Our annual report summarises our performance, operations and business highlights for 2022–23. It contains our financial statements, including the opinion of the independent external auditor. It complies with the Financial Accountability Act 2009, Financial and Performance Management Standard 2019, and the detailed requirements set out in the Annual report requirements for Queensland Government agencies. We also recognise the skills and talent of our people as we look forward to the year ahead.
It has been my privilege to lead the Queensland Audit Office (QAO) over the past 6 years, with this annual report being my last before my tenure ends in July 2024. There is much to reflect on. First and foremost, I thank our people in all roles, including our contracted audit service providers, for their outstanding support and unyielding commitment. I have been proud to work with such highly skilled experts in their field, who care deeply about bettering public services for Queenslanders.
The COVID-19 pandemic ran from 29 January 2020 to 31 October 2022 – almost 3 years of my term. Changes to how people work had a profound impact on all organisations, and I pay tribute to our staff for their exemplary diligence. They continually adapted to uncertainty to deliver high-quality client services. When the first lockdown was concluding in mid-2020, we quickly moved to a hybrid operating model with 3 workplaces: QAO’s office; client offices; and home. This operating model continues successfully to this day.
Our relationships have been at the core of our strategy. I joined QAO knowing we were more likely to influence performance improvement if we understood the unique environments that the diverse public sector and local government entities work in. This led me to meeting with 695 clients and stakeholders throughout Queensland, including in-person meetings with 66 of the state’s 77 councils. I appreciate the time these dedicated Queenslanders took to meet with me and share feedback.
Supporting parliament is imperative for us achieving our vision of better public services – by meeting its needs, we better meet those of the public. Parliamentary committee scrutiny of entity performance is particularly important in Queensland, given the state’s unicameral system of government. Over the years, we have examined how we engage with committees, including implementing new ways of providing deeper and timelier advice, such as via our status of recommendations report and interactive dashboard. Since July 2017, I have provided 355 recommendations for service improvement across 101 reports to parliament.
In operating as ‘OneQAO’, we aimed to deliver more consistent services to our clients. We have shared our knowledge across our office, and with industry and our peers, ultimately increasing our collective capability. How we plan our audit program is one example. We analysed the insights we gathered from our work across all our clients to identify strategic risk, and responded to matters that have long-term implications for Queenslanders. We have also shared better practice for all entities via our blogs, fact sheets, guides, and events. The value of our services has been recognised in our independent surveys, where we have continued to build on high satisfaction scores from members of parliament, our audit clients, and audit committee chairs.
The role of Auditor-General and our office must remain relevant, meaning we must continuously evolve and look for ways to improve. We launched initiatives to keep pace with technological and industry developments, such as updating our audit software and methodologies. I highlight our data analytics project, which is affording greater efficiencies for our staff and rich insights for our clients and the community.
Upholding our values and ethical and quality standards is ingrained in how we operate, and we make our expectations clear to our people, including our audit service providers. This year, we responded to recent issues related to integrity and ethics in the accounting profession by reviewing our procurement and contracting arrangements and reminding providers about requirements under the Auditor-General Act 2009 and our policies.
Over time, the state’s audit office has fought for strengthened independence. Changes started 36 years ago, when the 1987 Fitzgerald Inquiry investigated the activities of ministers and members of the police service. This led to the Electoral and Administrative Review Commission (EARC), which, among other matters, looked at public sector auditing arrangements. Both inquiries and their outcomes played a pivotal role in shaping the subsequent direction of our office, with the Department of the Auditor-General becoming the Queensland Audit Office in 1993.
Subsequent strategic reviews of QAO, and Professor Coaldrake’s 2022 review, recommended our independence be enhanced and better protected from possible influence from government. We await further, crucial action following tabling of the Integrity and Other Legislation Amendment Bill 2023 in parliament in June. I look forward to the full and timely implementation of Professor Coaldrake’s recommendations.
There are too many personal highlights to capture here. In March 2023, I was honoured to be the first Auditor‑General made an officer of the parliament in our 162-year history. It was fitting in recognition of the efforts of all auditors-general over many years in promoting and safeguarding the public’s interest.
I now look forward to what the future holds for our people and for the office’s services to Queensland. Thank you to our staff, clients, and stakeholders, past and present, for placing your trust in me.
Report on a page
Our service delivery and engagement
Our financial performance
The impact from our work
1. Our services to Queensland
The Auditor-General, supported by QAO, is parliament’s independent auditor of all Queensland’s state and local government public sector entities. QAO is respected as one of Queensland’s integrity bodies.
The Auditor-General Act 2009 (the Act) provides the legal basis for QAO’s access to information and the freedom to report the findings from our audits. The Act promotes the independence of the Auditor‑General and our auditors.
On 1 March 2023, the Queensland Auditor-General became an officer of the parliament for the first time in our 162-year history.
Our purpose is independent, valued assurance and insights.
Our vision is for better public services.
To achieve this, we:
|Outcomes from our work||
Our services are centred on the positive outcomes we can achieve and the impact we can have on the delivery of public services for Queensland.
The outcomes we aim for are:
Strategic plan 2021–2025
Our strategic plan, revised annually, aligns our services with how we work together as one team towards our vision and purpose. The plan is informed by our operational and workforce planning, our forward work plan, and our service delivery statement (SDS), which provides budgeted financial and non-financial information and establishes targets for our performance. The plan reflects the strategic risks that may prevent us achieving our objectives and we discuss how we address our risks throughout this annual report.
Vision: Better public services
Purpose: Independent, valued assurance and insights
Who we serve: Queenslanders, through parliament, public sector entities, and local governments.
|Objectives||Strategic risks||Strategies||Indicators of achievement|
|We support and inspire our people, which includes our contracted audit service providers, to best serve parliament and our clients.||We do not attract and retain the right people who uphold our values and our ethical and quality standards.||Attract and retain our people, to meet parliament and our clients’ assurance expectations.||Our people are capable, uphold our standards, and feel respected and valued.|
|Those we serve trust and value our independent services and insights.||We do not maintain valued relationships nor adapt our services to meet changing needs.||Build trust in our relationships through listening and tailoring our response.||Our relationships and independence are valued.|
|We use contemporary auditing practices to deliver independent services that are used to improve accountability and performance.||We do not sufficiently use our technology to better understand our clients and deliver services that are valued.||Using data driven solutions to enhance our assurance, and insights to provide greater value.||Parliament and our clients benefit from our independent assurance services and the insights we provide.|
How we manage risk
QAO’s risk management framework sets out our risk appetite and tolerance, and how we measure our risk culture. Our approach is supported by policy, various procedures and guidelines, and regular reporting against risk registers. Our approach reflects the key steps in the international standard: ISO 31000:2018.
QAO promotes an open, positive, and proactive approach to managing risk. We consider both threats and opportunities as part of our annual and operational planning, and actively manage them. We assess our risks at the strategic level, as described in our strategic plan, and at the operational level. The potential causes of operational risk for QAO include:
- risks to the quality of our audit services, such as disruption to our services, capacity of our workforce, or our use of the right audit tools
- risks to data governance, such as security of the data we use for our audits and our use of the right technology
- risks for our people and safety, such as our staff being hurt or exposed to unsafe work practices
- business risks, such as non-compliance with legislative or professional requirements.
The Auditor-General is accountable for risk management at QAO. Our entire workforce, including our audit service providers, are responsible for identifying, assessing, and managing risk. The ongoing risk conversations we hold with our people improve our ability to respond quickly and appropriately. Responsibility for promoting effective risk governance is shared between the Head of Internal Audit and the Chief Financial Officer (Assistant Auditor-General – Audit Practice).
An overview of our relationships
Our clients are all of Queensland’s state and local government entities, which we audit each year. This includes all departments, government owned corporations, statutory bodies, controlled entities, and the state’s 77 councils. Through our audit work and day-to-day engagement, we give them performance advice about issues they may not be able to see themselves. We continuously seek to understand the challenges they face and the unique environments they operate in.
Queensland Parliament is our client, as we provide it with independent assurance over public sector performance. It provides our office with appropriation to report on the results of our audits and to support it in its scrutiny and oversight. Parliamentarians provide input into our selection of audit topics as they reflect on, or represent, matters the public is interested in.
Chapter 3 of this annual report provides detail on our service delivery for our audit clients and parliament.
Our relationships across industry and with our peers provide avenues for sharing best practice and learning.
The Auditor-General is a member of the Australasian Council of Auditors-General (ACAG), alongside other Australian offices, New Zealand, Papua New Guinea, and Fiji. ACAG’s objective is to strengthen public sector audit in Australasia through leadership, collaboration, and advocacy. We work closely with it through committee meetings, discussion papers, by contributing to audit standard-setting boards, and through annual benchmarking and peer reviews. We share insights from how we do our work, such as our data analytics project.
The Queensland community is the reason for our service. From our selection of audit topics to striving towards our vision of better public services, we aim to improve the services they use. We engage with community and interest groups during our audit work, and we welcome contributions to our audits.
By using plain language in our reports to parliament and providing user‑focused interactive dashboards, we aim to make our insights easy to understand and engaging.
We also engage internationally with audit offices to share knowledge. This year, QAO’s Auditor-General had the honour of attending the Canadian Council of Legislative Auditors (CCOLA) Performance Audit Symposium in Toronto, where Auditors-General from around the globe discussed comparable matters facing public service delivery. QAO’s Auditor-General shared insights from our health-related audits as a panel presenter.
We regularly engage with other Queensland integrity bodies as relevant to our investigations and permissible under legislation.
We contribute to work programs or sit on project advisory boards for the Australian Accounting Standards Board (AASB) and Auditing and Assurance Standards Board (AuASB). We liaise on a range of matters that impact our public sector clients and the audit profession, for example, on valuing infrastructure or managing audit quality. Queensland Treasury has a key role in guiding whole‑of‑government accounting matters, so we also work closely with it to clarify and provide advice.
We are actively involved in the work of the professional accounting bodies in Australia: CPA Australia, and Chartered Accountants Australia (CAA) and New Zealand (CA ANZ). Our audit staff obtain professional qualifications and attend or present at these bodies’ knowledge-sharing and learning and development events.
We have a strong relationship with the Local Government Finance Professionals (LGFP) association. We often work with the LGFP on developing guidelines for local governments, alongside the Department of State Development, Infrastructure, Local Government and Planning. We also work with the LGFP on accounting papers and deliver presentations at its sector conferences in support of shared aims for performance improvement and collaboration.
2. How we managed, developed, and engaged our workforce
Objective: We support and inspire our people, including our contracted audit service providers, to best serve parliament and our clients.
