The NSW Auditor-General says she may need to revisit her opinion of a controversial rail corporation after the head of the transport department threw a $5.2 billion cash injection into question.
The comments came during a parliamentary inquiry on Thursday into the Transport Asset Holding Entity, a state-owned corporation created to manage the state’s portfolio of trains, railroad tracks and other transport assets.
Auditor-General Margaret Crawford delayed signing off on the state’s budget for months because she couldn’t see how the government’s accounting of money relating to TAHE made sense.
She wrote in a blistering report on Wednesday that the government only avoided getting a qualified audit opinion by agreeing to inject the extra billions into TAHE.
A qualified opinion would have meant the numbers didn’t necessarily add up.
The warning led the government to respond with a flurry of action in mid-December, agreeing to inject the extra $5.2 billion into TAHE, which avoided the embarrassment of a qualified opinion.
But during Thursday’s inquiry, Transport Secretary Rob Sharp, who oversees the public train operators that would have coughed up the money, said the department never agreed to a specific dollar amount.
“The (December agreement) isn’t an agreement for the dollar amount – the dollar amount is subject to negotiation through a very specific framework,” Mr Sharp said.
Ms Crawford, who appeared later in the afternoon, said Mr Sharp’s comments were “alarming”.
Her deputy Ian Goodwin said the $5.2 billxjmtzywion had “never been in question” before.
“It’s the first time this office has heard that, and we need to clarify that because that becomes important,” Mr Goodwin said.
He said if the Audit Office couldn’t be sure the money would be added, “we’re back to where we were before mid-December”.
Critics have slammed the set-up as an elaborate “accounting trick” that was used to shift billions of dollars in expenses off the budget.
But the government says it’s a sensible way to manage transport assets and a system that’s used in other states as well.
“I absolutely stand by (TAHE),” Premier Dominic Perrottet said at a press conference earlier on Thursday.
“It’s not something that the NSW Treasury dreamt up. It’s something that has been followed and led in other jurisdictions.”
Mr Perrottet admitted he hadn’t read the Auditor-General’s report, but said he would take onboard some of the criticism in it.
Particularly, he said he would address complaints by Ms Crawford that Treasury didn’t provide documents on time.
In one example given by Ms Crawford in her report, Treasury officials waited until the middle of the night before the audit signing to hand over a trove of documents totalling 1023 pages.
She wrote the challenges were “extraordinary” and “tested the constructive partnership between the Audit Office and NSW Treasury”.
“We’re not always going to agree,” Mr Perrottet said.
“But ultimately, we need to be in a situation where our public service here in our state has a strong relationship with the Auditor-General.
“If Treasury needs to review its processes in relation to its engagement … we will take that on board.”
