Six accounting errors of more than $20 million were made by NSW government agencies last year, costing the state $927 million, an audit has found.

The Report on State Finances 2019 released by the NSW Auditor General last week lists a litany of mismanagement and mistakes made by the state’s 304 agencies, which control assets worth $468 billion.

The good news, however, is that fewer errors in excess of $20 million were made this year compared to the previous year, when 23 boo-boos, costing $3.8 billion, were discovered in financial statements.

Incorrect application of standards and policies

Auditor General Margaret Crawford said the errors were the result of incorrectly applied accounting standards and Treasury policies, inappropriate assumptions and inaccurate data, and dodgy value assessments.

Seven agencies were also rapped over the knuckles for being slow to submit their financial statements including Sydney Metro, Sydney Olympic Park Authority and Transport for NSW.

Ms Crawford acknowledged efforts had been made to reduce errors compared with previous years, but said there was still room for improvement.

“There were fewer reported errors but earlier resolution of accounting matters is still required,” she said.

‘Mismanagement and bungling’

The report also found:

• $2.1 billion correction to the value of earthwork assets, including work on the Country Rail and Metropolitan Network, which had previously been over-estimated
• $46.2 million increase in liabilities at the Department of justice because of an accounting error
• $27 million error relating to collection assets “missed” by the Australian Museum
• $680 million written off the state’s investment with a community housing provider because of an accounting oversight
• Failure by 700 Crown Lands Reserve trusts encompassing showgrounds, cemeteries, racecourses and public areas to provide financial statements
• The $27.7 million NSW Generations fund, designed to help fund community projects,  paid $400,000 “primarily for director fees and administration costs”, but made no payments to community initiatives
• The final cost of the CBD Light Rail project is “still to be determined”, although the state has agreed to pay a settlement arrangement of $576 million to the operators of the project, on top of the upwards-revised budget of $2.1 billion

Shadow Treasurer Walt Secord said the report showed the government was bungling services and infrastructure projects across the state.

“The Audit Office has revealed basic mismanagement of government departments and accounting errors which are costing the state billions of dollars,” he said in a statement.

Review of machinery of government changes

The audit office says it is also planning a review next year of the machinery of government changes announced in April, which included the axing of the Office of Environment and Heritage and the Office of Local Government and reorganising public sector agencies into eight clusters.

“Significant MoG changes can disrupt government services and processes if risks are not identified early and promptly managed,” the report says.

“The risk of material misstatements in State and agency financial statements increases if the risks and challenges of MoG changes are not effectively managed and mitigated.”

The report, to be carried out in the second half of 2020, will assess whether the changes achieved their goals effectively and efficiently and improved public sector administration, the report says.