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
- outcomes and outputs advice
- ownership advice to the Minister as a shareholder in government
- 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.
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
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/.
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
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.
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
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
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