Western Australia’s Auditor General has warned the Department of Local Government Sport and Cultural Industries could be susceptible to financial fraud.
Western Australia’s Auditor General has warned the Department of Local Government Sport and Cultural Industries could be susceptible to financial fraud, a day after a senior public servant at the Department of Communities was charged with corruptly obtaining $2.5 million from the agency.
Auditor General Caroline Spencer today released a report on financial audits of WA’s state government entities, identifying three agencies with serious deficiencies requiring a qualified opinion on financial statements.
Of those three agencies, the Department of Local Government Sport and Cultural Industries was singled out for having significant weaknesses in its computer controls that could result in inappropriate and unauthorised access to its financial system.
“This access could be used to override management controls preventing fictitious or fraudulent transactions and could undermine the integrity of data,” the report said.
“However, our audit testing did not detect any inappropriate or fraudulent transactions.”
The warning follows Department of Communities assistant director general Paul Whyte being charged with two counts of official corruption after he and an associate manufactured false invoices to misappropriate $2.5 million of Housing Authority funds over a two year period.
Premier Mark McGowan has ordered an independent review of the Housing Authority (part of the Department of Communities) following the charges.
Other serious deficiency concerns raised in the Auditor General’s report included inadequate controls over rate changes and discounts at the Rottnest Island Authority, and overstated liabilities and understated earnings at the Western Australian Greyhound Racing Association.
Overall, the number of entities with serious deficiencies in their financial statements reduced from six in 2018 to three this year, and while acknowledging the improvement, Ms Spencer said that it remained a concern that audit findings reported in prior years were yet to be addressed.
The Office of the Auditor General issued audit opinions for 137 state government agencies, with 323 financial management control weaknesses reported to entities in 2018-19, an increase from 300 in 2017-18.
The report said 36 of those weaknesses were considered to be significant, while 65 control weaknesses at 22 entities identified in 2017-18 were yet to be resolved.
The four main areas of control weaknesses were in expenditure, payroll and human resources, governance, and assets.
