Additional Disclosures

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Additional Financial Disclosures

FINANCIAL TARGETS: ACTUALS COMPARED TO BUDGET

The following table provides a comparison of the financial targets and outcomes against criteria included in the Resource Agreement between the Commissioner of Main Roads, Minister of Transport and the Treasurer.

(1) As specified in the Budgets Statements.

(2) Further explanations are contained in Note 10 'Explanatory statements' to the financial statements.

1. The variation in Total Cost of Services is mainly due to:
   • - Supplies and services increased by $41.371 million mainly due to higher level of road maintenance works than anticipated. This included Pavement Repair program and bridge on Roy Hill Munjina Road.
   • - Grants and subsidies is higher than anticipated by $77.2 million due to an increase in spending on the Local Government network and Metronet related works (Thornlie Cockburn Link & Yanchep Rail Extension).
   • - Other expenses is higher than anticipated by $54.5 million due to additional road assets being retired as a result of road realignments and new projects.
2. The variation in Net Cost of Services is mainly due to:
   • - An increase in Total Cost of Services as outlined above.
3. The variation in Total Equity is mainly due to:
   • - The Infrastructure Asset value was underestimated by $3.400 billion compared to the Original Target.
4. The variation in Salary Expense is mainly due to:
   • - A reduced number of staff members taking leave due to COVID-19 international border impacts.
5. Main Roads did not borrow any funds during the 2021-22 financial year.

f) The variation in Working Cash Limit was a result of more Commonwealth Milestone Revenue received because of capital project milestones being achieved earlier than anticipated.

Capital Works

All disclosures in relation to capital works are included in the Financial Statements and Notes. Our annual Strategic Asset Plan details our 10-year investment needs and drivers. The Strategic Asset Plan adheres to the Department of Treasury's Strategic Asset Management Framework. Each major capital project follows the national Austroads project evaluation methodology where a Benefit Cost Ratio (BCR) is calculated incorporating quantifiable economic data and is supplemented by simplified economic, environmental and social assessments. The BCR records information on the benefits of a project on travel time savings, vehicle operating costs and smoother travel, safety and maintenance. Other benefits and costs are considered via a multi-criteria analysis. Capital works financial progress is reported to the Corporate Executive monthly. Indirect economic benefits are now being measured to assess the wider positive impacts delivered to the economy through enabling infrastructure. We have adopted a post project evaluation framework endorsed by Australian Transport Assessment and Planning and is a key feature of ISCA.s Rating Tool, V2.0 to measure project success.

Ethical Procurement

The Western Australian Procurement Act 2020 (the Act), and Western Australian Procurement Rules (the Rules) came into full operation on 1 June 2021, replacing the State Supply Commission Act 1993 and Policies. Our procurement processes comply with the new requirements and continue to be certified to ISO 9001:2015. An ongoing compliance program is in place to ensure these policies and procedures are adhered to.

In addition to this, we introduced periodical integrity data analytics reviews to enhance the compliance program and any findings are addressed.

A Tender Committee, consisting of two experienced senior officers from our organisation and two senior external government officials, provides additional assurance that procurement actions comply with policies and standards for high-risk and potentially contentious procurements. External probity auditors are engaged for large, complex or controversial procurement activities.

Social and Sustainable Procurement

The Government introduced the Western Australian Social Procurement Framework to enable improved social, economic and environmental benefits by leveraging government's procurement activity to improve community outcomes.

The Framework brings together all the state's social and sustainability policies and in conjunction with the Social Procurement Framework Practice Guide gives a clear message that social procurement forms part of value for money decision making. We have a range of practices and internal policies in place to deliver sustainable and social procurement outcomes that exceed the state's requirements.

• - We have exceeded the requirements of the State Aboriginal Procurement Policy mandated targets with 43 contracts being awarded to registered Aboriginal business at a value of $19 million.
• - We had minimum mandatory targets for Aboriginal employment and business engagement in our major works contracts. During the year, 586,740 hours were worked by Aboriginal people on our contracts, with an Aboriginal business spend of $86.4 million.
• - The WA Government's Buy Local Policy is applied in the evaluation of tenders and requires the successful contractor to report monthly on Buy Local commitments.
• - The Western Australian Industry Participation Strategy is applied to all contracts that meet the value thresholds. Tenderers are required to submit participation plans to detail employment and local subcontracting opportunities that will arise if awarded the contract.

Procurement Grievances

Our procedure for dealing with procurement grievances is referenced in all tender documents and is accessible from our website. Endorsed by the Western Australian Road and Rail Construction and Maintenance Industry Advisory Group, the procedure provides for a customerfocused, fair, structured and relationship-based approach to reviewing grievances lodged by contractors. Only one grievance was received during the year confirming our procurement processes continue to be fair and equitable.