Risk: We do not attract, grow, and retain the right people to uphold our values, and ethical and quality standards.
Indicators of achievement: Our people are capable, engaged and valued.
Our OneQAO team
We aim to represent the community we serve, and greatly value the diverse perspectives and experiences that our people bring to our workplace. By seeking diversity, we benefit from a broader range of skills, increased productivity, smart decision-making, engaged teams, and, overall, an enjoyable place to work.
Our workforce comprises 182.25 full-time equivalent employees, with 29 per cent who are culturally and linguistically diverse. Fifty-five per cent are women – and 32 per cent of them are in leadership roles. Three per cent of our people identify as having a disability. We represent a wide range of age demographics, and our staff bring broad work and life experiences to our team. As at 30 June 2023, our number of full-time employees includes 7 staff who are on paid long-term leave.
Our graduate program remains a key source of talent for our future workforce, as we welcomed 15 graduates and 4 undergraduates from across Australia to our team.
Our contracted audit service providers are a key part of our workforce. They help us to efficiently deliver our audit services across Queensland, particularly in more regional or remote areas, where they have local knowledge or can more easily travel. This year, 15 audit service providers supported us in delivering 42 per cent of our audit opinions.
Our OneQAO approach means we view our workforce as one team – we deliver our client services seamlessly and consistently, support each other, and share expertise.
For International Women’s Day, John C., Senior Manager, shared his thoughts on this year’s theme of #EmbraceEquity:
‘Through equity we can achieve equality. Every day at QAO we are supporting and lifting women up, fostering an environment that develops the careers of women. By creating an environment that listens to and respects each other, we can all #EmbraceEquity.’
Gabby O., Audit Manager, also shared with us:
‘IWD is an important day – it reminds us to stop and reflect on how we achieve equity in the workplace as women. Equity in the workplace for me means recognising everyone is on a different path and supporting each other to achieve the goals we set for ourselves. It’s about talking, connecting, and championing each other.’
A values-driven culture
Our organisational values lay the foundation for what we most care about and provide a common way of working with our clients and each other.
Our values in action
Each year, we recognise our staff who demonstrate our values and our OneQAO approach of delivering valued services for our clients. Our 2022 awardees were recognised for their teamwork, leadership, client engagement, and contributions to major QAO projects or initiatives. Our OneQAO award is our pinnacle award, where staff of all levels are invited to nominate their colleagues. This year, we had 2 award winners: Lara B. and James J.
Lara B., Manager, embraced all of QAO’s values – particularly in developing junior teammates and consistently delivering a high standard of work and engagement on complex audits. She continually coached staff through regular feedback and on-the-job training, proactively contributing to QAO’s learning and development efforts.
James J., Chief Information and Technology Officer, delivered effective and timely client and stakeholder engagement, and significantly contributed to QAO projects on top of his day-to-day tasks. He played a lead role in QAO initiatives on improving business efficiencies, automating processes, and identifying and implementing innovative technology. James was commended in multiple nominations for his optimistic approach.
We are exploring ways to embed and promote our values and recognise staff who demonstrate them throughout the year, in addition to our special, annual award.
Understanding our people
Each year, we participate in the annual Working for Queensland survey. It provides us with important information on how engaged our people are, how they view our leadership, and how satisfied they are with their jobs. It is a platform for employees to share their views, and the results inform how we can best lead and manage our workforce.
The last survey ran in September 2022, with 76 per cent of staff responding (2021–22: 75 per cent). While we are an integrity body and independent of government, the survey allows us to compare our results to the average scores for the Queensland public sector.
We were pleased to find that 83 per cent of our people who responded to the survey acknowledged the positive impact our work has for Queensland, which is 4 percentile points above the public sector. Seventy‑four per cent also said their job gives them a feeling of accomplishment, 5 points above the average for the public sector.
Ninety per cent said they understand how their work contributes to QAO’s strategic objectives, compared to 82 per cent in the public sector. We were proud to hear that 89 per cent believe their manager demonstrates honesty and integrity, 9 points above the public sector average. We, of course, aim to reach 100 per cent for this question.
While workloads have been demanding this past year, the survey results tell us we remained cohesive and resilient. Eighty per cent agreed that their teams come together to work effectively, manage workloads fairly, discuss challenges, and share learnings. Staff also appreciated flexible work arrangements, with 86 per cent enjoying the ability to better manage their work–life balance.
We received 63 per cent for overall employee engagement, which was 6 points above the public sector average but down from our 74 per cent in 2021–22. Sixty-three per cent told us that they were confident in discussing their wellbeing with their manager, however, of which only 48 per cent agreed they would be confident discussing mental health matters. A concerning 28 per cent of staff indicated that they feel burned out by their work.
The survey allows for some organisation-specific questions, and, in line with our strategy, we sought to understand how invested staff are in our client relationships. We were pleased to find that 93 per cent said they understand the value that QAO delivers.
Survey feedback, and a follow-up forum we held with staff on the results, guided the activities we are implementing for developing, managing, and looking after our staff. We are committed to improving our results, to ensure our staff feel engaged, proud, and healthy.
Looking after our people
To deliver high quality and timely services, we need auditors with the right skills and qualifications. Our people are our most valuable resource, so we must ensure they feel supported and fulfilled, are challenged to learn new skills, and feel connected to their teammates.
Our ability to resource our audits in a way that provides consistent and valued client service delivery, without compromising health and wellbeing, is impacted by industry-wide recruitment and retention challenges. We continue to face market demand and a reduced pool of suitable candidates for professional audit positions; we are competing with private sector firms, which offer competitive remuneration.
We have focused on how we manage our resourcing (that is, how we assign staff to audits and structure our teams), so we can offer outstanding development opportunities, operate efficiently, and attract new staff. We began a refresh of our internal resourcing strategy to create a model where we can provide more consistency for our clients and share skills across our business. In the coming year, staff will be allocated to teams that best support high-quality client experiences, and promote professional development needs.
This year, we further developed how we address the risk of psychosocial hazards at work, and applied the guidance provided by a new code of practice (which falls under the Work Health and Safety Act 2011). Managing psychosocial risk is just as important as managing physical risk in the workplace. So far, we have implemented a range of coordinated activities to prevent harm, such as:
- continuing our mandatory mental health training for all staff
- participating in Queensland’s mental health week and RU OK Day
- offering coaching sessions on time management, work/life balance, and building resilience
- closing our office for the holiday period in December to mid-January so staff can more easily take leave
- offering all staff a voucher to put towards health pursuits, such as flu vaccinations or gym memberships
- providing a reflection room staff can use for religious purposes or meditation
- providing fresh fruit for our staff to encourage healthy eating
- supporting staff participation in Queensland’s Corporate Games sporting event.
We have prepared a formal wellbeing framework for 2023–24, which is grounded in 8 dimensions that affect overall quality of life: occupational, social, physical, financial, spiritual, emotional, environmental, and intellectual. Just some of the new actions QAO will implement include: setting up a chat group for staff on long‑term leave, sharing financial-related advice, promoting the use of meditation or mindfulness apps, offering training sessions on emotional intelligence, and providing more social activities, such as a book exchange café.
Life at QAO
A sense of connection is critical for building a productive and happy workplace. Connected teams nurture enduring working relationships and promote knowledge-sharing.
This year, we commenced a program of employee engagement initiatives designed for our hybrid working environment. While staff enjoy the flexibility of work locations that include client sites, QAO’s main office, and home, we know we must adapt to facilitate effective ‘whole-of-office’ interactions.
Five to six times per year, all our people are asked to come into QAO’s main office on the same day for presentations from senior staff, a morning or afternoon tea, and social or team building activities. We also hold bi-monthly ‘catch-up days’ where staff are allocated time to complete outstanding tasks.
Every Friday, a member of our Executive Management Group (EMG) sends all our staff an email. It summarises office milestones and the achievement of major deliverables, welcomes new starters, shares feedback from clients and stakeholders, and acknowledges our peoples’ professional and personal achievements. This helps them keep across strategic matters and fosters a sense of connection across the OneQAO team.
As a whole office, we celebrate Multicultural Queensland Month, where our people are invited to bring in and share food that reflects their background, culture, or favourite food. We also share information on our ‘Celebrate us’ intranet page about various gender and cultural events throughout the year.
In the spirit of community connection, in 2022 we launched our Giving Day initiative, where we support a range of charities, events, or special days, and allow staff to use one day of their work hours to participate. So far, we have joined the MS Moonlight Walk, and provided donation boxes in our office for the Share the Dignity campaign and the Bread Tags for Wheelchairs campaign. QAO is also pleased to support those employees who contribute to the community through their Australian Defence Force reserve service.
International experiences for our staff
One special opportunity we began this year is providing secondment arrangements with international audit offices. These experiences allow offices to share knowledge and resources during peak audit periods.
This year, 4 QAO auditors spent 4 weeks working for Audit New Zealand. They shared knowledge and skills from their work at QAO and gained experience in new methodologies and audit procedures. Two of our secondees, Eliza B. and Khendie M., told us:
‘Collaborating with the office and sharing information on what we do in Queensland was immensely interesting, and it felt really rewarding to see our presence have a positive impact in helping New Zealand deliver its audit jobs on time.’
This opportunity allowed our secondees to further develop their communication, teamwork, and relationship management skills, while gaining international audit and business experience. Our other 2 secondees, Rachel S. and Nick D., said:
‘Between QAO and Audit New Zealand, there was a willingness to transfer skills and share learnings to develop knowledge, which we both embraced and benefitted from. Our exposure to working on different procedures within a different reporting environment gave us valuable insights and skills that we could bring back to QAO.’
All our secondees also made the most of their time in New Zealand to travel and explore the country.
In May, we were delighted to welcome 2 auditors from New Zealand, who joined our office for 4 weeks. We thank them for their contribution and efforts. Our secondee Fariq. S told us:
‘What I enjoyed most at QAO is how accommodating the people I worked with have been – it has made the transition in working at QAO very smooth and I received guidance where needed. The data analytic tools that QAO has employed is something we need to learn from you – a lot of efficiencies can be achieved through these!’
Learning and development
Staff are more likely to feel engaged when we help them achieve their career goals and encourage them to suggest new ideas. We greatly value professional audit qualifications, which are a requirement for our audit staff as they progress their careers. We fund staff to obtain their CA or CPA designations or their Certified Information Systems Auditor (CISA) qualification. These programs entail a gruelling body of work, and this year we are pleased to report that 10 QAO team members were awarded their qualifications. Overall, QAO has 134 staff (79 per cent) who hold or are currently studying towards professional audit qualifications. We also support staff to undertake other studies, such as the Australian Institute of Company Directors.
