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  Chapter Title - Departmental Overview
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  Spacer Image Chapter 3 > Introduction> Performance information for Outcome 1 - Sustainable Government Finances
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INTRODUCTION

DOFA's Budget Group is responsible for contributing to the outcome of sustainable government finances. It does this through the delivery of a number of outputs:

  • advice to Ministers on whole-of-government budgetary issues
  • compilation of accurate and timely whole-of-government financial reports
  • outcomes and outputs advice
  • ownership advice to the Minister as a shareholder in government business enterprises
  • assistance in the overall management of the Commonwealth Budget.

DOFA successfully contributed to the outcome in 1999-2000, assisting the Government meet its medium term fiscal objective of achieving underlying budget balance on average over the economic cycle.

The main indicator of the contribution of Budget Group's outputs to the outcome is the extent to which the advice and information provided by Budget Group was timely and of high quality, and assisted the Government in achieving its medium term fiscal objective. Consequently, DOFA maintains a process that allows Ministers and their staff to provide feedback to the department on the quality, timeliness and rigour of ministerial briefs and advice.

While DOFA did not achieve all the rigorous performance targets that it set, the overall result was very good, with some targets exceeded. Customers rated very highly the quality and usefulness of Budget Group's advice in assisting Government decision making. On average, about 85 per cent of the Budget Group's briefings and ministerial/parliamentary replies were rated 'excellent' or above average' on a five point scale, ranging from poor to excellent. However, Budget Group took longer to turn around ministerial replies than the target 90 per cent within two working days; it turned around 66 per cent within seven working days. It delivered about 94 per cent of government business enterprise reports within the first week of each month, exceeding the 90 per cent target, and delivered 90 per cent of economic reports on whole-of-government budgetary advice within agreed timeframes.

The smooth delivery and overall management of the 2000-01 Budget, the second on an outcome-output and accrual basis, also was a measure of DOFA's overall contribution to achieving Outcome 1. Nevertheless, DOFA can improve further both the quality and responsiveness of its outputs as it progresses towards becoming a high performance organisation. More detailed performance information and resource tables for Outcome 1 are at the end of this chapter.

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Delivery of the 2000-01 Budget
The 2000-01 Budget continued to build on the successful delivery of the first outcome-output accrual budget. Decision makers better understood accrual information, and budget documents were easier for users to access and comprehend. Budget instructions were both clearer and more comprehensive, and closer collaboration between DOFA and other agencies helped decision making.

A Budget Coordination Committee was established to oversee budget planning and processes; this contributed to the smooth budget process in 2000-01. Another improvement was to develop and operate a whole-of-government project plan for the Budget. This plan ensured all stakeholders in the budget process were aware of their responsibilities and associated tasks at an early stage. It also highlighted key risks and potential issues, which facilitated better risk management and contingency planning.

During 1999, an Accounting Centre of Excellence was established within DOFA to ensure Ministers and agencies received consistent, accurate and timely advice for both budget and financial reporting purposes. The centre is responsible for developing high level, principle based accounting policy for the Commonwealth.

An online, Internet based information library improved communications between DOFA and other Commonwealth agencies and external bodies; it allowed easy access to accounting advice and guidance on budget policy and processes. Budget reports and documents, such as budget papers, the Outcomes and Outputs Framework, and the Budget Timetable are available online to the public at www.finance.gov.au/budgetgroup/.

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International Activities
In May 2000, a small team of DOFA officers, funded by AusAID, went to East Timor, after the United Nations selected DOFA to provide budgeting assistance to the East Timor Government. As well as establishing a working budget for East Timor, DOFA officers are helping to establish effective budget management practices.

DOFA continued to gain international recognition for its implementation and use of accrual budgeting and the outcome-output framework. Budget officials from OECD countries showed great interest in DOFA's achievements, and throughout the year, delegations from many countries visited Australia, seeking advice and looking to emulate the Australian model.


Whole-of-government Financial Reporting

In keeping with the transitional provisions in the Financial Management and Accountability Act 1997, DOFA issued quarterly financial statements and associated analyses for the September 1999 and December 1999 quarters. From January 2000, DOFA provided this service to the Government on a monthly basis, surpassing the transitional provisions. This result was possible because DOFA and agencies had developed effective business relationships.

DOFA also is on schedule to meet its target of supplying a full set of audited Consolidated Financial Statements for the General Government Sector within 100 days of the end of the financial year.


Output Pricing Reviews

The new budgeting framework focuses on the price of outputs, rather than the cost of inputs. One major advantage of pricing reviews is they analyse the resources, processes and activities that contribute to an agency's outputs using techniques such as benchmarking and market testing. In 1999-2000, DOFA initiated a rolling programme of pricing reviews, working successfully with several agencies to appraise the prices of their outputs, identify efficiencies and promote the outcome-output aspects of the accrual budgeting framework.

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Increased Use of Ownership Analysis
The accrual budgeting framework increased DOFA's ability to assess both agency and whole-of-government financial performance, particularly through analysing the balance sheet. For example, in conjunction with the Australian Federal Police, DOFA analysed the Australian Federal Police balance sheet and established a need for an equity injection to enable the Australian Federal Police to extinguish liabilities which had accumulated under the Australian Federal Police Adjustment Scheme and the Cessation Payment Scheme. This injection was provided through the 1999-2000 Additional Estimates process, and placed the Australian Federal Police on a much firmer financial base.

During the year, DOFA also reviewed selected property holdings with a small number of agencies. The reviews recommended adopting industry best practice for existing property management and selling several properties which did not satisfy Commonwealth Property Principles. The principles define the circumstances in which property ownership should be considered and clearly separate agencies' ownership and tenancy roles.


Shareholder Advice

DOFA continued to provide advice to the Minister for Finance and Administration, in his role as shareholder in government business enterprises. DOFA delivered about 94 per cent of government business enterprise reports within the first week of each month, exceeding the 90 per cent target set in DOFA's Portfolio Budget Statement.

In February 2000, the Joint Committee of Public Accounts and Audit ratified the governance framework for government business enterprises in its inquiry into governance and accountability arrangements for these enterprises. The committee's report supported the existing arrangements, and made several recommendations to further strengthen them. DOFA will implement recommendations of an administrative nature in 2000-01.



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