Unauthorised Use of Credit Cards

We hold 564 corporate credit cards with transactions reviewed for personal use by incurring and certifying officers during statement processing.

During the financial year there were 26,314 credit card transactions totalling $10,333,154.48, of which 34 transactions totalling $1,498.27 were found to be for personal expenditure.

• - All transactions were accidental use of the corporate card instead of a personal card and have been repaid by the cardholder.

Due to the nature of the personal expenditure in each instance, no disciplinary action was deemed to be required.

Pricing Policies of Services Provided

Our supply of goods and services represents works and services carried out for other public sector and private bodies on a cost recovery basis. Details are available in the notes to the Financial Statements. Relevant pricing policies we set are developed in accordance with the Department of Treasury's Costing and Pricing Government Services Guidelines.

Statement of Expenditure

In accordance with Section 175ZE of the Electoral Act 1907, Main Roads incurred expenses of $431,268.00 during 2021-22 in advertising, market research, polling, direct mail and media advertising. Expenditure was incurred in the following areas:

Additional Environmental and Sustainability Disclosures

INFRASTRUCTURE SUSTAINABILITY RATING STATUS

We use the Infrastructure Sustainability (IS) Rating Scheme to evaluate sustainability within our highest value major projects. We have mandated that all projects greater than $100 million will be formally registered to undergo an IS rating. The table below indicates the status of our registered ratings across the project phases of planning, development, design and construction.

We are seeking to expand sustainability practice within our projects. Main Roads' participation as a Pioneer Partner in the Infrastructure Sustainability Councils IS Essentials tool will potentially help facilitate a sustainability rating scheme suitable for smaller infrastructure projects and lead to improved outcomes in the civil construction sector both for Main Roads and for local governments. Main Roads currently has four projects registered for IS Essentials. These are Great Eastern Highway Wooroloo Upgrade; Great Northern Highway - Apple Roundabout; Smart Freeways Mitchell Southbound Reid Highway to Vincent Street; and the Causeway Pedestrian and Cyclist Bridge.

EMISSIONS BY TYPE DUE TO OPERATIONS AND CONGESTION

A cloud-based data factory has been developed to collate and report road network performance data across major roads in metropolitan Perth. This is part of a commitment to develop a data-driven approach, based on agreed performance metrics and targets for addressing congestion.

The data system collates speed and volume information from multiple data sources across the 4,300 links, which currently represent the Perth major road network. Data is recorded on each link for every 15-minute interval dating back to January 2013. This system has been named the Network Performance Reporting System (NetPReS). Using the Australian Transport Assessment and Planning Guidelines 2016 published by the Transport and Infrastructure Council, NetPReS data has been used to estimate emissions trends on state roads and significant local roads in the Perth metropolitan area.

We directly manage the traffic flow of vehicles, a flow with environmental impacts, including carbon emissions and air quality, through road network use. The following tables reflect the impact of roads we directly manage on energy use and emissions and they give an indication of impact on air quality.

Annual Emissions due to Operations
Estimates for Perth Metropolitan State Road Network and Significant Local Roads

Annual Emissions due to Congestion
Estimates for Perth Metropolitan State Road Network and Significant Local Roads

EMISSIONS METRICS

* Note: Air travel, project and maintenance fuel usage and waste are Scope 3 emissions

IMPORTED ROAD CONSTRUCTION MATERIALS

IMPORTED RECYCLED CONSTRUCTION MATERIALS

WASTE MATERIALS TO LANDFILL (WASTE)

MATERIALS RECYCLED

Data is based on the calendar year

WASTE MANAGEMENT: ROADSIDES, BUILDINGS AND FACILITIES

From design, construction, operation and management perspective, we continue to incorporate improved waste management practices in our offices and depots. Design and construction of offices and depots incorporates waste management principles to achieve Green Star and 5-Star NABERS ratings (National Australian Build Environment Rating System). Construction contractors are required to follow specific waste management practices.

From an operational perspective, the separation of general office waste and recyclables is encouraged by providing paper recycling bins (240 L bins in utility areas and smaller bins in office spaces), battery recycling containers and printer cartridge recycling. Documents that contain sensitive or confidential information are collected in secure bins and are then able to be shredded and recycled. Waste collection contractors provide reports on the volumes of general and recyclable waste collected.

A waste separation trial has been successfully completed in our head office at the Don Aitken Centre cafe. This will be rolled out to the building in 2022-23, creating centralised collection points for organics, co-mingled recycling and general waste, plus the removal of individual waste bins at workstations.

The reduction of single use plastics continues to be encouraged, with the use of alternative bin liners, replacing disposable cups with a biodegradable paper product and removing plastic cups from some areas altogether.

