Management and Accountability:Corporate Governance

Corporate Governance

Finance is committed to delivering its outcomes in a manner that is efficient, effective, ethical, open and transparent to the parliament and the Australian public.

Finance’s governance framework and policies embody its commitment to effective governance. The framework includes the department’s senior management committees, business planning and reporting, policies to maintain the department’s ethical standards, as well as a risk management framework. It seeks to provide an appropriate balance between central control and delegation while maintaining accountability. From time to time, the framework is reviewed to optimise outcomes and remove unnecessary red tape.

Since the 2008-09 Annual Report:

  • The Budget Review Committee’s activities have been included in general Executive Board business.
  • The Remuneration Committee was discontinued in April 2010 to streamline processes by further devolving responsibility for remuneration decisions to departmental managers. The vast majority of decisions are now taken under HR delegations, with residual matters dealt with by Executive Board.

Senior management committees

Under the Public Service Act 1999 and the Financial Management and Accountability Act 1997, the Secretary is accountable for Finance’s performance and compliance with legal requirements. Although overall legal accountability rests with the Secretary, the size and complexity of the department is such that the widest range of experience and detailed knowledge of Finance’s operations needs to be available when taking key decisions.

Accordingly, the Executive Board along with its sub-committees (see Figure F below) provide oversight for Finance’s delivery of its outcomes.

Figure F – Finance Executive Board and its Sub-Committees

Figure F – Finance Executive Board and its sub-committees

Text Description of Figure F: Finance Executive Board and its sub-committees

Executive Board

The Executive Board is Finance’s peak governance and advisory body. Its role is to provide corporate leadership and strategic direction, set goals for the department and manage its overall performance. The board meets regularly, usually weekly, to discuss developments in the operating environment and to take timely decisions on operational and strategic issues. The Secretary chairs the board, with membership comprising all deputy secretaries. The new position of Chief Operating Officer was not filled during the reporting period, but the Chief Operating Officer group was represented on the board by relevant first assistant secretaries.

Chief Audit Executive

The Chief Audit Executive oversees the internal audit function in the department, providing high level support and advice to the Secretary, the Executive Board and the Audit Committee in relation to Finance’s internal audit program.

Audit Committee

The Audit Committee reviews, monitors and recommends improvements to Finance’s corporate governance framework, with a focus on risk management, internal controls, compliance and financial reporting. The committee provides oversight of the department’s internal and external auditing, maintains a close working relationship with the Australian National Audit Office (ANAO), and ensures that internal audit and ANAO recommendations are implemented. The Audit Committee had an independent chair during 2009-10.

Information Technology Governance Committee

The Information Technology Governance Committee provides independent assurance and advice on ICT matters within Finance to the Secretary and Executive Board. The committee ensures that ICT initiatives undertaken by the department are strategic and include sound governance controls, support the department’s business strategy, are delivered in a cost-effective and timely manner, and are consistent with whole-of-government initiatives. The committee had an independent chair during 2009-10.

Occupational Health and Safety Committee

The Occupational Health and Safety (OH&S) Committee was established in accordance with the Occupational Health and Safety Act 1991 and is governed by Finance’s Health and Safety Management Arrangements, which set out the framework for management of OH&S within Finance. The committee implements health and safety practices for the department. It promotes OH&S to staff and makes recommendations to the Executive Board as required. During 2009-10, the First Assistant Secretary of Corporate Services Division chaired the OH&S Committee.

Security Committee

The Security Committee oversees Finance’s strategic security considerations. It provides assurance to the Executive Board that the department is focussing on strategic security risks and that an appropriate security culture is maintained. During 2009‑10, the First Assistant Secretary of Policy and Planning Division, AGIMO, chaired the Finance Security Committee.

Ethics Committee

The Ethics Committee provides a forum for discussing and resolving high-level ethical issues that may arise within the department. The Secretary chaired the Ethics Committee.

Other committees

In addition to the Executive Board and its committees, Finance’s governance framework incorporates several functional, steering and reference committees to oversee and manage particular issues.

The Central Control Team is responsible for implementing business continuity procedures once a business interruption event is declared and Finance’s Business Continuity Plan is activated. The team confirms the business interruption status, liaises with the Secretary, coordinates response and recovery within business groups, allocates resources and sets priorities for recovery to allow the normal business of the department to resume. During 2009-10 the Central Control Committee was chaired by the First Assistant Secretary of Corporate Services Division.