This year, we continued implementing the recommendations from a 2022 external review of QAO’s learning and development approach. We aimed to strengthen our learning culture based on our values and OneQAO way of working. Key to this was developing a ‘communication for success’ program, which helps managers deliver effective coaching on-the-job.
Staff continued to have the option of participating in individual training opportunities, and our auditors completed their annual technical training in November 2022 and June 2023. Being responsive to any knowledge gaps contributed to greater compliance with professional standards across QAO.
In addition to technical training, we provided courses on our audit tools, quality of files, clear communication, and knowledge from performance audits. We also provided training pertinent to our peoples’ levels of experience, such as critical thinking for our auditors, leadership for our audit seniors, and how to approach difficult conversations for our managers and directors. We also held training for staff working on audits related to public service delivery for First Nations people.
Short, focused, knowledge-sharing sessions that we call ‘lunchbox sessions’ were an effective way for us to share ideas across our organisation and with our peers. QAO held over 10 lunchbox sessions for our staff, including 3 for our colleagues at other audit offices, via the Australasian Council of Auditors-General.
Noting the results in our Working for Queensland survey, and our desire to ensure our people feel safe and well, all staff are currently enrolled in a course on supporting mental health in the workplace. As at 30 June 2023, over 90 staff have attended.
Outcomes-focused performance development
Performance reviews are a key way for us to identify growth opportunities, recognise individual achievements, and understand our collective capability against our business needs. Reviews also facilitate stronger relationships between staff and their managers. We are in the process of updating our performance management program, based on input from staff. We will introduce more 2-way feedback avenues and issue more guidance on how to conduct effective reviews.
We also encourage ongoing dialogue between staff and their managers day-to-day, outside of the formal review process, to clarify expectations, boost job satisfaction, and build confidence.
30 years of the modern Queensland Audit Office
This year we celebrated a special milestone – 30 years since the creation of today’s Queensland Audit Office. The position of Auditor-General has existed in Queensland for over 160 years, but following significant legislative change on 1 May 1993, we shifted from being the Department of the Auditor-General to the Queensland Audit Office.
The change resulted from the 1987 Fitzgerald Inquiry, which examined allegations of misconduct and corruption involving ministers and members of the Queensland Police Service. The inquiry also looked at the role of the Auditor-General in increasing accountability and transparency in government. This led to the establishment of the Electoral and Administrative Review Commission which made recommendations around strengthening our independence.
In 2023, we marked this significant event by giving staff a thank you card, and we set up a display of artefacts (such as the first audit report from 1860). One of our senior directors with a passion for history, Paul C., prepared a blog post on what the changes meant for our role and services.
Some of our staff who were employed at the office in 1993 provided thoughts on the changes.
Dale H., Director, said that transformation has been continuous throughout his time at QAO, with notable changes including the travel methods used to see clients throughout Queensland, how we engage contracted audit service providers, and the audit systems and methodologies we use. In terms of what has stayed the same, he said:
‘One area of great continuity is our client base and our shared value of better public services. This isn’t to say our client base hasn’t changed – for example, local government came into our mandate in 1994. Our staff continue to put into practice what we preach. Our close relationships with our audit clients continue to be strong.’
Dave A., Senior Director, had been at the office for 4 years in 1993 and recalls that the changes to our mandate put our office on par with other Australian audit jurisdictions and increased the public’s awareness of our role. He is grateful for the wisdom of his mentors over the years.
‘The variety of people I have met and the lifetime relationships I’ve formed through the Queensland Audit Office are why this place (and this QAO family) mean a lot to me. From 1993 to 2023, our core aim to deliver better public services has been consistent and is at the heart of what I have been inspired to deliver to clients, the Queensland Parliament, and particularly my teammates at QAO.’
Kaylene C., Senior Manager, remembers a sense of positivity surrounding where the office was heading, as well as how welcome she was made to feel. She shared:
‘The term QAO family is bantered around a lot, but it is true. When I moved to Brisbane for work I did not know many people here, but I made lifelong friends throughout the office. People were always willing to listen and share their stories, and of course always help with any work questions. QAO being a family is our point of difference and I hope that never changes.’
The legislative amendments 30 years ago were more than just a new name and new powers. The change significantly reshaped our office’s structure and brought a more modern and professional approach to conducting audits. In 2023, we now embark on further, positive change for our office through changes to the Auditor-General Act 2009 and via the Integrity and Other Legislation Amendment Bill 2022.
In memoriam – vale Vincent C Doyle, former Auditor-General
In June 2023, we were saddened to hear of the passing of former Auditor-General, Vincent C Doyle. Vince is recognised for his distinguished 40-year career of service to Queensland. As Auditor-General from 1984– 1989, Vince, among other achievements, delivered the audit office’s first annual report in 1988. The report imparted more background on the role of the office, in response to the 1987 Fitzgerald Inquiry. Vince had already taken steps to improve parliament’s and the public’s understanding of the Auditor-General’s charter, and this first annual report provided further transparency around the office’s operations. Some of our current-day staff served with Vince as graduates or new starters, and as today’s QAO, we send our condolences to Vince’s family and friends.
Changes to how we employ our staff
Since the Electoral and Administrative Review Commission report of 1991, various reviews of QAO have recognised the need for the Auditor-General to have more control over the audit office’s resourcing – which includes its finances and human resources.
In 2013, QAO’s submission to a 2013 Finance and Administration Committee Inquiry identified further opportunities to strengthen our independence by providing greater financial and administrative autonomy from the Executive Government. This was echoed by the most recent strategic review of QAO in 2017, and by Professor Coaldrake’s 2022 report on culture and accountability in the public sector.
Seeking independence in our employment is not unique to QAO. The International Organisation of Supreme Audit Institutions (INTOSAI) identifies it as a key principle of independence, and it is sought by audit offices globally. The independence of Australian and New Zealand audit offices is regularly assessed against INTOSAI principles. In recent surveys, QAO’s independence has been ranked significantly lower than that of other jurisdictions such as the Office of the Auditor-General New Zealand and the Audit Office of New South Wales, which both employ staff directly. The benefits of direct employment include attracting qualified and experienced staff, retaining skilled staff, and supporting strategic workforce planning.
In November 2022, Queensland Parliament passed the Integrity and Other Legislation Amendment Act 2022, which amended the Auditor-General Act 2009. One of the primary amendments was enabling the Auditor-General to employ staff under the Auditor-General Act 2009, instead of the Public Sector Act 2022. This change will likely commence in December 2023.
While employment conditions will remain the same or very similar for most of our staff, this upcoming transition is significant. We have engaged closely with our people via a comprehensive change management initiative, including inclusive and collaborative consultation, and provided supporting materials, which we update regularly. We are sharing updates (as relevant) with our stakeholders and clients as the change progresses.
3. This year’s performance
Objectives: Those we serve trust and value our independent services and insights.
Risks: We do not maintain valued relationships nor adapt our services to meet changing needs.
Indicators of achievement: Our relationships and independence are valued.
How we measure our performance
QAO assesses its performance against its strategic and operational objectives, using a range of measures developed through corporate planning and budgeting processes. Performance targets are outlined in our service delivery statement (SDS), which provides budgeted financial and non-financial information for the financial year.
How we measure performance may be considered in the 2023 external review of QAO. We also benchmark our performance against the SDS targets of other Australian and New Zealand audit jurisdictions, and, when available, share the comparative results with our staff and stakeholders.
Overview of 2022–23 performance
Member of parliament satisfaction with our services
97 per cent – exceeding our target of 80 per cent, and up from 89 per cent in 2020–21
Number of audit opinions
Audit clients’ overall satisfaction with our services
83 index points for satisfaction – over our target of 80 per cent, and up from 82 points in 2021–22
Meeting audit committee chairs’ needs and expectations
98 per cent – on par with the prior 2021 survey
Number of reports to parliament
18 reports tabled, containing 82 recommendations
Average time to produce reports to parliament on the results of our financial audits
8.4 months – over our target of 6 months
Average time to produce reports to parliament for our performance audits
11.9 months – over our target of 9 months, and similar to the ACAG average of 11.4 months
Average life cycle costs of reports to parliament on the results of our financial audits
$151,000 – over our target of $130,000
Average life cycle cost of reports to parliament for our performance audits
$320,000 – under our target $395,000 and lower than the ACAG average of $404,239
Average cost per hour of work charged to our audits
$170.6. ACAG average – $187.79
Percentage of our total paid hours charged to audit work
55.8 per cent. ACAG average – 45.57 per cent
Number of parliamentary committee briefings
10 briefings on 14 reports to parliament
Number of requests for audits received
79 requests – assessed within an average of 25 days, improving on 31 days in 2021–22
Data analytics project milestones
Built 5 new tools to improve efficiency and insights
Views on our website of our reports to parliament
74,279 users (*not including our employees)
Views of our resources (blog, fact sheets, and better practice guides, including our maturity models)
30,658 users (*not including our employees)
Delivery of audit opinions and reports to parliament
This year, we continued to identify the risks that our audit clients were facing, design our audit work to respond to those risks, and report on matters of significance directly to our clients and to parliament. We formed 414 audit opinions (2021–22: 397 last year) about the reliability of state public sector and local government entities’ financial statements. Our audit service providers delivered 42 per cent of these opinions, as an important part of our team.
We tabled 18 reports to parliament on the results of our audits and recommendations for performance improvement. This compares to 19 reports in 2021–22. We table our reports as soon as possible to ensure our assurance for parliament is timely, and so entities can act immediately.
Across this year’s reports, we made 82 recommendations (2021–22: 77) on how public sector entities and local governments can improve their performance and achieve the positive, intended outcomes in public service delivery. This does not include the recommendations we make to our clients directly during our audits throughout the year. In our reports, overall, most of our recommendations entailed:
- multiple matters related to governance of government, including improving regulation or oversight of regulatory functions and strengthening whole-of-government frameworks, policies, and procedures
- developing more mature risk-management practices
- ensuring strategic planning is comprehensive and effective, so entities can respond to challenges as they emerge, and measure outcomes
- improving internal control environments, particularly around information systems and cyber risk
- better monitoring performance, including setting measures and providing more regular reporting on projects and programs
- improving procurement and contract management processes
- providing more transparent, accurate, and timely public reporting of financial statements
- maturing the preparation processes for financial statements
- improving information sharing and coordination between public sector entities
- responding to digital transformation and the adoption of new technologies.
Data is a strategic asset for QAO, with our analysis enhancing the significance of our insights and driving efficiencies and effectiveness across our services. In April 2022, QAO launched its extensive data analytics project. We started to plan a modernisation of our platforms, and sourced suggestions for new tools from our audit staff who have knowledge of day-to-day audit work, standards, methodologies, and – importantly – client needs.
