Part 3: Management and Accountability

Date



Corporate governance

The Treasury’s corporate governance practices aim to ensure sound administrative and financial management and to comply with statutory and other external requirements. They are designed to ensure efficient, effective and ethical use of the Treasury’s resources.

As part of its ongoing focus on effective governance, the Treasury periodically reviews its:

  • accountability mechanisms;
  • leadership, culture and communications;
  • governance and committee structures;
  • engagement with stakeholders to assess effectiveness;
  • risk management framework, compliance and assurance systems; and
  • strategic planning, performance monitoring and evaluation.

Strategic and organisational reviews

Strategic Review of the Treasury

The Strategic Review, announced by the Secretary in July 2011, aimed to ensure that the Treasury has the strategic capabilities to deliver on its mission over the next five years. The Strategic Review sought feedback from staff, ministers and their offices, as well as a range of public, private and community sector stakeholders on the Treasury’s performance.

The Strategic Review identified four broad areas as offering opportunities for improvement. These were: Building key strengths to better support our ministers; Enhancing our engagement skills; Greater innovation and use of information technology tools; and Allocating resources and managing priorities. The Department is implementing the recommendations from the review.

Progressing Women

The Women in the Treasury project formally commenced in 2011. Treasury staff participated in consultations to examine the opportunities and challenges faced by Treasury women.

The Progressing Women initiative was developed in response to the outcomes of the staff consultations and comprises a suite of strategies to widen and deepen the pool of future leaders in the Treasury by harnessing the talents of women at all levels. Further information on the Progressing Women initiative can be found on page 143.

Revenue Group Operation and Organisation Review

This review assessed the capability of Revenue Group including the way it does its work, and advised on measures that could be made to improve its performance. The department is in the process of implementing a number of the recommendations.

Senior management committees and their role

Executive Board

The Executive Board is the Treasury’s primary decision-making body. The Treasury’s Executive Board comprises the Secretary, the Executive Directors and the General Manager of Corporate Strategy and Services Group. The Executive Board is responsible for high-level policy issues relating to the Treasury’s strategic leadership and management, including:

  • organisational development — shaping the Treasury’s future;
  • policy development and coordination — involving major and/or new economic policy issues, generally with implications that involve more than one group;
  • corporate governance — ensuring the efficient, effective and ethical use of resources; and
  • planning and allocation of resources — meeting current and future work priorities.

The Executive Board members as at 30 June 2012 were:

  • Dr Martin Parkinson, Secretary;
  • Dr David Gruen, Executive Director, Macroeconomic Group — Domestic;
  • Mr Mike Callaghan, Executive Director, Macroeconomic Group — International;
  • Mr Jim Murphy, Executive Director, Markets Group;
  • Mr Nigel Ray, Executive Director, Fiscal Group;
  • Mr Rob Heferen, Executive Director, Revenue Group;
  • Mr Barry Sterland, Executive Director, Policy Coordination and Governance; and
  • Mr Steve French, General Manager, Corporate Strategy and Services Group.

The Executive Board is supported by the Secretary to the Board and the Strategic Projects and Governance Team within the Corporate Strategy and Services Group.

Audit Committee

The Audit Committee assists the Executive Board by independently reviewing and considering the Department’s operations, its risk management framework and the integrity of its financial accounts. The Audit Committee reviews audit issues by:

  • supporting and enhancing the control framework;
  • providing assurance on published financial information;
  • monitoring, reviewing and reporting on compliance; and
  • assisting the Secretary to comply with all legislative and other obligations.

The Treasury’s Audit Committee follows the recommended best practice guidelines issued by the Australian National Audit Office (ANAO) and reviews internal and external audits relating to the Treasury. The ANAO also attends the Treasury’s Audit Committee meetings as an observer, as do the Treasury’s internal auditors.

The Audit Committee met seven times during 2011-12. As at 30 June 2012, the Audit Committee comprised an independent external Chair, an external representative and a number of internal members. External observers at Audit Committee meetings included representatives from the ANAO and KPMG.

People Committee

In 2012, the Treasury refocused the Staffing Committee and renamed it the People Committee. The People Committee is a strategic reference and decision-making group with responsibility for ensuring that the Treasury maintains its capability to provide sound and timely advice to government through a high-performing and flexible workforce.

