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  Chapter Title - External Scrutiny
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INTRODUCTION

During 1999-2000, outside parties conducted various reviews and inquiries into DOFA's operations. Given the breadth of its business and role as a central agency, DOFA was mentioned in numerous reports. DOFA also gave evidence to a number of whole-of-government inquiries. This section concentrates on those reviews and inquiries which focused on DOFA.

Parliamentary Committee Inquiries

Joint Committee of Public Accounts and Audit

  • Report 369 - Australian Government Procurement (tabled 30 June 1999)

    - This report focused on how Commonwealth agencies managed their purchasing function; DOFA provided the whole-of-government response to the policy issues. The response was tabled on 23 November 1999.

  • Report 372 - Corporate Governance and Accountability Arrangements for Commonwealth Government Business Enterprises (tabled 16 February 2000)

    - The committee's report was supportive of the existing accountability framework, provided under the Governance Arrangements and the Commonwealth Authorities and Companies Act 1997. The report stated that the 'governance arrangements provide a robust and flexible framework for the management and accountability of GBEs'. It also endorsed the existing requirement for GBEs to table a Statement of Corporate Intent, the corporate form for GBEs, and DOFA's establishment of a GBE monitoring unit.

    - DOFA will implement the report's administrative recommendations in 2000-01, to improve the already strong accountability framework. This will include reviewing the applicability of administrative law to government business enterprises and clarifying the Government's expectations in terms of director orientation and development, board assessment and risk management.

  • Report 374 - Review of Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997 (tabled 16 March 2000)

    - This report largely supported the effectiveness of the legislation underpinning governance and financial management arrangements for Commonwealth bodies. It recommended four minor improvements which the Government is considering.

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Senate Finance and Public Administration Committee

  • The Format of the Portfolio Budget Statements - Second Report (tabled 29 October 1999)

    - The committee explored the functionality of Portfolio Budget Statements (PBS) following the introduction of the accrual based outcome-output budgeting framework. The report affirmed the value of moving to the new framework and made several minor recommendations aimed at increasing the level of information provided in Portfolio Budget Statement documents.

    - The Government agreed to adopt most of the committee's recommendations, which DOFA included in the guidance for 2000-01 Budget Statements. The adopted recommendations led to more detailed output and outcome information, and notes to financial statements.

  • Inquiry into the Mechanism for Providing Accountability to the Senate in Relation to Government Contracts - (tabled 26 June 2000)

- DOFA lodged its submission to this inquiry on 5 May and appeared at public hearings on 12 May 2000. The report's performance audit on the use of confidential contract provisions is awaited.

Senate Standing Committee on Regulations and Ordinances

  • The Senate Standing Committee on Regulations and Ordinances scrutinises each Remuneration Tribunal determination and each regulation issued by the Minister for Finance and Administration under the Remuneration and Allowances Act 1990 and the Remuneration Tribunal Act 1973. The committee commented on the information presented in the Explanatory Memoranda accompanying Remuneration Tribunal Determinations. The Tribunal has taken these comments on board for future determinations.

Public Works Committee

  • The Public Works Committee reviews all public works valued above $6 million. In 1999-2000, one DOFA project, the refurbishment of 4 Treasury Place, Melbourne went before the committee. This was the first building constructed for the Commonwealth in 1912-13 and is closely associated with the early history of Federation. The committee recommended the project proceed and tabled its report on 20 October 1999.

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Australian National Audit Office (ANAO) Reports
As a central agency, DOFA is referred to in a large number of ANAO reports for 1999-2000. The following list includes reports focused on DOFA and action being taken for the most recent reports:

  • Audit Report No. 2: Use of Financial Information in Management Reports (tabled 15 July 1999)
  • Audit Report No.7: Protective Security Audit Operation of the Classification System for Protecting Sensitive Information (tabled 11 August 1999) Audit Report No. 12: Management of Contracted Business Support Processes (tabled 14 October 1999)
  • Audit Report No. 25: Commonwealth Electricity Procurement (tabled 5 January 2000)
  • Audit Report No. 41: Commonwealth Emergency Management Arrangements (tabled 28 April 2000)

    - This involves key stakeholders, particularly Commonwealth and State and Territory emergency managers, on proposed refinements to Natural Disaster Risk Assessment arrangements, and the development and implementation of the Natural Disaster Risk Management Studies Program.

    - It was agreed that DOFA should continue to give increased priority to the implementation of the Natural Disaster Risk Management Studies Program, and DOFA and Department of Transport and Regional Services consult to facilitate the alignment of the program with the Regional Flood Mitigation Program.

  • Audit Report No. 45: Commonwealth Foreign Exchange Risk Management Practices (tabled 31 May 2000)

    - DOFA is involved in a multi-agency taskforce to consider the recommendations, and report to Government. The Secretary of DOFA chaired the taskforce which included representatives from Defence, Treasury, Foreign Affairs and Trade, AusAid, Australian Office of Financial Management and DOFA.

  • Audit Report No. 47: Survey of Fraud Control Arrangements in APS Agencies (tabled 20 June 2000)

    - The report was forwarded to DOFA's Risk Management Coordination Unit which is updating DOFA's fraud control arrangements. As part of its update, the unit will consider the issues raised in this report.

  • Audit Report No.52: Financial Statement Audit: Control Structures as Part of the Audits of Financial Statements of Major Commonwealth Agencies for the Period Ended 30 June 2000 (tabled 30 June 2000)

    - DOFA was included in this audit and in response, DOFA addressed the IT security matters raised, and installed formal review and monitoring processes.


Commonwealth Ombudsman Reports

'To Compensate or Not to Compensate?' Own motion investigation of Commonwealth arrangements for providing financial redress for maladministration. Report under section 35A of the Ombudsman Act 1976 (Tabled September 1999)

The Ombudsman examined how compensation is provided under various arrangements applying to particular categories of requests or claims, including settlement of monetary claims against the Commonwealth, the Scheme for Compensation for Detriment Caused by Defective Administration, act of grace payments, ex gratia payments, debt write offs and debt waivers.

The Ombudsman found, inter alia, these mechanisms/schemes provide adequate power to pay compensation whenever it is warranted, but recommended a more streamlined approach to compensation. Despite the perceived difficulties with current Commonwealth mechanisms, the Ombudsman noted most agencies agreed they could live with the current system if it were explained more simply and interpreted sensibly.

Recommendations applying to DOFA were to:

  • recommend devolution of the act of grace and waiver powers to Agency Heads
  • consult with agencies about arrangements for effective devolution
  • clarify the guidelines for the Scheme for Compensation for Detriment Caused by Defective Administration, to ensure that if the Ombudsman and the agency concerned agree that detriment was caused by defective administration, that agreement is sufficient basis for paying compensation.

DOFA believes it would not be appropriate to devolve to Agency Heads all of the Minister for Finance and Administration's act of grace and waiver powers under the FMA Act. However, the Ombudsman's conclusions on the need to clarify the relationship between the various compensation mechanisms, as well as the Ombudsman's role in assisting agencies determine cases of defective administration, will be taken into account in developing and promulgating guidelines on how to examine different requests for compensation.


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