As a result, we delivered 5 new analytics solutions, including:
- a solution for one of our largest audit clients that combined data from more than 20 spreadsheets and automated previously manual calculations for cashflow statements (where cash is coming from and where it is going)
- a dashboard for the health sector that analyses public hospital inpatient activity in line with funding agreements, as well as calculates revenue from bed days for patients
- a dashboard for property, plant, and equipment (the long-term, tangible assets an entity owns, such as buildings). It analyses asset data for a range of entities, including recalculating depreciation expenses and benchmarking asset data between similar entities
- a dashboard that collects asset indexation information (how asset costs are adjusted due to factors such as inflation) to help us assess the reasonableness of asset valuations
- a solution for local government audits that quickly and accurately recalculates revenue from rates.
We continued to realise benefits from improving the framework we use to assess new analytical ideas to prioritise what we should invest in and when. Our auditor-led approach helps us ensure we build the right tools, at the right time, to achieve maximum value. Before we build a new tool, we critically analyse its business case to assess development cost against efficiency, consistency, and audit quality gains. We revisit the intended benefits as we create the tool, and measure outcomes after release.
We used our analytics capability and high-quality audit methods in our assurance and performance audits to identify and share with our clients new insights from complex, diverse, and sometimes conflicting sets of data. One example is for our report to parliament on Delivering social housing services (Report 1: 2022–23). From our data analysis, we were able to combine information in a unique way to paint a full picture of what was occurring regarding social housing waitlists, and support our guidance on where the involved department could improve. Our robust analysis evidenced a key audit finding and helped the department better understand its data.
In the longer term, the effective and efficient use of data will help us address some of our resourcing challenges by attracting and retaining skilled staff. By continually innovating, we remain at the forefront of contemporary audit services and promote opportunities for ongoing learning in the latest data skills.
Effectiveness and efficiency measures
We endeavour to use our resources as efficiently and effectively as possible, and ensure we allocate the right people to the right tasks to obtain the best possible value. We reflect the hours we allocate to audit activities for all our workforce, including contracted audit service providers, as a percentage of all hours we paid for the resources. We break down our audit hours into the type of audit we are conducting – state, local government; or assurance or performance audit.
This year, the average cost per hour of our work charged to our audits was $170.6, which was slightly up from last year’s $159.1 and compared favourably to the ACAG average (that is, average of all other audit offices’ result) of $187.79. Our office was the second most efficient office for this measure of the 7 ACAG offices.
The percentage of our total (whole of office) paid hours charged to audit activities was 55.8 per cent, similar to last year’s 56.9 per cent and comparable to the ACAG average of 45.57 per cent.
Each year, we track, and compare to the prior year, the full life cycle cost of each of our reports to parliament and the time we take to produce them, as a measure of efficiency of our work.
This years’ results are slightly higher than our targets as we experienced an increase in the time it took to prepare our reports to parliament, and an increased cost to produce our reports on the results of our financial audits. These results reflect the challenges QAO is facing with resources in a competitive professional labour market.
Several reports – Major projects 2022, Managing Queensland’s Debt and Investments 2022 and Queensland Regional Accommodation centre (Wellcamp) – were newly introduced report topics for 2022–23, which shifted resources from audits that had begun or were due to begin. They required additional planning work and took on average longer to prepare than our other reports.
The timing of some of our performance and assurance reports can also be impacted by the release of other related, expert reports. For example, we postponed our report on Keeping people safe from domestic and family violence (Report 5: 2022–23) given the Women’s Safety and Justice Taskforce, and the Independent Commission of Inquiry into Queensland Police Service responses to domestic and family violence.
As part of our financial audit work, we continued to develop maturity models to help clients assess their internal controls. The costs of these models are included in our cost measure for these reports. We also updated our risk management maturity model as part of our Education 2022 report and developed a procure-to-pay maturity model as part of our Local government 2022 report.
Some of our clients also requested additional time to respond to several reports.
Cost of reports to parliament
This year, we delivered our reports on the results of our financial audits at an average of $151,000 per report, which was $21,000 above our SDS target of $130,000, and $48,364 above last year’s average cost of $102,636.
The average cost of our reports on the results of our assurance and performance audits (which include the audit work and the report) was $320,000, $75,000 under our target of $395,000, and $57,249 above last year’s average cost of $262,751. Our cost for these reports was lower than the ACAG average of $404,239.
Timeliness of reports to parliament
We measure the timeliness of our financial audit reports from our clients’ year-end dates to the tabling date of the report in parliament. This year, the average time to deliver the reports was 8.4 months – slightly longer than our target of 6 months and last year’s average of 6.7 months.
We measure the timeliness of the reports on our assurance and performance audits from the start of the audit to the tabling date. We delivered our performance audit reports on average in 11.9 months – longer than our target of 9 months and similar to last year’s result of 11.2 months. Our time compared well to the ACAG average time of 11.4 months.
We aim to deliver our reports quickly to provide parliament with timely and relevant insights, and to ensure our recommendations enable prompt action on improvement opportunities. We aim to remain efficient and keep our reporting costs down to reduce any impact on the involved clients.
Client satisfaction measures
We routinely engage an independent research provider (named ORIMA) to survey our audit clients, audit committee chairs, and members of parliament on their satisfaction with our services. We use these insights to immediately address any issues, implement improvement opportunities, and develop future strategy.
Audit client feedback on our services
In our yearly survey with the entities we audit, we ask departments, government owned corporations, statutory bodies, and local governments for feedback on our audit processes, our reports to parliament, and the value of our services. This feedback tells us where we can improve, informs our decision-making, and influences innovation and change. We share the results immediately with our staff, act on feedback, and celebrate positive outcomes.
Our audit client satisfaction is a blended average from the surveys of our financial audit and assurance or performance audit clients, as we deliver these services as a OneQAO team. Over the past 5 years, our client survey trends have remained relatively steady, with ups and downs in some specific areas. We continue to work on maintaining and improving these results.
For 2022–23, we issued 296 surveys with a 69 per cent response rate (2021–22: 72 per cent). Our overall result across all our audit and assurance services was 83 index points (ip), up from 2021–22 and 3 points over our SDS target of 80ip. (IP is the average of the aggregate indices for each area of performance that the survey explored.) We received, overall, 80ip for our audit process, 82ip for reporting, and 86ip for the value of our services.
In the general comments we received, clients continued to recognise the effectiveness of our auditors’ communication and professionalism. Clients complimented us on the efficiency of our audit process and said they appreciate the pragmatic approach we take to managing complex accounting issues. Some clients also commented on QAO’s risk management maturity model, telling us that it is providing value.
A respondent shared with us: ‘The QAO service is a critical part of our assurance structure and a key pillar of confidence for SLT [senior leadership team] and the Board.’ — Audit client, ORIMA survey, March 2023.
Another said: ‘It’s been great working with QAO throughout the audit process. QAO’s team has always been professional and very approachable for questions and discussions throughout the whole year. The team makes a noticeable effort to build and share entity knowledge within the team, and the positive impact of this in both audit processes and team relationships was noted.’ — Audit client, ORIMA survey, September 2022.
In terms of areas for improvement, some clients would like us to provide more timely responses to their questions. To address this, we will establish clear protocols for acknowledging client enquiries and reinforce the importance of keeping clients informed, especially where there is an anticipated delay.
Audit committee feedback on our services
We must deliver our insights to audit committees in an effective, timely, and engaging manner so they can use their position to influence the change we are seeking for our clients. They are an important group for advocating our recommendations with entity management, and those of internal audit and other assurance providers. These committees have a key role in monitoring entities’ progress in implementing recommendations.
We engage with audit committees on an ongoing basis as part of our audits, and via dedicated deliverables that we develop specifically for them. Our attendance at audit committee meetings ensures we alert them to emerging risks and allows us to share the insights we glean from working across all Queensland state and local government entities. Our staff can draw on years of knowledge and expertise.
We survey audit committee chairs every 2 years to understand if they are aware of our insights. We ask them for feedback on how we supported them, how they value our services and recommendations, how clearly we communicated, how they use our reports and resources, and their thoughts on our audit processes. QAO has surveyed chairs 3 times to date – in 2019, 2021, and in 2023. This year, we surveyed 191 committees, receiving responses from 68 chairs who work across 103 of our audit clients.
We were pleased to hear that nearly all survey respondents said QAO is meeting their needs and expectations. We received the same score (98 per cent) as we did in our prior survey in 2021. More respondents than in 2021 gave us a positive score for general impressions and expectations, at 89 per cent, (up from 86 per cent). In the free text comments, one chair shared with us:
‘I value QAO's professionalism and independence. The advice provided by QAO to the committee on relevant reports in progress that may be of interest to agencies, recent tabled reports to parliament, and blogs is useful and ensures committee members are informed about the activities of QAO.’ – Audit committee chair, ORIMA survey, March 2023.
Ninety‑nine per cent said we provide valuable assurance on the reliability of public sector financial reporting, up from 95 per cent in the prior survey; and 95 per cent said that we help improve public sector accountability, up from the previous survey result of 90 per cent.
Overall, 84 per cent told us they are aware of or see QAO recommendations, have oversight of their entity’s implementation of our recommendations, and feel informed about QAO’s self-assessment and follow-up process on recommendation status. This is slightly up from 82 per cent in 2021.
Almost all respondents used our products at least once in the past 12 months, with reports to parliament and fact sheets being the most commonly used. However, overall consumption of our products was lower when compared with 2021, and we will look to understand why there has been a change. The change may be due to the number of reports we had tabled by the same month in 2021, at the time of the survey.
Chairs gave us a rating of 85 per cent for our overall engagement with them, on par with 2021. Ninety-three per cent felt our staff attendance at their committee meetings adds value, compared to 90 per cent in 2021.
We were also pleased to see that 98 per cent felt there was consistency between the services they receive from our contracted audit service providers (ASPs) and QAO, as this has been an area QAO has been focused on improving. However, feedback indicated that we can still improve the transfer of knowledge between ASPs and clarify our expectations around their attending audit committee meetings.
Responsive and flexible engagement
The size, type, complexity, and maturity of the entities and local governments we audit varies greatly. Key to delivering effective audit services and providing timely, relevant, and clear advice is understanding the discrete and shared challenges they face.
We are supported by technology that allows flexibility and supports our relationships when we need to engage from afar, but we still travel across Queensland to complete many of our clients’ audits in person and learn more about their work.
The Auditor-General is committed to meeting with our clients and stakeholders face to face, to hear any concerns they may have and to identify opportunities to improve our services.