The People Committee provides advice and feedback to the Corporate Strategy and Services Group on a range of people strategies, including workforce planning, and has a decision-making role to facilitate staff mobility within the department and to ensure that the Treasury engages and promotes employees with high level capabilities and potential.

Remuneration committees

Remuneration committees are established within the Executive, Corporate Strategy and Services Group and the four policy groups in the Treasury to recommend to the Secretary the determination of salary rates beyond that available through the Performance Management System for eligible APS6, EL1 and EL2 employees.

The Executive Board determines each remuneration committee’s membership and the Executive Director of the relevant group chairs each remuneration committee. The committee comprises the Chair, the General Manager of People and Organisational Strategy Division and all general managers within the group. One general manager from another group acts as a cross-group representative to promote consistency of outcomes.

Inclusive Workplace Committee

Executive Board created a new decision-making body within Treasury in 2011-12. The Inclusive Workplace Committee (IWC) has responsibility for guiding and monitoring the development and implementation of the program of work for Progressing Women initiative, the Executive Board’s response to the 2011 Women in the Treasury project. The IWC comprises all members of the Executive Board, five additional internal members and two external members, and meets quarterly.

Information Management and Technology Committee

The Information Management and Technology Committee (IMTC) was established in late 2011 to provide a formal mechanism for business engagement and feedback into information management and technology strategic direction. The IMTC replaced the IT Projects Committee which provided advice on and governed the delivery of ICT-enabled projects.

The IMTC is chaired by the Group General Manager, Corporate Strategy and Services Group and comprises the Chief Information Officer, the Chief Finance Officer and a ge
neral manager or SES representative from each policy group.

Security Committee of Treasury

The Security Committee of Treasury was established in July 2011 and provides independent assurance and assistance to the Secretary and the Executive Board in relation to the department’s security risk, control and compliance framework and its external accountability responsibilities.

The committee comprises the Chair (Group General Manager, Corporate Strategy and Services Group) and the general managers of the Information Management and Technology Division, Financial and Facilities Management Division, and two SES representatives from the policy groups.

Work Health and Safety Committee

The Work Health and Safety Committee established in accordance with the Work Health and Safety Act 2011 and preceding Occupational Health and Safety Act 1991, facilitates cooperation between Treasury management and its workers. The committee meets regularly and comprises worker and management representatives. The committee provides a mechanism for workers and management to work together to develop and monitor health, safety and wellbeing programs and resolve any emerging issues.

Senior management structure

The Treasury’s senior management structure is detailed in Figure 1 on page 16.

Corporate planning and reporting

The Treasury’s corporate planning and reporting framework is an integrated system linked to the financial management, human resource and business management systems.

The Executive Board sets the broad strategic direction for the Treasury through its Strategic Framework. The Strategic Framework sets out the Treasury’s mission, role, policy responsibilities, key priorities, risks, values and capabilities.

The Treasury meets its external reporting responsibilities through its portfolio budget statements and annual report.

Risk management

The Treasury pursues a comprehensive, coordinated and systematic approach to risk management. It supports managers to anticipate uncertain events, exploit opportunities and respond appropriately to potential weaknesses.

  • The Treasury’s risk management framework was reviewed in 2011-12. The updated risk management framework aims to:
    • establish robust, yet pragmatic, risk management practices that support business needs and provide the methodology and tools to enable effective management of risk across the Treasury;
    • develop a consistent Treasury-wide understanding of risk management;
    • foster an environment where all staff assume responsibility for managing risk and where managers formally consider risks as part of the decision making process;
    • ensure that significant risks facing the Treasury have been identified, understood, documented and are being actively managed;
    • ensure that risks are assessed in a balanced way, with upside risks (opportunities) considered alongside downside risks; and
    • ensure that risk registers remain useful and practical tools with which to analyse risk.
  • The Fraud Control Plan complies with Australian Government Fraud Control Guidelines.
  • The Chief Executive Instructions put into effect the Financial Management and Accountability Act 1997 requirements, setting out responsibilities and procedures which provide an overarching framework for transparent and accountable financial management. They also contain topics relating specifically to risk management and internal accountability.
  • The Internal Audit Plan identifies services and functions for auditing, and is approved by the Audit Committee and the Executive Board.
  • Risk management and insurable risks are aligned through Comcover and Comcare.

