As discussed in Part 4, our review of fraud risk assessment and control monitoring at the 11 technical and further education (TAFE) institutes was based on the Controlling fraud and corruption: a prevention checklist, issued by the Independent Broad-based Anti-corruption Commission (IBAC) in November 2013.
The key components of a good fraud control framework are shown in Figure D1.
Figure D1
Fraud risk and control monitoring checklist
Element of framework |
|---|
Figure C1 shows the indicators used in assessing the financial sustainability risks of TAFEs in Part 2 of this report. These indicators should be considered collectively, and are more useful when assessed over time as part of a trend analysis.
Figure C1
Financial sustainability risk indicators
Indicator |
Formula |
Description |
|---|---|---|
Net result (%) |
Net result / Total revenue |
Figure B1 shows the risk ratings applied to management letter points raised during an audit review.
Figure B1
Risk definitions applied to issues reported in audit management letters
Rating |
Definition |
Management action required |
|---|---|---|
Extreme |
The issue represents: |
Figure A1 lists the 12 technical and further education (TAFE) institutes and their 16 controlled entities, which formed the TAFE sector at 31 December 2015.
Figure A1
TAFE sector entities at 31 December 2015
Entity |
|---|
|
Bendigo Kangan Institute of Technical and Further Education
Box Hill Institute of Technical and Further Education |
An effective fraud control framework plays a significant role in reducing the risk of fraud and should be a central component of a technical and further education (TAFE) institute's risk management activities.
TAFE fraud control frameworks are too narrow in scope and do not consider all types of fraud that a TAFE might face. This means that TAFEs are exposed to potential fraud risks that they might not be mitigating.
For 31 December 2015, technical and further education (TAFE) institutes were required to report on the key performance indicators detailed in their annual Statement of Corporate Intent, as agreed with the minister at the start of the year.
At 31 December 2015, the technical and further education (TAFE) sector, consisting of 11 TAFEs and 16 controlled entities, made a net surplus of $37.2 million ($83.1 million deficit in 2014). Federation Training has been excluded from this analysis.
This report provides information on the outcomes and findings of the 2015 financial audits of 11 technical and further education (TAFE) institutes and the 16 entities they control. Appendix A details the entities covered in this report.
The twelfth TAFE, Federation Training, is excluded from all sections of this report, as the audit of its 2015 financial report has not yet occurred. Section 1.3.2 has more information about Federation Training.
|
Dr Peter Frost Acting Auditor-General |
Audit team Simone Bohan—Engagement Leader Helen Grube—Team Leader Ryan Ackland—Team member Engagement Quality Control Reviewer Ronald Mak |
Ordered to be published
VICTORIAN GOVERNMENT PRINTER May 2016
PP No 157, Session 2014-16
Dear Presiding Officers