The Auditor-General continued meeting with our more regionally based clients, in:
Working effectively as OneQAO
Our OneQAO approach means we view our workforce as one team – we deliver our client services seamlessly and consistently, support each other, and share expertise.
Over time, we have continued to improve how we work with our ASPs so they are a more integrated part of our workforce. For the past 3 years, we have been capturing feedback from them via a survey that is conducted by an independent researcher.
This year, overall, ASPs were positive about their experience with QAO, with more than half (55 per cent) saying they had experienced improvements in the way we work with them over the past 12 months.
One hundred per cent of respondents said QAO’s contract managers (the staff they deal most with) conducted themselves professionally and worked collaboratively with them, up from 97 per cent last year. All respondents said they understand what is expected of them, and 88 per cent agreed our learning and development activities have helped them improve their performance (2021–22: 89 per cent).
We were also pleased to hear that 95 per cent felt QAO’s contract manager adds value to our clients, up from 87 per cent; and 87 per cent said they add value for the ASP, improving from 74 per cent.
In the past year, we aimed to improve how we share information with ASPs and how easy our audit templates are to use. We received positive comments about the enhancements we made to our ASP partner hub, which is a collaborative, secure site on our SharePoint Online intranet. Many also said our ASP workshops and industry-specific forums are valuable.
We will continue to focus on some areas for improvement. For example, some respondents asked for faster responses to their enquiries, though they recognised our resourcing challenges.
We use these survey results to inform our next actions and look forward to delivering improvements alongside our ASPs in the coming year. One of our ASPs shared:
‘There appears to be a continuous program of improvement to the audit process and interaction with audit service providers. We are very comfortable with the processes at the QAO and we value the relationship.’ – ASP, ORIMA survey, May 2023.
Another said: ‘Good organisation with good people. They're all doing their best with the limited time and resources they have. I get the feeling there is a good culture and team spirit, which is great for an external contractor to see.’ – ASP, ORIMA survey, May 2023.
Supporting parliament’s oversight of public service delivery
We continually work to help parliament understand entities’ performance and financial management so it can hold them to account for the delivery of public services. Through our engagement with parliament, we aim to maintain its trust in our expertise and our value-for-money services.
Our parliamentary engagement plan articulates our engagement approaches per the different needs of a range of stakeholders, ensuring our deliverables are high quality, relevant, and timely.
We continually work to help parliament understand entities’ performance and financial management so it can hold them to account for the delivery of public services. Through our engagement with parliament, we aim to maintain its trust in our expertise and our value-for-money services.
Our parliamentary engagement plan articulates our engagement approaches per the different needs of a range of stakeholders, ensuring our deliverables are high quality, relevant, and timely.
This year, we gave 10 briefings to parliamentary committees, covering the findings and recommendations in 14 reports to parliament, compared to 9 briefings on 11 reports last financial year.
We responded to various requests for advice from parliamentary committees about our work, in addition to our briefings on each report. In November 2022, the Auditor‑General presented to the Economics and Governance Committee (EGC) on our performance, and we liaised with the EGC per the legislative amendments underway for QAO.
The annual forum we hosted at QAO for committee chairs, deputy chairs, and secretariats continued as a successful avenue for sharing the insights from our work and understanding members’ interests and engagement preferences. We recognise that parliamentarians have numerous demands on their time, so their attendance at our forum demonstrates its ongoing value.
We consulted early on our new forward work plan with parliamentary committees and ministers (regarding the audit topics impacting them), receiving some feedback on the timing and scope of our planned audits. We remained responsive to parliamentarians’ needs and requests, including considering requests for audits that they sent to us – for example, on the Queensland Regional Accommodation Centre (Wellcamp), which resulted in our report to parliament.
We also continued to engage directly with ministers during the audit conduct phase and following report tabling to secure feedback and, overall, to increase attention to our recommendations.
We continued our regular meeting with the secretariats of parliamentary committees to better understand their committee members’ needs. The committee staff also sought our advice on how to prepare clear and engaging reports, including on how we use graphics and data.
Members of parliament satisfaction with our services
Via an independent researcher, we survey members of parliament (MPs) twice during each parliamentary term, and we have been using the data over the years to improve our services, reports, and engagement. We ask members for feedback on our work, how they see our role, and how they use and perceive our reports and resources.
This year, we were pleased to see our efforts recognised by MPs. Nearly all survey respondents, 97 per cent, said they were satisfied overall with Auditor-General reports and services. This was well over our SDS target of 80 per cent, and notably higher than the 89 per cent in our previous 2021 survey. No respondents marked they were dissatisfied or very dissatisfied with our services.
All MPs, 100 per cent, who had engaged with the Auditor‑General in the past 2 years were highly positive about the usefulness of the engagement, QAO’s responsiveness, and the extent to which the information we provided them addressed their needs. This was an increase from 94 per cent in 2021.
MPs’ perceptions of the value of reports were more positive than in 2021, with 97 per cent saying our reports assisted parliament in holding entities to account, up from 90 per cent in 2021. Ninety‑four per cent said our reports informed them about public sector performance, up from 89 per cent; 92 per cent said the reports were about valuable topics, which was the same result as in 2021.
All survey respondents, 100 per cent, said our reports communicate issues clearly, up from 87 per cent. And 90 per cent said they were easy to understand, compared to 77 per cent in 2021.
We received good results on MPs’ use of our reports and resources:
- All MPs surveyed, 100 per cent, said they had read an Auditor-General report in the past 2 years, slightly up from 96 per cent in 2021. This includes 87 per cent who reported reading them ‘often’ or ‘always’.
- Ninety-four per cent had used our fact sheets, up from 78 per cent in 2021, and 83 per cent had used our interactive dashboards, up from 65 per cent in 2021. Our blog posts continued steadily, with 59 per cent reading them, in line with the prior result of 55 per cent.
One area trending slightly down was whether our reports are addressing their key areas of interest, with 69 per cent of respondents saying yes, similar to 71 per cent in 2021. We will aim to better communicate with MPs about our role and the types of audit topics that are timely and appropriate (as mandated) for us to undertake.
In the free text comments, one MP shared: ‘Appreciate their impartial consideration of important issues.’ – MP, ORIMA survey, March 2023.
Another said: ‘The Auditor-General needs more resources to be able to assess more aspects of government. Their reports are the best available summaries of performance and issues.’ – MP, ORIMA survey, March 2023.
Other feedback from parliamentary committees
‘The committee welcomes the QAO’s ongoing engagement with the public sector regarding the key themes and challenges affecting entities’ management and reporting of their expenditure of public funds each year.’
In its report No. 44, regarding our report Improving grants management (Report 2: 2022–23), the EGC said:
‘The committee acknowledges the ongoing work of the QAO in helping to drive improvements in processes, communication, risk management, evaluation and collaboration in the management of grant funding in Queensland, and to support transparent and accessible reporting on the distribution of grant payments.’
Auditing what matters most to Queensland
Per the Auditor-General Act 2009, each year we publish a 3-year plan to ensure we are auditing the right matters at the right time. Our plan provides transparency to parliament, our clients, and the Queensland community on the audits we intend to perform and why we consider them important. This year, we published our Forward work plan 2023–26 in early June 2023.
In developing the plan, we considered a range of risks and challenges to the state public sector and local government, including the impact of recent domestic and global events. We have a robust methodology for prioritising potential topics based on their impact and importance, and the influence we can have over improvements to entity performance. As we have a limited number of audits and reports to parliament we can produce each year, we are careful and systematic in our selection of topics.
This year, we continued to successfully embed our OneQAO approach into our planning, ensuring our work takes account of the issues and priorities we see emerging across our clients, and as drawn from a range of intelligence sources. We include both performance and financial audits in the plan, as they work together to provide a full picture of performance and accountability.
Public services are delivered across Queensland – which is large and diverse, with large numbers of people living outside the more densely populated metropolitan areas. In response, over the past few years and into the future, our planning includes even more of a focus on Queensland’s regional areas.
Our plan includes an acquittal of any changes since the previous year’s version. We also update it throughout the year with new or revised topics to remain responsive to changes in Queensland’s public sector, the emergence of new risks, and our stakeholders’ needs. We immediately share any changes on our audit program page. This webpage was viewed 4,757 times this year (excluding internal staff traffic).
We consult widely on our plan as we prepare it to provide advance notice of our potential topics, so entities can prepare documentation and data, and to clarify time frames and initial scopes of the audits. We circulate a draft of the plan to parliamentary committees, ministers, departments, local governments, statutory bodies, universities, government owned corporations, and the Leader of the Opposition.
How we manage requests for audits
QAO welcomes information on public sector performance and requests for audits from members of the public, elected representatives, public sector and local government employees, and other integrity bodies. To be transparent, we publish the requests we receive from members of state parliament and Queensland councillors on our request for audit webpage.
This year, we received 79 requests for audits, of which we assessed 8 as high priority, meaning the topic has a significant impact or reflects a widespread issue. We finalised 83 requests received in this or previous years, which included completing 25 investigations. We reported 8 issues directly to entity management, and closely engaged with them to expedite or resolve matters.
Eight requests contributed to our current or planned assurance or performance audits, and we added 4 to our list of potential topics for our forward work plan. Requests for audit remained an important source of intelligence for our forward work planning, and the average duration of requests in progress was 9.2 months, faster than 10 months in 2021–22.
Some of our tabled reports to parliament this financial year incorporated our work on requests we received on:
- Queensland regional accommodation centre (Wellcamp) (Report 18: 2022–23)
- Cross River Rail and the Gold Coast Light Rail projects – included as part of Major projects 2022 (Report 7: 2022–23), which provided details on Queensland’s major infrastructure projects and analysed expenditure.
Our other investigations did not result in adverse findings or require reports to parliament.
The most common topics or themes in the requests we received included management of grants and procurement and management of major projects. Matters related to youth justice also increased as an area of interest this year.
We received a similar number of requests from elected members (at an average of 6 per year since 2020–21). Most of our requests come from the general public.
We had more matters referred to us from other integrity bodies than last year, at 6 per cent compared to 4 per cent. We liaise with the Crime and Corruption Commission, Office of the Independent Assessor, and other integrity bodies as necessary and permissible, in relation to specific investigations.
We processed requests more efficiently this year, resulting in fewer requests at any one time in the triage or investigation in-progress stages. This is due to improvements to our internal system for managing requests. On average, we had 25 active requests at the end of each month, compared to 33 in 2021–22. We assessed new requests on average in 25 days, compared to 31 days last year, including sending a detailed response within 30 days to 84 per cent of people who made the request.
