Marco teórico referente a la población de estudio

($million)

Distribution business

Reduction in franchise fees (a)

Payments by the SECV Citipower 5.58 - Eastern Energy 4.60 21.87 Powercor - 19.98 Solaris 8.30 - United Energy (b) 6.50 - Total 24.98 41.85

(a) While the introduction of the Winter Power Bonus Scheme and the termination

6.50 Under the termination arrangements, the businesses have undertaken not to pass-on to customers the cost of any sales tax incurred on goods acquired up until 31 December 2000, except where the rate of sales tax is increased for these goods, or where goods which are currently exempt or not subject to sales tax become taxable as a result of changes in relevant legislation, or where there are other changes in sales tax law which effect sales tax payable. Other key terms of these arrangements were as follows:

l the businesses agreed to lodge with the SECV by 30 September 1998 a final claim

for sales tax incurred for the period to 30 June 1998;

l the businesses agreed not to acquire goods on or before 30 June 1998 that would

not have been acquired but for the termination of the sales tax agreement; and

l certain refunds paid to the businesses for sales tax associated with goods purchased

on or before 30 June 1998 must be repaid to the SECV, however, the businesses are entitled to retain sales tax refunded relating to transactions post-1 July 1998. 6.51 The SECV has recognised a provision of $47 million in its financial statements as at 30 June 1998 relating to estimated sales tax reimbursement claims from the businesses for goods acquired on or before 30 June 1998.

Reporting of consultancy and contractor services

6.52 My May 1995 Report on Ministerial Portfolios outlined the results of an audit review of the utilisation of consultants within the Victorian public sector. That review identified that inconsistencies existed at agency level regarding the interpretation of what constituted “consultancy services” compared with “contractor services”, which resulted in some uncertainty regarding the actual level of expenditure incurred by agencies on consultants, which is required to be reported within agency annual reports.

6.53 Subsequently, in June 1995, the Government revised its Guidelines for the

Engagement and Management of Consultants and enhanced the definition of

consultancy and contractor services, including the illustrative examples of such services included in the guidelines to assist agencies in the interpretation of the definition. However, as identified in my May 1996 Report on Ministerial Portfolios, prior to the revision of the guidelines, my Office raised certain concerns relating to one example which was included in the guidelines, which was considered to be ambiguous and could lead to an understatement of reported expenditure on consultancy services. The example referred to, which was classified within the guidelines as a contractor service, was as follows:

“An organisation engaged to implement government decisions to corporatise or

6.54 It was recommended by audit that the Department should clarify the abovementioned illustrative example within the government guidelines as, in audit opinion, the example was ambiguous, in that private providers could be engaged to implement high level privatisation, corporatisation or other policy decisions, involving the provision of expert advice or analysis of various implementation options. In cases involving the provision of expert advice or analysis of options, it was audit’s view that such engagements would be more appropriately classified as consultants. At the date of preparation of this Report, this matter had not been clarified within the Government’s guidelines.

6.55 In relation to the reporting of consultancy services, the government guidelines and ministerial directives issued under the authority of the Financial Management Act 1994 require public sector agencies to disclose the following information within their annual reports to the Parliament:

l for consultancies during the year costing in excess of $50 000, a schedule listing

the consultants engaged, particulars of the project involved, the total fees incurred and future commitments in relation to each consultancy; and

l for consultancies during the year costing less than $50 000, the aggregate number

and cost of these engagements.

6.56 Similar annual reporting requirements have not been established for contractor services engaged by public sector agencies. However, the Victorian Government Purchasing Board, within the Department of Treasury and Finance, advised that during the 1998-99 financial year it is intended to seek an amendment to the Directions of the Minister for Finance under the Financial Management Act 1994 to require departments to report on all contracts with a value in excess of $100 000, including consultancy and contractor services.

6.57 Given the increasing trend within the public sector for service delivery through contractor services and outsourcing arrangements, and the increasing impact of such services on agency financial operations, it is important that appropriate annual reporting requirements be introduced in relation to contractor and outsourcing services, to complement the existing reporting requirements relating to consultancy services.

o RESPONSE by the Secretary, Department of Treasury and Finance

The 1997-98 Annual Report of the Victorian Government Purchasing Board recently tabled in the Parliament contains extensive data on the contracts issued in the State. This initiative recognises the growing significance of contracted services to the operation of State-funded services.

As indicated by the Auditor-General, proposals for broadening the scope of annual reporting in respect of contract services is under consideration. The VGPB Annual Report 1997-98 is the first manifestation of this approach. Implementation of more detailed reporting should only proceed once the volume of contracts to be reported and the utility of the information provided has been assessed. Such an assessment should also consider the merit of maintaining a distinction between the concepts of

“contractors” and “consultants”. This could overcome the Auditor-General’s

concerns about possible ambiguity in application of the definition.

A review of the relevant Ministerial Directions is scheduled to be conducted in the course of the year with a view to making any amendments in sufficient time for incorporation in annual reporting requirements for 1998-99.