Sydney Diocesan Secretariat Audit

33. Mr Ian Cousins asked –

With regards to the Sydney Diocesan Secretariat Audit Accounts for 2004

1. Is the audit tendered for each year or each three-year period? If not, why not?
2. What was the principal reason for a rise of 82% in audit fees in 2004 from 2003 to $496,000.
3. Why was this increase not forecasted by the Diocesan Audit committee?
4. What processes have the Sydney Diocesan Secretariat by its Audit Review Committee taken to reduce this cost in 2006 and 2007?
5. What were the other services provided to the Sydney Diocesan Secretariat regarding the increase in fees of 715% to $183,000? Is this forecast rise the same amount or percentage in 2005 and 2006?
6. What are the total fees paid to PricewaterhouseCoopers for Accounting Actuarial, and Audit Services in 2003, 2004 and 2005 for all entities, agencies, schools, corporations, that the Diocesan Secretariat has responsibility for?
7. Is the Sydney Diocesan Secretariat considering fixed priced audits for 2006?
8. What provisions for incentive payments are there in the draft accounts for 2005 and forecast for 2006? Are they budgeted to rise again in 2005 by a similar percentage of 62% (in 2004 $809,000 and in 2003 $499,000)?

To which the President replied -

I am advised that the answers are as follows –

1. The SDS audit is not put to tender at particular intervals. The Board of the Secretariat is satisfied that the audit fees paid by SDS are significantly less than would be paid by a similarly complex commercial firm.
2. The primary reason for the rise in audit fees was a significant delay in production of audit ready accounts for the smaller entities for which SDS is responsible.
3. This is not a function of the Diocesan Audit Committee.
4. The Board of the SDS as a whole has instituted the following improved processes:
   • A new general ledger has been successfully installed and is now operating smoothly.
   • For the 2004 audit, a specialised contractor was appointed to speed up the accounts review process.
   • Business accounting processes have been streamlined to reflect modern practice for an accounting office servicing multiple clients.

   In addition, the Board’s approach to culture change has resulted in a significantly improved level of staff continuity which in turn will lead to a more settled audit process.

5. Other expenses per SDS accounts 2004 –

   New Capital Project	$86,714
   BAS/GST review (one off project)	58,410
   Presbyterian Super (included in fees charged) 37,290	7,290
   	1,100 3
   FBT	$183,514

   Fees are not forecast to rise substantially but this is very dependent on the New Capital Project and costs associated with the restructure of GAB’S investment operations.

6. Total fees paid to PricewaterhouseCoopers -

   2003	$506,120
   2004	$915,263
   Year to Date 2005	$899,735

   2003 $506,120 
   2004 $915,263 
   Year to Date 2005 $899,735
   
   These fees will fall substantially from 2007 as the impact of the restructure in GAB takes effect.
7. No.
8. The budget for 2005 is $461,000. The expectation of the Board is that following restructuring of the Glebe Board’s investment operations, incentive payments will fall sharply.