781 1,954 80,243 23,522 1,483 105,943 105,248 NET COST OF SERVICES 98,334 96,895 Government contributions 98,351 97,694 17 799 Employee Related expenses Other operating expenses Depreciation and amortisation TOTAL EXPENSES SURPLUS The fall in other revenue is due primarily to a decrease in interest earned on cash balances Depreciation and amortisation rose due to increased asset purchases during the year This is trial version www.adultpdf.com 34 _Auditor-General’s Report to Parliament 2009 Volume Nine _ Office of the Board of Studies Abridged Balance Sheet At 30 June 2009 $’000 Current assets Non-current assets 2008 $’000 6,873 8,141 7,331 7,186 15,014 14,517 Current liabilities Non-current liabilities 5,710 247 4,978 499 TOTAL LIABILITIES 5,957 5,477 NET ASSETS 9,057 9,040 TOTAL ASSETS The increase in non-current assets was due predominantly to the acquisition of leasehold improvements of approximately $959,000, plant and equipment of $1.6 million and intangible assets of $421,000 The decrease in non-current liabilities was due to a reduction in the provision for restoration costs Abridged Service Group Information Office of the Board of Studies net cost of services on a service group basis is detailed below: Year ended 30 June Net Cost of Services Net Assets 2009 Budget * $’000 2009 Actual $’000 2008 Actual $’000 2009 Actual $’000 2008 Actual $’000 Curriculum Development and Support Examinations Assessments and Credentialing Registration and Accreditation Not Attributable ** 9,071 8,322 8,462 1,251 660 86,569 3,420 86,755 3,513 (256) 85,385 3,349 (301) 4,376 (127) 3,557 4,089 (126) 4,417 Total all service groups 99,060 98,334 96,895 9,057 9,040 * Per the New South Wales 2008-09 Budget Papers ** Represents items that could not be reliably allocated to a ‘service group’ This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 35 Office of the Board of Studies _ OFFICE ACTIVITIES The Office is responsible for developing and delivering professional and administrative services to the Minister for Education and Training, the Board of Studies and its committees This includes developing and supporting New South Wales curriculum, registering and accrediting non-government schools, registering home schooling, and assessing and examining students for the New South Wales School Certificate and Higher School Certificate (HSC) The Office carries out functions delegated to it by the Board of Studies, including employing staff to run the HSC The Office bears the cost of carrying out those functions and does not charge the Board for those services The Office also includes the Australian Music Examinations Board (NSW) and the Aboriginal Education Consultative Group The Office is a department under the Public Sector Employment and Management Act 2002 For further information on www.boardofstudies.nsw.edu.au the Office of the Board of Studies, This is trial version www.adultpdf.com refer to 36 _Auditor-General’s Report to Parliament 2009 Volume Nine Minister for Gaming and Racing *Greyhound and Harness Racing Regulatory Authority Refer to Appendix for: Casino, Liquor and Gaming Control Authority *Responsible Gambling Fund * The audit was incomplete at the time of compiling this Volume The comment will be included in a later 2009 Volume This is trial version www.adultpdf.com 37 This is trial version www.adultpdf.com ... www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 33 Office of the Board of Studies AUDIT OPINION The audit of the Office’s financial report for the... www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 31 New South Wales Technical and Further Education Commission _ FINANCIAL INFORMATION... TAFE NSW buildings of $3.0 billion This is trial version www.adultpdf.com Auditor-General’s Report to Parliament 2009 Volume Nine 29 New South Wales Technical and Further Education