Financial Statements Analysis of Public Bodies – NSWMA
The Public Bodies Management and Accountability Act (PBMA) requires public entities to demonstrate prudent financial management of public resources. To assist Parliament and the Public Accounts Committee (PAC) in their review of the financial performance of public bodies, we reviewed the financial statements of the National Solid Waste Management Authority Limited (NSWMA) over a five-year period, in the context of the Fiscal Responsibility Framework (FRF). We calculated ratios of key financial items in the balance sheets and income statements of the entity, merely to analyse trends. However, we did not conduct an audit of the financial statements of the entity and hence did not test the management’s assertions regarding the figures in the financial statements and disclosures.
This Financial Statements Analysis (FSA) of NSWMA provided valuable insights for our performance audit that was tabled in July 2022. The FSA revealed that NSWMA’s net profits over the review period, FY2016/17 to FY2020/21 was primarily enabled by Government Subvention income, which accounted for 89.0 per cent of total revenue. Additionally, NSWMA’s liquidity position was adversely impacted by increased trade payables and reduced receivables from Commercial contractors. Accordingly, it is important that NSWMA takes steps to improve its income generating capacity and manage its receivables and payables, while pursuing promulgation of the Regulations that support the NSWM Act.