• Read the full report

The NSW public service does not have enough senior bean counters, the Auditor-General has said, after finding billions of dollars worth of errors and 1256 mistakes in the state’s financial records submitted last year.

Department accountants erred 14 times with figures between $20 and 50 million; there were four errors worth between $50 and 100 million; six errors between $100 million and $1 billion; and one error was greater than $1 billion, the Auditor-General’s report said.

Errors ranged from simple spreadsheet mistakes and data entry failures to errors in applying Australian Accounting Standards, the report said.

Auditor-General Peter Achterstraat made hundreds of recommendations to improve standards.

The report reiterates findings by the chief executive for the NSW Commission of Audit, Dr Kerry Schott, released on February 22, that poor performance across the board had led to the deterioration in the government’s finances and hurt the state’s overall economic performance.

The Auditor-General’s report to the NSW Parliament, released on February 29, highlighted how government agencies continue to submit financial reports for audit with numerous errors and incorrect accounting methods.

“There are insufficient suitably qualified finance personnel in many agencies, which limits their ability to establish and maintain robust internal control environments, to correctly interpret accounting standards and to produce high quality financial statements,” Mr Achterstraat said.

“I identified 1256 misstatements, 540 of which needed to be corrected by the agencies before I could issue my audit opinions. Agencies’ 30 June 2011 financial statements contained 25 individual errors each exceeding $20 million,” he said.

Mr Achterstraat also found that deficiencies in information security exist across numerous agencies, that computer system disaster recovery plans for financial systems do not exist or are out of date, and that agencies were having difficulties following their own policies and procedures.

The NSW public service is also having difficulties managing its $200 billion building and infrastructure portfolio.

“I made 76 recommendations to agencies without the necessary checks in place to effectively control and manage their assets, including acquisitions, disposals, recording, depreciation, regulations and stock takes,” he said.

Mr Achterstraat also investigated 13 allegations about waste and mismanagement at the Roads and Traffic Authority, now known as Roads and Maritime Service, on two large long-term information technology contracts worth $28 million.

The RTA paid $112,000 over two years for services that were not provided nor did it investigate allegations that it was being charged excessive prices.

“I am concerned that there has been a significant amount of the annual spend under one contract, nearly 63 per cent, on additional services … RTA has essentially set up a monopoly arrangement for the provision of these services,” he said.

“These findings on two significant contracts put in doubt whether RTA was effectively managing its IT services contracts more generally, and therefore whether it was getting value for money,” he said.

Greens MP Jamie Parker told the Herald NSW Premier Barry O’Farrell must implement the report’s recommendations.

“The fact that agencies are submitting reports riddled with errors reflects systemic problems of mismanagement and chronic under-resourcing, which won’t be solved by cutting jobs and public sector wages,” he said.

But the Auditor-General’s office is not perfect either – a press release promoting the report listed the wrong number for its media contact Barry Underwood.