The Staff Consultative Group (SCG) was established as part of the Department of Finance and Deregulation Collective Agreement 2009-11. The SCG is a forum for staff to provide feedback on issues affecting their employment, provides advice to management on a range of workplace issues, and oversees the implementation and operation of the Collective Agreement. The First Assistant Secretary of Corporate Services Division chairs the group.

The Australian Government Consolidated Financial Statements Audit Committee provides independent assurance to the Secretary that the Consolidated Financial Statements have been properly prepared. The committee has an independent chair who reports to the Secretary.

The Learning and Development Reference Committee provides oversight for Finance Learning and Development programs by providing advice on governance issues, program initiatives, speakers and learning and development opportunities. The First Assistant Secretary of Corporate Services Division chairs the committee.

The Web Management Committee considers the strategic direction of web initiatives, monitors delivery of those initiatives for cost effectiveness and timeliness and ensures compliance with whole-of-government objectives. The committee is also responsible for the maintenance and implementation of the Knowledge & Information Management Strategy 2009-2012. The First Assistant Secretary of Corporate Services Division chairs the committee.

Business planning and performance reporting

A key element of Finance’s governance framework is an integrated planning and reporting process which links day-to-day operational performance to strategic outcomes.

Finance uses its annual strategic and business planning processes to prepare the department’s Portfolio Budget Statement (PBS). The PBS outlines Finance’s strategic directions, provides a statement of purpose, explains the department’s role in government, and sets out strategic objectives and performance measures for each of Finance’s outcomes. The department’s business groups are accountable to the Executive Board for progress against the PBS.

The format and content of Finance’s PBS was revised in line with the whole‑of‑government reform implemented as part of Operation Sunlight. Significant changes include the use of net cash appropriations and new arrangements for reporting non-cash items such as depreciation and amortisation. Financial and performance reporting in this annual report reflects the new format.

Values and ethical standards

Finance is committed to maintaining the highest standards of integrity, good governance and ethical standards.

Our staff are required to uphold the Australian Public Service (APS) Values and APS Code of Conduct through a commitment to the following Finance Valued Behaviours:

  • nurture productive working relationships
  • communicate effectively
  • achieve results and demonstrate creativity
  • exhibit both personal drive and integrity
  • display the ability to learn
  • demonstrate relevant skills and expertise.

The department has incorporated the valued behaviours into staff performance agreements, uses them as part of selection processes and communicates them to all new employees during induction and orientation sessions.

Finance has guidelines for ethical decision-making and an ethics hotline to assist our staff to deal with ethical issues.

Risk management

As part of its corporate governance framework the department has in place mechanisms to identify, monitor and manage general business risks, including fraud risk in particular.

General business risk

Finance promotes responsible risk management at all levels of the organisation as a tool to ensure that the way the department operates and the advice it provides to its ministers and other departments is of the highest standard. Finance’s risk management framework is consistent with the Australian and New Zealand Risk Management Standard ISO31000:2009.

The department encourages staff to undertake risk assessments for business planning purposes and projects as part of good business practice. The Office of Chief Audit Executive includes a specialist risk management team that supports staff to manage business and project risk. In addition, the Audit Committee, Internal Audit Unit, Chief Audit Executive and Executive Board encourage the application of risk management techniques to all aspects of Finance’s work. The department’s Operational Guidelines require formal risk assessments to be undertaken for all procurement activities exceeding $80,000 and for all complex or high-risk procurements.

As part of its management strategy to minimise business risks, the Office of Chief Audit Executive oversees the insurance policies that the department maintains with Comcover.

The office also coordinates the maintenance, development and testing of departmental business continuity plans to ensure Finance has the ability to cope with a range of business interruption events.

Fraud prevention and control

Finance maintains a Fraud Control Plan, based on fraud risk assessments, that complies with the Commonwealth Fraud Control Guidelines 2002. The department regularly reviews fraud prevention and control measures and is committed to continuous improvement associated with fraud prevention and detection. The department is currently implementing the strategies for raising awareness and fraud prevention set out in the Fraud Control and Ethics Plan 2009-11.

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