'Awful waste': school building audit finds $664m reduction in value
The cost to replace new public school buildings in NSW would be $664 million less than what was paid for them under the federal government's Building the Education Revolution program, a new audit has found.
The NSW Auditor-General found the NSW Department of Education's revaluation figures showed the replacement cost of some buildings after revaluation was up to 84 per cent lower than actual costs for the BER buildings.
Minister for Education Adrian Piccoli said $664 million could buy 20 new primary schools and nine new high schools.
"This is just further evidence of the awful waste under Labor's BER program," he said.
Auditor-General Peter Achterstraat said the significant decrease in replacement cost in the department's revaluation of BER buildings - from $1.89 billion originally to $1.23 billion now - may be due to the actual costs paid for them being too high.
Another possible explanation was that construction prices may have been higher at the time of construction or replacement cost rates used in the revaluation process may be incorrect.
Mr Achterstraat said he found the department could not substantiate the results of its revaluation of 27,000 buildings at schools, TAFE colleges and new BER buildings.
"There were flaws in the process used and more work is needed to support the values recorded," he said.
"This work may confirm the value of the buildings is correct or it may highlight shortcomings in the revaluation process."
A spokesman for the Department of Education and Communities said the department has addressed some of the audit concerns.
KPMG has been engaged to independently review the methodology used to carry out the revaluation to ensure the department complies with accounting standards.
A steering committee has also been established including senior staff from the Department of Education, NSW Treasury and the Department of Finance and Services.
"The NSW Audit Office will be invited to monitor project progress and governance," the spokesman said.
"A dedicated project team – independent from core operating activities – has been established to implement the revaluation for 2012-13.
"That project team will report regularly to the DEC Executive, the Audit and Risk Committee and the Minister for Education."
Greens NSW MP John Kaye said the former NSW Labor government ‘‘squandered a once-in-a-lifetime opportunity to create world-class public education buildings’’.
‘‘By allowing the head contractors to skim off large profits and by also refusing to listen to the teachers and the community, many public schools ended up with a lot less than they might have had.
"It looks like more than $660 million was wasted. Parents, teachers and students will be left wondering what they could have achieved for their school with the additional funds.
"The bureaucrat charged with getting value for money out of the BER was the then head of the Department of Education and Training, Michael Coutts-Trotter ... who was subsequently promoted by the O'Farrell government to lead the Department of Finance and Services.
"In the new year I will be asking the Education budget estimates committee to convene an inquiry into NSW's BER spending."