4. The impact from our work
Objective: We use contemporary auditing practices to deliver independent services that are used to improve accountability and performance.
Risk: We do not sufficiently innovate and use technology to better understand our clients and deliver valued services.
Indicator of achievement: Parliament and our clients benefit from our independent assurance services and the insights we provide.
An outcomes-focused approach
Our audit work can have both immediate and longer-term outcomes – including parliament being better informed, entities acting on our recommendations, or a change to service delivery that is directly attributable to an insight in our reports. We can achieve more positive outcomes from our work when our audit services are high quality, our recommendations are relevant and timely, and our reports to parliament and other resources are clear.
We aim to capture ‘pre-report’ tabling impacts or changes that may occur during an audit, where entities start to act on our recommendations immediately, before we complete and table our report to parliament.
Monitoring entities’ implementation of our recommendations
While our mandate does not extend to forcing entities to act on our recommendations, we ask them to self-assess their implementation progress. We then report to parliament every year on the results.
This approach gives entities and audit committees clarity over the previous and current status of QAO recommendations. It also gives them a record of all performance audit recommendations we make to them, including those re‑directed from recent machinery of government changes.
Our resultant report to parliament includes insights on the most common types of recommendations we make – indicating shared challenges and opportunities across entities, and the recommendations that entities are least likely, or slower, to implement.
Our interactive data dashboard allows users to search the results by entities’ status, report title, year, entity name or type, or parliamentary committee.
This year, we tabled our second status report, 2022 status of Auditor-General’s recommendations (Report 4: 2022–23). We asked 56 entities to self-assess their progress on implementing 454 individual recommendations from 34 QAO reports to parliament tabled in 2018–19 and 2019–20. Overall, entities reported they had fully implemented 64 per cent of our recommendations, partially implemented 29 per cent, and not implemented 3 per cent. (Four per cent were no longer applicable, meaning circumstances had fundamentally changed, for example, a change in government policy or program.)
In its April 2023, report No. 44, Examination of Auditor-General reports, the Economics and Governance Committee (EGC) covered 7 QAO reports to parliament. On our 2022 status of Auditor-General’s recommendations report, it said:
‘In addition to providing an important accountability mechanism, by highlighting outstanding recommendations and implementation delays, these reports have provided valuable overarching insights into the strategic risks facing the public sector.
The committee notes that the QAO’s accompanying interactive online dashboard allows public users to view this information in a format most relevant to them.
The committee welcomes the ongoing efforts of the Auditor-General and QAO to leverage the findings of audits and report on these matters in a transparent and accessible way, encouraging a culture of continuous improvement in the public sector.’ – ECG Report No. 44, page 32, April 2023.
In our independent survey, which we conduct every 2 years, we ask audit committee chairs if they felt informed about our self-assessment process and report. This year, 86 per cent of respondents said they did feel informed. We will continue to increase their awareness and understanding about the approach and its benefits.
The 2022 report was viewed 2,507 times within 12 months, and our supporting interactive dashboard was viewed 1,081 times.
Parliamentary committee follow-up of our reports and recommendations
Parliamentary committees investigate specific issues and proposed legislation. After we table a report to parliament, it is referred to the respective committee. The committee may select to conduct a subsequent examination and table a resultant report on their inquiry. This year, 3 parliamentary committees held 5 inquiries on our reports (noting that sometimes the committees’ inquiries fall in the following financial year to when the report was tabled).
We are invited by some committees to provide a briefing on a report (or multiple reports) directly to them via a public or private briefing. This year, we attended 8 briefings. Three were for the State Development and Regional Industries Committee (SDRIC), with each hearing covering one report. Two of the hearings were for the EGC, covering 5 reports.
One of our focus areas across our planned program of audits and reports to parliament, per our forward work plan, is infrastructure investment. This includes delivery of major projects and capital programs, and so is of importance to the SDRIC.
In February 2023, SDRIC thanked QAO and stated it fully supports our recommendations in its Report No. 39 – Examination of Auditor-General Report 16: 2021–22 Contract management for new infrastructure. The committee recommended it further examines departments’ progress in implementing our recommendations within the next 12 months. It also stated:
‘We also use this opportunity to reinforce the Auditor-General’s recommendation that all government departments should review their internal policy, procedures and guidance at least every 3 years, to ensure that they remain fit for purpose.’ – SDRIC Report No. 39, page 7, February 2023.
Earlier, in December 2022, in Report No. 33 Examination of Auditor-General Report No. 9 2021–22 Regulating dam safety, the SDRIC reinforced our recommendation on the need for independent audit and risk management committees:
‘In general, the committee believes there is an ongoing need for government entities such as bulk water entities and local governments as dam owners to add independent audit and risk management committees to their governance structures, and the committee has recommended this accordingly. Such committees can add significant value to an organisation on its risk management responsibilities and legislative compliance.’ – SDRIC Report No. 33, page ii, December 2022.
Our reports on the results of our financial audits of local governments are also referred to the SDRIC. In its Report No. 32 – Examination of Auditor-General Reports on the local government sector, the committee recognised the importance of QAO’s recommendations. It reinforced our recommendations about improving internal controls, in particular in the areas of information systems, risk management, and procurement. The committee strongly supported our recommendation that all councils, regardless of size, establish an Audit and Risk Management Committee (ARMC). In the report foreword, the committee chair noted:
‘Effective audit committees are an important component of good governance. The committee strongly supports the Auditor-General’s recommendation for all councils, irrespective of size, to establish audit committees. We also support the recommendation that the chairs of these committees be independent of council and council management.’ – SDRIC Report No. 32, page 3, November 2022.
We appreciate the attention to, and follow-up of, our work that Queensland’s parliamentary committees take. Action by them is imperative to us achieving the outcomes from our work that will make a difference to public service delivery. We will continue to improve how we encourage involvement from all committees in this key role.
Case studies on impacts from our reports to parliament
Delivering social housing services (Report 1: 2022–23)
In July 2022, we tabled a report that examined whether social housing is effectively managed to meet the housing needs of vulnerable Queenslanders. We looked at where we could meaningfully quantify the immense challenges facing stakeholders, and forecasted what would happen if nothing changed. We used high-quality audit methods to combine diverse, and sometimes conflicting, sets of information to draw balanced conclusions.
Award for audit excellence
Our audit on delivering social housing services won the excellence category in the 2023 Australasian Council of Auditors‑General (ACAG) performance audit awards.
The excellence category recognises the audit that demonstrated the most exceptional audit methods, impeccable standards of evidence, and positive and sustained impacts.
To provide crucial information to those Queenslanders waiting for social housing, we:
- concluded how many families on the register were unlikely to ever receive social housing, and identified how many the responsible department had not informed that this was the case
- provided needed clarity over the social housing process.
To help the involved department make decisions with more consistency and transparency, we:
- concluded and demonstrated how it had a decentralised process
- identified key system controls that were incorrectly or inconsistently applied.
The department quickly acted on our findings throughout the audit, with its actions starting to address weaknesses in the social housing process. The department accepted all 8 of our recommendations, and asked us to share our audit method so it could replicate our analysis after the audit concluded – which we of course willingly did.
Queensland’s housing minister welcomed our report and acknowledged QAO’s work in a public statement. Following our audit, the Queensland Government convened a housing summit with key government and non-government organisation (NGO) stakeholders. The Housing Summit Outcomes Report referenced our audit and committed to model future demand for housing in line with our recommendation.
As at 30 June 2023, the report has been viewed on our website 4,125 times (noting, we filter out internal staff traffic), making it our most read report this financial year.
We will follow-up entities’ progress in implementing our recommendations from this audit in our 2024 status of Auditor-General’s recommendations report to parliament.
Keeping people safe from domestic and family violence (Report 5: 2022–23)
In November 2022, we tabled a report to parliament examining how effectively public sector entities keep people safe from domestic and family violence (DFV), prevent it occurring, and rehabilitate perpetrators to minimise re-offending.
We combined extensive social research and complex analytics to produce findings where we could leverage our unique position to look across the diverse organisations responding to DFV. We identified and visualised patterns and gaps in the various data and added crucial context. We also engaged experts for input on current research and worked closely with other DFV reviews or inquiries to share trends and challenges.
Our collaborative approach helped Queensland deliver multiple reports with complementary findings and recommendations. A major taskforce relied on and referenced findings from this audit and from previous QAO reports, including Delivering forensic services (Report 21: 2018–19) and Criminal justice system – reliability and integrity of data (Report 14: 2016–17). An Independent Commission of Inquiry used our analysis, resulting in action by entities, and noted that our insights, findings, and recommendations were invaluable for informing its own recommendations.
Our report narrative outlined the complexities across Queensland’s varied DFV response. Not only could we explain to our audiences how the system is operating, but we could also help them understand the challenges for victims, perpetrators, and their families navigating the system.
The interest in our report tells us that topics in this sector continue to be of importance to Queenslanders. As at 30 June 2023, the report has been viewed 3,404 times on our website.
We used lessons from this audit to inform our own work, for example, to improve how we collect and analyse data on complex, multi-agency audits. We have fed this into our methodologies and frameworks in support of continuous improvement.
Improving grants management (Report 2: 2022–23)
Who gets grant funding and how much is received can be a matter of contention for Queenslanders. However, the information agencies publish is typically difficult to understand, being raw data that requires data literacy to understand. In our audit, we analysed and repackaged this data for entities, community groups, businesses, and more. Via our report and an engaging and easy to use dashboard, we provided insights into who the grants funding agencies are, who is receiving grants, and where in Queensland the funding goes.
We developed a grants management maturity model for entities to use, with clear guidance on how they can perform their own assessments. In developing the model, we analysed best practice, prescribed requirements, and applied our own experience from across many entities. This model helped us provide recommendations for parliament, identify the various risks facing entities, and share opportunities for greater efficiency and collaboration. Through our unique perspective across entities, we enabled them to learn from each other and build greater capability and consistency.
Departments have already actioned our recommendations and applied our maturity model. For example, the internal auditors from one of Queensland’s largest departments (not sampled in our audit) tested their department’s controls against our model, with their reports noting opportunities to improve.
The report has been read 3,394 times on our website. The maturity model has been viewed 565 times and continues to grow over time – we project it will become one of our most read and long-lasting better practice offerings.
We discussed our learnings at our various events, including QAO’s session for audit committee chairs and our technical audit update for nearly 600 finance managers. We also discussed it at external events such as the Interdepartmental Accounting Group conference and the Institute of Internal Auditors Australia’s SOPAC conference. We continue to receive requests to present across industry and government.
