On the 31 March 1993, I delivered the First Report of my Investigation into the State Bank Group. That Report comprised twenty six Chapters.

This Report, comprising thirty four Chapters, answers my Terms of Appointment as they relate to the affairs and operations of Beneficial Finance Corporation Limited and Term of Appointment B regarding the adequacy and appropriateness of the external audits of the Bank and of Beneficial Finance. The numbering of the Chapters in this Second Report follow in numerical order from the First Report.

I have, in addition, published a confidential report having regard to my Terms of Appointment.

I have provided in Chapter 27 of this Report a summary of my Findings and Conclusions as they relate to each of the specific Chapters and areas of investigation. I have also brought together the findings from those specific areas of investigation to provide an overview and summary of my Investigation.

I have in Chapter 27 mentioned the scope and conduct of my Investigation, but in order to fully appreciate the context in which my Investigation into Beneficial Finance and my examination of the External Audits has been conducted, it is necessary to refer to my First Report.

In that Report, I set out in detail the natural justice process which process I have adhered to in relation to my Investigation covered in this Report.

That a few individuals, charged with the responsibility for the administration of a major publicly owned financial institution and one of its wholly owned companies, could, in the period of a few short years, allow the creation of a situation that has contributed to one of the largest financial disasters that Australia has experienced is difficult to comprehend. It is, nonetheless, a reality.

The social and economic consequences for all who live and conduct business in South Australia are so far reaching that South Australians will be paying for the excesses of the Bank Group for many years to come.

In my Reports, I have sought to explain in detail why and how that situation arose.

I hope that the results of this Investigation will enable corrective steps to be taken to ensure that this experience is never repeated.

My Investigation has covered a very extensive range of activities of the Bank Group, but not all matters investigated have been the subject of comment in these Reports. It has been necessary to be selective having regard to my Terms of Appointment and to time and cost.

In so far as I have considered that a matter requires further investigation, I have said so in my Reports.

It will be for the Royal Commission pursuant to its Term of Reference 4 to consider my Reports and in relation to any matters therein to make any recommendation as to whether any matter should be referred to an appropriate authority with a view to further investigation or the institution of civil or criminal proceedings.

In my First Report I referred to the outstanding commitment of the members of my own staff and consultants who have assisted me in the course of this Investigation. It is not necessary to repeat what was said on that occasion other than to record my deep appreciation to each of them for their loyalty, competence, and cheerfulness, in what has been a most demanding Investigation.

I again wish to acknowledge with appreciation the support of State Print, and, in particular, those officers who assisted in the production of this Report.

K I MacPHERSON
Auditor-General