Waste avoidance strategies in our office facilities include:

• - setting printers and photocopiers to print on both sides by default
• - encouraging electronic files rather than hard copy
• - encouraging the use of ceramic cups, crockery and cutlery (with the exception of sharing these items during the COVID-19 period) rather than disposable products
• - providing mechanical hand dryers as an alternative to paper towel.

Our operational depots also support good practice waste management initiatives by separating different waste categories and either recycling or disposing as appropriate. Depot waste may be a by-product of the depot activities (such as from laboratories) or temporary storage of waste from road projects or maintenance. Our depots have waste management plans for asbestos, concrete, steel, aluminium, batteries and waste oil. Recycling and disposal opportunities depend on the availability of these services in the region the depot is located.

We collaborate with key stakeholders and community groups to reduce litter and illegal dumping through greater community and state and local government agency buy-in. We continue to implement our Litter Prevention Strategy for Western Australia 2020-25. This follows an earlier strategy developed with the primary objective of educating road users to take litter with them, rather than leave it behind. The strategy aims to reduce littering and illegal dumping and has key focus areas of roadsides, rest areas, illegal dumping, loose loads and abandoned vehicles. Implementing the strategy involves boosting public awareness as well as increasing community buy-in and participation in litter reduction programs and behaviours. To facilitate this objective we provide a $30,000 annual sponsorship to Keep Australia Beautiful.

STAKEHOLDER MAP - STAKEHOLDER INCLUSIVENESS

We engage with two broad categories of stakeholders, adjusting our engagement approach to meet their needs.

PROJECT STAKEHOLDERS

Project stakeholders are a person, business, organisation or group, interested in or impacted by a project or initiative we are undertaking. Initial identification occurs during the planning stages of a project and new stakeholders are identified through the project lifecycle based on their interest or impact. Project stakeholders can vary from project to project and are tracked and managed in our Customer Relationship Management System (CONNECT).

CORPORATE STAKEHOLDERS

Corporate stakeholders are a person, business, organisation or group interested in or impacted by our agency who may partner with us and influence or hamper the work we do. Corporate stakeholders are identified using an annual process involving internal stakeholders across the entire organisation.

Timing of the process aligns with Main Roads business planning cycle, to ensure that stakeholder engagement is a key enabler of business plans at all levels.

OUR APPROACH TO STAKEHOLDER ENGAGEMENT

We have adopted the AA1000 Stakeholder Engagement Standard 2015 (AA1000SES) to help us design, implement and assess quality stakeholder engagement delivering integrated, sustainable outcomes.

Our engagement principles of Inclusivity, Materiality and Responsiveness are based on AA1000SES. We have also adopted the principle of Completeness to align with our commitment to sustainability, driven by the Global Reporting Initiative.

The AA1000SES principles, as seen below underpins our engagement process to ensure we can effectively manage expectations about how feedback and involvement will influence decision-making, while considering project, commercial and political realities.

Frequency of engagement with each project stakeholder group depends on the specific concern or method of engagement identified in the Project Communications and Engagement Strategy. Each engagement is tracked and managed through our Customer Relationship Management System. Corporate stakeholder type and frequency of engagement is identified in the annual Corporate Stakeholder Engagement Action Plan and is dependent on the stakeholder concern and priority level.

PROJECT STAKEHOLDER CONCERNS

Project stakeholder concerns are unique to each project and identified during the stakeholder engagement planning process. These concerns are determined using a desktop approach that interrogates media, ministerial and customer data sources, and usually depend on the risks associated with the project. Responses to topics and concerns are articulated in the project Communication and Engagement Strategy, which differs from project to project.

CORPORATE STAKEHOLDER CONCERNS

We determine corporate stakeholder concerns using a biennial materiality review, performed in accordance with the Global Reporting Initiative. The review draws from our corporate and legislative requirements, key risks, media and ministerial topics and peer reporting practices to determine what is important to our stakeholders. To view the broad current concerns and how they are being addressed, refer to the Addressing our Material Issues section of this report.

LAND ACQUISITION FOR ROAD PROJECTS

In instances where extra land is required to improve existing roads or to provide new transport corridors, land is acquired by negotiation or 'formal taking action' under the powers in the Western Australian Land Administration Act 1997. The process of acquiring land can have significant community and social impacts. We aim to commence acquisition of land two years prior to construction. Landowners have certain rights under the Act, such as the ability to object to the land take proposal and are entitled to compensation. Further information is available on our website.