Increasing interest in our advice and technical expertise
We aim to support and provide our expertise to industry, professional bodies, and our clients that have a leadership role in the public sector, particularly on technical audit matters or on how we have delivered an initiative. This collaboration helps to increase the awareness and reach of our insights and advice.
This year, we worked with the Department of State Development, Infrastructure, Local Government and Planning (DSDILGP) and the Local Government Finance Professionals (LGFP) on a financial sustainability guideline and associated risk matrix. We also worked with the LGFP in its development of an accounting paper on the voluntary buy-back scheme following the 2022 Queensland floods. This scheme involved complex accounting that affected 39 Queensland councils.
For the local government sector, we presented at the LGFP’s event on the importance of cyber security, and at its annual conference on various topics relevant to councils. For DSDILGP, we presented at its financial accounting workshops in 8 locations.
We continue to share our innovation in data analytics and provide advice on how other organisations could benefit from similar approaches. In March, we were invited to participate on a panel discussion at the 7th Annual FST Government Queensland Summit on data strategy, culture, and sharing.
This year, QAO was also invited to present at the:
- Interdepartmental Accounting Group (IAG)
- University of Queensland’s MBA program
- Canadian Council of Legislative Auditors Performance Audit Symposium
- The Institute of Internal Auditors Australia (IIAA)
- CPA’s Queensland Public Sector Discussion Group
- Institute of Public Works Engineering Australasia (IPWEA) International Asset Management Congress.
We greatly enjoy sharing what we have learnt on our journeys over the years and appreciate the opportunity to discuss our perspectives.
The wider value of our recommendations
We endeavour to share learnings from our audits and reports that may be relevant, or of interest, to all entities, not just to the ones directly involved in the audits. A range of entities read our reports as we table them, and we share insights via our briefings to audit committees and in our blog, better practices guides, and fact sheets.
In our 2020–21 reports Responding to complaints from people with impaired capacity – Part 1: The Public Trustee of Queensland (Report 5: 2020–21) and Part 2: The Office of the Public Guardian (Report 14: 2020–21), we recommended making information clearer and easier for the public to understand. In May this year, we were pleased to be advised that the Office of the Ombudsman had also taken note of this, despite the recommendation not being made directly to it. It produced a series of one-topic videos to better communicate about its services to people with impaired capacity, and it updated its website. It co-designed the new products with consultants from the Queensland Disability Network.
Readership of our reports and resources
Reports to parliament and interactive data dashboards
One of the ways in which we understand the level of our stakeholders' interest in our audit topics is by measuring the number of views of our reports to parliament. Overall, we aim to increase views across all our reports over time, to grow awareness of our role and exposure to our insights. We also measure how long people spend in our reports on our website – that is, reading them – to indicate how engaging they are.
Our total number of views for all our reports this year was over 74,000. Our most viewed reports tabled this financial year were: Delivering social housing services (Report 1: 2022–23), Improving grants management (Report 2: 2022–23), and Keeping people safe from domestic and family violence (Report 5: 2022–23).
We have a pop-up poll on our website where we ask visitors if the report to parliament was easy to understand, with 94 per cent telling us yes.
Our interactive data dashboards continued as a key channel for translating our audit findings and insights. We used visualisations to help explain financial information for those users with less experience in the field, and to provide regional context relevant to the user. This year, we refreshed 5 dashboards with new data from the results of our financial audits and interesting demographic data.
Blogs, fact sheets, and better practice guides
We prepare a range of resources, in addition to our tabled reports to parliament, to increase the awareness of our advice and encourage entities to learn from others.
QAO’s blog continues to be one of our most popular channels, allowing us to synthesise or ‘break down’ insights from our work into small articles. This year, our blog strategy included series of articles covering issues we are seeing repeatedly – both over the years and across our audits. We aimed to remind new readers of persistent issues and, most importantly, ways to overcome and avoid them.
Our series included 3 posts on the regulation of government services (collectively viewed 814 times) and 3 on contract management (viewed 1,106 times). We also began a series on performance management, and a series on asset management.
Overall, we published 25 new blog posts this year. Our top 3 most read posts (of those published any year to date) were: A contract register is more than a list, How you can manage the risk of your legacy systems and Financial Reporting Requirements (FRRs) and changes for 2022. Overall, our blog was viewed 24,223 times this financial year.
We continued to promote and share our 20 fact sheets with our readers, with 2,555 overall views. The most popular fact sheet is about our forward work plan, with 444 views.
Events and forums for our clients
Our events continued as an ideal way for us to engage closely with specific client groups in a more discussion-based manner. We cover bespoke information relevant to the attendees, such as technical and standard updates, insights from our audits and reports, our forward work plan, and significant areas of interest (such as cyber security). We offer our client events in person and via live stream.
We survey attendees after each event to understand which presentation topics were of most value, check that the timing of the event remains suitable, and gather any other feedback. We track this feedback over the years so we can continue to improve.
Our annual event for finance managers for all our Queensland state and local government clients had nearly 600 attendees this year, of which 70 were in person. We also appreciate Queensland Treasury’s participation as a presenter on whole‑of-government matters. Eighty-six per cent of post-event survey respondents said the briefing helped them in their role in financial management.
We host an event twice a year for audit committee chairs, with 174 attending across our events this year. This remains steady year on year.
In March, we held our third forum for energy entities and the audit service providers who partner with us to deliver services for them. We had 72 attendees, of which 36 were in person. In the post-forum survey, we received a 4.8 average star rating out of 5 when we asked them how likely they are to recommend the forum to their colleagues. All respondents said they found the presenters engaging. A respondent shared:
‘Thanks to QAO for running the show – one of the highlights for our team.’ – Energy forum survey, March 2023.
‘Very Informative sessions. Please keep providing the forum.’ – Energy forum survey, March 2023.
Alongside our presentations at our energy forum and our December briefing for audit committee chairs, we invited a guest speaker from the Australian Cyber Security Centre to present on the risks organisations are facing. We appreciate the centre’s time in sharing its expertise.
5. Governance and accountability of our office
Our governance framework aids us in achieving our objectives and monitoring risk, and it helps us optimise our performance. Our governance processes ensure we meet our clients’ and the Queensland community’s expectations of probity, accountability, and transparency.
QAO’s organisational structure at 30 June 2023
Our operating model enables us to deliver our services as one team, with our Assistant Auditors-General overseeing our client services, quality, and people.
Our governance framework
Our governance framework ensures we promote efficiency, effectiveness, accountability, integrity, and transparency in all we do.
Audit and Risk Management Committee (ARMC)
The ARMC is an independent advisory committee to the Auditor-General, comprised of 3 external members who bring in expertise from other industry environments. Membership details are included in Appendix B.
This year, the ARMC provided oversight of QAO’s risk, control, and fiscal responsibilities underpinning our corporate governance. It met 4 times in 2022–23.
Audit Quality Sub-Committee
This is a sub-committee of the ARMC. It has 3 independent members and is responsible for advising the ARMC on quality issues and responses across QAO’s audit services. It monitors QAO’s audit activities to ensure they comply with quality requirements.
This year, the sub-committee looked at QAO’s quality program, the results of our quality assurance reviews, and QAO’s transparency report. The committee met twice in 2022–23.
Executive Management Group (EMG)
This group includes all executive leaders. It determines strategy and budget, and regularly reviews QAO’s strategic and operating risks. The group formally convenes monthly to monitor performance, drive change and innovation, and manage our core business operations. The EMG members are:
- Brendan Worrall, Auditor-General
- Karen Johnson, Assistant Auditor-General (Deputy Auditor-General when required)
- Patrick Flemming, Assistant Auditor-General
- Michelle Reardon, Assistant Auditor-General
- Darren Brown, Assistant Auditor-General
- Damon Olive, Assistant Auditor-General.
Sub-committees of the EMG
Quality Management Group (QMG)
This group supports the Auditor-General in complying with professional and ethical requirements, and is chaired by a member of the EMG. The QMG members monitor all aspects of QAO’s quality assurance framework. The group met 5 times in 2022–23.
Finance Management Group (FMG)
This group supports the Auditor-General in complying with the Financial Accountability Act 2009 and the Financial and Performance Management Standard 2019. The FMG also reviews QAO budgets, service delivery statement measures and reporting, budget updates, and annual financial statements. The committee is chaired by a member of the EMG. The FMG met 4 times in 2022–23.
Information and Cyber Governance Committee
This committee guides the governance of matters relating to information, data, and cyber security. It focuses on compliance with legislation and government policy, and on increasing data governance awareness and capability within the organisation. The committee is chaired by a member of the EMG. It met 3 times in 2022–23.
This oversight group guides how we manage our strategic risk of recruiting and retaining the right people to uphold our values and ethical and quality standards. The committee is chaired by a member of the EMG. It met 11 times in 2022–23.
This board monitors and oversees QAO’s responses to reviews of significant QAO projects and initiatives, including reviews on data analytics (conducted in September 2021), file efficiency (August 2021), and learning and development (July 2021). The board is chaired by a member of the EMG and has an external, independent member. It met 10 times in 2022–23.
This group provides oversight and guidance on implementing amendments to the Auditor-General Act 2009 on transitioning the employment of QAO staff from the Public Sector Act 2022. The chair is a member of the EMG and members represent subject matter experts from across QAO, on matters such as human resources and QAO’s legislation. The group meets fortnightly or as needed.
Internal audit conducts independent and risk-based assurance activities, aiming to improve QAO’s operations. It works in accordance with an annual plan, and its charter aligns with the International Standards for the Professional Practice of Internal Auditing. QAO engaged Protiviti to deliver its internal audit program this year, which included:
- implementation of the 2017 strategic review recommendations – assessing whether QAO’s actions have appropriately addressed the recommendations
- end-to-end revenue processes – assessing QAO’s controls within our revenue process and how revenue is managed throughout project life cycles
- contracting of audit service providers (ASPs) – assessing QAO’s processes for ensuring consistency in our assessment of ASP requests for additional fees for financial audit work and for non-audit work conducted for the client outside of QAO’s contractual arrangements
- employee performance management – assessing controls and how effectively QAO’s management levels provide feedback and monitor staff performance
- external data visualisations – assessing QAO’s activities for ensuring the accuracy of information
- Information Security Management System (ISMS assessment – including the Australian Cyber Security Centre’s ‘Essential 8’) – assessing the maturity of QAO's ISMS against the ISO 27001 mandatory clauses and key controls in areas that have significantly changed since prior year audits (currently underway)
- the results of the internal audits are reported to the Auditor-General, EMG, and ARMC, with QAO’s action on recommendations recorded and reported on monthly.