The Treasury uses a range of strategies to identify and manage risks associated with the delivery of IT services. New IT-enabled business solutions are assessed against key IT principles to manage IT investments strategically. The framework for delivering IT services includes:

  • an IT Disaster Recovery Plan which sets out the strategies and processes to restore services if the Treasury’s central computing infrastructure is lost completely or partially;
  • a Business Continuity Plan for the Treasury’s business which provides a process for identifying priority IT systems to restore, as well as alternative methods and processes so the Treasury can continue to work while the environment is restored;
  • an IT Security Policy which addresses the requirements to protect information holdings and secure operation of the Treasury’s IT resources;
  • an Internet and Email Acceptable Use Policy which sets out responsibilities for appropriate use of the internet, email facilities and services;
  • a Social Media Policy that helps enable external and internal engagement while ensuring protocols are in place for appropriate use of social media and to protect Treasury’s reputation;
  • IT Change Control Guidelines (an internal management tool) which assists with quality assurance control over proposed changes to the technical environment and facilities; and
  • Project Standards, internal standards based on the structured project management methodology, PRINCE2, which ensure correct project governance is applied to IT-enabled business projects.

Training programs and staff notices raise staff awareness of risk management policies and procedures. All policies and procedures are available to staff on the intranet.

Fraud prevention and control

No cases of fraud were reported to the Australian Federal Police in 2011-12.

The Treasury’s Fraud Control Plan, reviewed in June 2012, accords with the Commonwealth Fraud Control Guidelines and the Australian National Audit Office Better Practice Guide on Fraud Control in Australian Government Entities.

The Treasury:

  • has prepared fraud risk assessments and fraud control plans;
  • has appropriate fraud control, prevention, detection, investigation and reporting standards and data collection procedures and processes in place, and reports annual fraud data information to the Australian Institute of Criminology; and
  • has taken all reasonable measures to minimise the incidence of fraud and to investigate and recover the proceeds of fraud against the department.

Ethical standards and accountability

The Treasury aims to promote a workplace which is accountable and utilises Commonwealth resources in an ethical and efficient way.

  • The Treasury Management Model underpins the accountability and governance frameworks and incorporates the department’s mission and values.
  • The Treasury Performance Management System, along with the APS Code of Conduct, provides mechanisms for ensuring individual values and behaviours align with these shared corporate values and behaviours.
  • The Treasury Workplace Agreement contains a commitment from employees to be aware of, and observe, the Treasury’s and APS values.

During the induction process, new staff receive information on the Australian Public Service Commission’s (APSC) Ethics Advisory Service. New starters are also encouraged to undertake an APS and Treasury accountabilities workshop, which provides participants with an understanding of the APS values and code of conduct, Treasury accountabilities and values, and corporate governance frameworks.

Under the Commonwealth Fraud Control Guidelines, the Treasury must conduct ethics and fraud awareness training. This is offered regularly to all staff, and reflects the department’s commitment to maintaining an ethical culture, and promoting fraud awareness. The ethics and fraud awareness training provides attendees with an understanding of ethics, ethical challenge
s, resolution of ethical problems and prevention of fraud in the Commonwealth.

The Chief Executive Instructions establish the Treasury’s internal policies and rules which apply the principles and requirements of the Financial Management and Accountability (FMA) Act, FMA Regulations and FMA Orders. They provide the basis for the management and effective, efficient, and ethical use of Commonwealth money, property and other resources. The Treasury reviews and updates the instructions regularly.

The Chief Executive Instructions also provide a user-friendly approach to financial management processes and guide staff so they can comply with legislation and ethical standards. Information on financial management delegations is communicated to new staff during their induction, and additional training and regular financial management forums are conducted for divisional support officers. Financial management workshops are offered to staff to assist them in understanding the APS Financial Management Framework.

All corporate governance policies and procedures are available on the intranet.

Senior Executive Service remuneration

Terms and conditions for all of the Treasury’s Senior Executive Service staff are contained in either Australian Workplace Agreements (AWAs) or individual section 24(1) determinations made by the Secretary.

Senior Executive Service staff are appraised using the APSC Senior Executive Leadership Capability Framework. This involves making individual rankings against the framework’s five criteria, then arriving at an overall relative ranking for the person.

An increase in ranking based on longer-term performance can lead to an increase in base salary (see Table 4 on page 136). Additional information on remuneration is set out in Note 12: Senior Executive Remuneration in the financial statements on page 203-207.