Page 2879 - Week 09 - Tuesday, 19 September 2006
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MR STANHOPE: I move:
That the Assembly authorises the publication of the Auditor-General’s reports Nos 5/2006 and 6/2006.
I seek leave to make a statement in relation to Rhodium Asset Solutions.
Leave granted.
MR STANHOPE: The Auditor-General has tabled a performance audit report of Rhodium Asset Solutions. I wish to make a statement concerning the government’s response to the report. As members would be aware, in June this year the government agreed that it would be desirable for concerns about Rhodium’s operations to be reviewed by the Auditor-General.
This followed specific matters being raised about certain financial management and staffing practices that took place before the resignation of the former chief executive officer in March 2006. The resignation came at the time the board was investigating allegations by a former employee that there had been inappropriate expenditure involving Rhodium funds.
The board took immediate steps to investigate the allegations by engaging KPMG to conduct an independent review. This review was completed on 15 March 2006. These initial investigations led the board to decide that a more wide-ranging review should be undertaken by KPMG.
The terms of reference for the second review were developed with the assistance of the Auditor-General’s Office. The investigations commissioned by the board found that there were a number of control weaknesses at Rhodium, particularly around the use of credit cards and the approval of travel and hospitality.
The board addressed these matters as a matter of urgency, and further controls and policies were put in place by Rhodium before the commencement of the performance audit by the Auditor-General. The board also referred the findings of the reports by KPMG to the government, to the Auditor-General and to the Australian Federal Police, the latter because there were concerns about the potential misuse of moneys for personal gain without proper authority. It was against this backdrop that the Auditor-General was requested to undertake the audit review of Rhodium in June.
The government is strongly committed to the highest standards of integrity in the management of territory-owned corporations. It is deeply disappointed by the significant deficiencies in the management of Rhodium reported by the Auditor-General and the failure of former senior managers of Rhodium to meet their fundamental responsibilities. The performance audit report shows that former senior management failed to ensure that company funds were managed prudently and efficiently, and that staffing decisions were not based on proper procedures.
In particular, the performance audit raises serious concerns around the use of credit cards, including the use of corporate credit cards for personal expenses. The report also
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