Sections 71 and 72 of our legislation, the Auditor-General Act 2009, detail the requirements for an independent audit of QAO. An auditor is selected through a procurement process undertaken by the Department of the Premier and Cabinet and then appointed by the Governor-in-Council.
Like QAO’s audits do for public sector and local government entities, our external auditors provide assurance that the information in our financial statements can be relied upon, and that the statements are free from material misstatement and comply with relevant legislation.
Strategic reviews of QAO
Approximately every 5 years, a strategic review of QAO is conducted by an independent reviewer, appointed by the Governor-in-Council. The reviewers engage with us and our clients to understand how well we are operating and fulfilling our mandate.
The last strategic review of QAO was in 2017, with the report tabled in parliament on 23 March 2017. The reviewers concluded that QAO is fundamentally sound and a valuable part of the Queensland public sector. They made 32 recommendations. As of 30 June 2023, QAO has fully implemented 28 of the recommendations and partially implemented the remaining 4. Of the remaining recommendations, QAO is:
- developing a better practice resource for valuing public infrastructure to guide our auditors’ work with clients
- engaging with the Queensland Government’s Integrity Reform Taskforce on amendments to the Auditor-General Act 2009, to enhance our independence and ensure our mandate remains relevant and contemporary.
One of the key 2017 strategic review recommendations was to strengthen the independence of the Auditor-General, which was in line with the suggestions made by QAO in its submission to the 2013 Finance and Administration Committee’s inquiry.
This recommendation was further considered and supported by Professor Coaldrake in his 2022 review on culture and accountability in the Queensland Public Sector.
In November 2022, the Integrity and Other Legislation Amendment Act 2022 was passed in the Queensland Parliament, amending the Auditor-General Act 2009. The primary amendments covered formal recognition of the Auditor-General as an officer of the parliament, and the employment of staff under the Auditor-General Act 2009.
In June 2023, the Integrity and Other Legislation Bill 2023 was introduced in Queensland Parliament. This Bill proposes further amendments to the Auditor-General Act 2009, including increasing the role of the Economic and Governance Committee’s oversight of QAO’s financial arrangements and management practices. While the 2023 Bill expands the role of parliamentary committee oversight of integrity bodies, it does not extend to moving the role of ministers to the Speaker, which Professor Coaldrake recommended. Approval of QAO’s budget remains with the Queensland Premier.
The 2023 strategic reviewers were appointed by the Department of the Premier and Cabinet in June 2023, and are required to provide their report within 6 months of starting the review.
Unwavering focus on quality
The overarching aims of audit quality can be summed up as the degree of excellence with which audits are consistently performed. We are focused on delivering quality audits that meet regulatory requirements, maintain the confidence of parliament and Queenslanders, and provide reliable results and insights for audit clients that lead to outcomes. Our ongoing system of quality control includes internal and external mechanisms:
- a quality assurance framework and quality risk management
- an annual quality assurance plan
- open and closed file reviews (open reviews are of audits that are underway and closed are of completed audits)
- reviews by engagement quality control officers at Assistant Auditor-General or senior director level
- reviews of our audit service providers
- development programs that incorporate learnings from the reviews
- other remedial action, including updates to our audit toolset, and guidance for our workforce.
This year, we improved our audit and assurance practices by discussing with our workforce major changes arising from new quality management standards. We revised QAO’s policies and processes to align with the requirements of ASQM1 and 2, which is the Australian equivalent of the International Standards on Quality Management.
A particular focus for us was the consistency of the services our clients experience, meaning we continued to share learnings from our quality reviews across all our staff and include our ASPs in our training programs, such as on our new data tools and our responses to key risks.
Our yearly transparency report summarises our quality assurance activities and results. We published our latest report in January 2023, and it noted that QAO has effective processes that comply with international standards. The number of unsatisfactory quality results increased over the prior year with 4 audit files from 30 files this year. This was was due to the resourcing challenges that QAO and our ASPs are experiencing. We have started work on our transparency report for 2023.
The standards by which we perform our work
Auditing and accounting standards provide guidance and establish requirements to ensure auditors’ work is high quality, based on firm evidence, and ethical. QAO performs its audits in accordance with standards issued by the Australian Accounting Standards Board (AASB) and Auditing and Assurance Standards Board (AuASB).
The Auditor-General Act 2009 requires us to table in parliament the standards by which we perform our audits – the Auditor-General Auditing Standards. These require us to adopt the standards issued by the AuASB. This year, we updated and modernised the standards to:
- clarify how we apply the standards for performance and assurance audits
- specify the expectations placed on audit service providers
- align the audit exemption criteria with new Australian Charities and Not-for-profits Commission thresholds
- include expectations for data governance
- update the section on tabling protocols to reflect the 4-year term for state government elections
- refresh the language to reflect the new Australian Standard on Quality Management.
Our 2022–23 audits all applied the revised ASA 315 – Australian Auditing Standard Identifying and Assessing the Risks of Material Misstatement. The new standard enhances auditors’ risk assessments, and we updated our audit programs to require additional testing over controls, in particular information and communication technology (ICT) controls. We supported the application of the new standard through training for our staff.
Robust audit methodologies
Audits must also follow well-designed methodologies to be effective, efficient, consistent, of high quality, and, importantly, result in outcomes.
QAO updates its methodologies, toolsets, and training materials annually, following our quality reviews and any further root cause analysis we identify. For example, in the past 2 years, we have improved how our methodologies lead us to assess and respond to audit risks, developed standardised templates for our entire workforce to use across our services, and, overall, remained innovative in our thinking.
This year, we began a review of our performance audit methodology. The coming updates will reflect recent changes in auditing standards on quality management, and internal practices for improving efficiency and effectiveness. They will also include more guidance for staff.
How we maintain confidentiality and security
QAO has a range of mechanisms, processes, and policies in place to ensure it complies with legislation, in particular the Auditor-General Act 2009 (the Act) and the Information Privacy Act 2009, on how it secures, protects, uses, and stores information.
Cyber security continues to be a primary and increasing risk for all organisations globally. At QAO, we have a range of controls in place to ensure we monitor and address any current or emerging risk before it becomes an issue. We are continuously identifying, assessing, and implementing activities to understand the risks and act.
This year, we continued to develop our information security management system to preserve the confidentiality, integrity, and availability of our information assets. We received excellent results for, and continued to work towards certification of, the international standard for information security (ISO 27001). We achieved nearly full compliance with the Australian Cyber Security Centre’s ‘Essential Eight’, with only one area remaining, which we are on track to achieve.
We also continued to work closely with Queensland Government partners on best practice in cyber security, (such as the Cyber Security Unit and CITEC) and exchange knowledge and intelligence.
We use secure systems to collect information, data, and files. This year, we continued to improve our internal processes by centralising how we manage files to reduce duplication and increase efficiencies, thus allowing us to more easily discover and reuse records.
Every member of our workforce must meet obligations under the Act on the proper and secure handling of information. This includes ensuring protected information is not divulged or made public, adhering to correct record keeping protocols, and reporting any breaches. We conducted focused engagement with our contracted ASPs to ensure they understand these requirements. We held an information session on reporting data breaches, should they occur, and we better clarified the terms and conditions in our contracts.
The education of our workforce supports their understanding of and compliance with our requirements. They undergo formal, online training in cyber security, information privacy, and confidentiality requirements under the Act.
QAO also has processes in place to assess the appropriateness of ASPs conducting additional consulting projects or non-audit work for the clients they are engaged to conduct external audits for. Our contracts specify that firms must request our permission in the first instance and we apply a rigorous assessment process that only allows such work in limited circumstances where the non-assurance work is not substantial.
A high standard of recordkeeping
Effective recordkeeping gives us confidence that we have the evidence we need to support our decisions and the results of our audit work. During 2022–23, we continued to improve by:
- establishing an Information and Cyber Governance Committee to monitor compliance against our information policies
- strengthening our data and information governance framework
- communicating roles and responsibilities in our internal policies and procedures for creating, managing, and disposing of public records
- furthering our use of, and reliance on, born-digital and digitised records
- continuing our use of electronic signatures and document approvals
- hosting an information session for our contract auditors to raise awareness of information security
- providing mandatory training to all staff, including new and existing staff
- reviewing QAO retention and disposal schedules to align with current legal requirements.
Our digitised records management approach and supporting technology ensure we can effectively operate as a paperless office. Over recent years, we have also greatly reduced the number of paper records we receive, for example, via mail. We continue to try to limit this.
6. Our financial management and performance
We aim to lead by example in holding ourselves to the high standards we expect from the public sector entities and local governments we audit, and ensuring long‑term financial sustainability. We aim to provide cost-effective and valued audit and assurance services to parliament and our fee‑paying clients.
This year’s financial performance results reflect our ongoing focus on driving efficiency and improving how we manage our operations, while grappling with employee resource fluctuations and unpredictability.
QAO continues to be financially sustainable, with a 10.7 ratio as at 30 June 2022–23. (‘Current ratio’ measures whether an organisation is sustainably balancing its assets, financing and liabilities and is a general metric of financial health). Our result indicates an excellent ability to pay our debts as they become due. Our revenue and operational expenses tracked well against our budget for 2022–23. We delivered most of our audit work as planned, with little impact on our overall financial position.
Our funding from parliament for 2022–23, received under the Appropriation Act 2022, was $7.301 million. This appropriation is allocated to reporting and advice or assistance to parliament, delivering performance audit and assurance activities, preparing our forward work plan, investigating requests for audits, and remunerating the Auditor‑General.
Our overall income from our continuing operations was $49.579 million, slightly over our budget of $46.605 million. QAO recognises the revenue from the audit fees we need to charge our clients for our financial audit services on a full cost recovery basis. Approximately 85 per cent of our revenue comes from these fees. The revenue from fees this year was $42.041 million, slightly over our budget of $39.094 million. This is due to audit work carrying over from 2021–22 due to resource shortages, and our additional work this year arising from machinery of government changes.
QAO’s total expenses from our continuing operations was $48.397 million, marginally over our original budget of $47.059 million. Over half of our expenses were employee costs at $26.456 million, which was below our budgeted $27.238 due to high staff attrition and challenges in finding suitable replacements. The increase in employee expenses compared to last financial year’s $25.396 million primarily reflects a 2.5 per cent Enterprise Bargaining Agreement (EBA) increase during the year.
Offsetting this saving in employee costs was our supplies and services expenses of $21.440 million, which was above our budget of $19.189 million. This was because we needed to engage more contract resources to deliver our work programs due to the challenges we experienced finding suitable staff.
Our other expenses were conservative, covering rent and office services, information technology or minor office equipment, and staff development.
QAO's financial statements and independent auditor's report are on pages 36–54 of this annual report and available here.