The report shares outcomes of an audit on Victoria's financial report and an independent perspective on the state's financial outcomes and risks to fiscal sustainability. It also shares the audit outcomes of state-controlled material entities that make up significant parts of the state's finances. The audit opinions provide confidence that the financial reports of the state and material entities are reliable to use and inform decision-making. 

A clear audit opinion on the 2024–25 Annual Financial Report of the State of Victoria confirms that the state’s reported financial outcomes are reliable. Clear opinions on 28 of the 30 material entities’ separate financial reports are shared, which together represent the majority of the state's transactions, balances and disclosures. 

Key findings

• Operating revenue and income increased by $8.3 billion, driven largely by higher tax income of $2.0 billion and additional Australian Government grants of $5.5 billion.
• The higher income tax and federal funding contributed to an operating cash surplus this year of $3.2 billion.
• Ongoing net operating losses and fiscal cash deficits pose significant risks to the state’s long-term financial sustainability.
• Gross debt rose from $168.8 billion last year to $187.9 billion and is projected to reach $236.6 billion by 30 June 2029.
• This year, the general government sector reported a net operating loss of $2.6 billion. This is an improvement on last year’s $4.2 billion loss but still exceeds the operating loss forecast in the 2024–25 state Budget by $400 million.
• Weaknesses in IT system controls at material entities, including system access, authentication and monitoring continue to be found.

Key recommendations

• The Department of Treasury and Finance to work with the government to regularly publish updates on its progress against the COVID Debt Repayment Plan.
• Material entities responsible for administering trust accounts assess whether the current spending patterns are effectively achieving the purposes for which these funds were established.
• Material entities strengthen transparency by delivering targeted training and practical guidance to staff responsible for preparing key management personnel and related party disclosures.

The report is accompanied by a data dashboard.