Additional Governance Disclosures

OUR LEGISLATION

The Main Roads Act 1930 (WA), as amended, establishes the Commissioner of Main Roads as a corporate body and sets out the powers and duties of the office. The Act also has subsidiary legislation under it, namely the Main Roads (Control of Advertisements) Regulations 1996 (WA) covering Main Roads powers with respect to advertisements in or near the road reserve and the Main Roads (Engineering Cadets) Regulations 1982 (WA) covering the selection of cadets and other particulars. Additional Western Australian legislation guiding, and empowering Main Roads includes:

• - the Land Administration Act 1997 (WA) provides powers for the resumption of and entry onto land
• - section 131 of the Road Traffic (Administration) Act 2008 (WA) makes those responsible for damage to the road jointly and severally liable to Main Roads for damages
• - Regulation 297 of the Road Traffic Code 2000 (WA) provides the Commissioner with the power to erect road signs, traffic signals and install road marking and allow an authorised body to do certain related things
• - regulation 291 of the Road Traffic Code 2000 (WA) allows Main Roads to temporarily close a road subject to certain conditions
• - section 40 of the Road Traffic (Vehicles) Act 2012 (WA) provides the Commissioner with the authority to give an access approval for a complying restricted access vehicle to be on a road
• - section 33 of the Road Traffic (Vehicles) Act provides the Commissioner with the authority to modify a mass or dimension requirement, as provided in the Regulations. The Road Traffic (Vehicles) Act 2012 (WA) contains a variety of powers related to heavy vehicles including the power to give an access approval (section 40), accreditation of persons in relation to heavy vehicles (Division 4)
• - Road Traffic (Events on Roads) Regulations 1991 (WA) set out approvals required from the Commissioner of Main Roads or their delegated authority with respect to events on roads.

We have processes and controls in place ensuring our compliance with other state and Commonwealth legislation and regulations impacting on our activities.

MINISTERIAL DIRECTIVES

There were no directives issued during the year by the Minister for Transport under section 19(b) of the Main Roads Act 1930 (WA), as amended.

FREEDOM OF INFORMATION

The Freedom of Information Act 1992 (WA) gives a general right to apply for access to documents held by government agencies. An information statement in accordance with the requirements of the Freedom of Information (FOI) Act is available on our website. This statement provides a guide on how to apply for access to documents, as well as information about documents that may be available outside of the FOI process. During the year, we received 61 FOI applications. Enquiries on FOI can be emailed to: foi@mainroads.wa.gov.au.

CUSTOMER PRIVACY

Main Roads as with all Western Australian Government agencies, is not subject to the Privacy Act 1988 (Cwlth) and to date we do not have an equivalent statute. However where possible, we adhere to the Australian Privacy Principles set out in Schedule 1 of the Privacy Act. Work is being conducted by the Department of Premier and Cabinet to introduce new whole-of-government privacy and responsible information sharing legislation for the Western Australian public sector. We value the privacy of our customers and comply with the CCTV Usage Policy that outlines appropriate use and we do not automatically record on our CCTV cameras. We also operate in accordance with the Surveillance Devices Regulations 1999 (WA). Our approach to privacy is available on our website.

PUBLIC INTEREST DISCLOSURES

We are committed to the aims and objectives of the Public Interest Disclosure Act 2003 (WA). We recognise the value and importance of contributions by staff to enhance administrative and management practices and strongly support disclosures being made by staff regarding improper conduct. The Public Interest Disclosure Guidelines are available on iRoads to all staff.

CONFLICTS OF INTEREST AND ACCEPTANCE OF GIFTS

Our Code of Conduct and Integrity Framework require all employees to ensure personal, financial, and political interests do not conflict with our performance or ability to perform in an impartial manner. Where a conflict of interest occurs, it should always be resolved in favour of the public interest rather than personal interest.

Where a conflict of interest (whether actual, potential or perceived) has been identified, strict procedures must be followed, including declaration to the Manager Legal and Insurance Services.

We also have a confidential Conflict of Interest Register that is maintained by the Manager Legal and Insurance Services.

Each Corporate Executive member signs a representation memorandum addressed to the Managing Director that includes a section on personal interests in our contracts. The Chief Finance Officer, Managing Director and Accountable Authority then sign a Management Representation letter to the Auditor General addressing various categories including Internal Controls and Risk Management.

To ensure compliance with the Australian Accounting Standard AASB 124, a Related Party Transaction Declaration is signed by all senior officers declaring personal details, controlling interests and transactional details. These records are audited to ensure Internal Control processes are consistently managed.

Our Integrity Framework states that Main Roads' employees and contract personnel engaged by Main Roads must not:

• - be influenced, or perceived to be influenced by the offer or receipt of gifts or benefits or hospitality
• - engaged in actions where a conflict of interest (whether perceived, potential or actual) arises in the course of their duty or contract obligations.

All gifts and benefits received or refused must be declared in the Gifts and Benefits Register that is maintained by the Manager Legal and Insurance Services.

INTEGRATED MANAGEMENT SYSTEM

Our Integrated Management System brings together our third-party certified systems and processes into a single framework. During the year we undertook a surveillance audit confirming we continue to comply with all requirements.

Current Certification