2012-13
Certificate of Compliance
Report to the Parliament
DEPARTMENT OF FINANCE
2012-13
Certificate of Compliance
Report to the Parliament
DEPARTMENT OF FINANCE
DEPARTMENT OF FINANCE
ISSN: 1838-6865 (Print)
ISSN: 1838-6873 (Online)
Creative Commons Licence
With the exception of the Commonwealth Coat of Arms, the Certificate of Compliance
Report to the Parliament 2012-2013 is issued under a Creative Commons BY licence.
The terms of the BY licence can be found here:
http://creativecommons.org/licenses/by/3.0/au/.
The document must be attributed: ’Commonwealth of Australia, Certificate of
Compliance Report to the Parliament 2012-2013’.
Use of the Coat of Arms
The terms under which the Coat of Arms can be used are detailed on the following
website: http://www.itsanhonour.gov.au/coat-arms/
Acknowledgements
Photographs taken by Steve Keough, Steve Keough Photography
Other photographs from the Department of Finance collections.
ii
Foreword
Foreword by the Minister
This is the fifth public report on the annual Certificate of Compliance (Certificate)
process for agencies under the Financial Management and Accountability Act 1997
(FMA Act). It aggregates individual agency results for the 2012-13 financial year.
Since its introduction in 2006-07, the Certificate process has resulted in improved
understanding of, and compliance with, the Australian Government’s financial
management framework. In this way, the Certificate has played an important role in
ensuring agencies are accountable for the public resources they manage.
The chief executives of all agencies under the FMA Act are required to provide a
completed Certificate to their portfolio Minister each year. The Certificate process is
an important means of identifying and disclosing instances of non-compliance with
the financial management framework, as a basis for continuous improvement within
agencies and more broadly.
Overall, agencies have again reported relatively low levels of non-compliance when
compared to the many millions of financial transactions they undertake each year on
behalf of Government. It is important to assess the results in that context.
For the 2012-13 reporting period, agencies reported an increase in non-compliance of
about 10 percent compared to last year. That said, this result is still comparable to
performance over the past four years. As in previous years when reported
non-compliance has increased, this is strongly correlated to changed financial
management framework requirements. This year’s increase is due to the introduction
of mandatory reporting requirements in the Commonwealth Procurement Rules
(CPRs), which came into effect on 1 July 2012. Removing the impact of this new
requirement, overall non-compliance is in line with the downward trend experienced
over previous years.
From 1 July 2014, Commonwealth entities operating under the FMA Act or the
Commonwealth Authorities and Companies Act 1997 will operate under the the Public
Governance, Performance and Accountability Act 2013 (PGPA Act). The PGPA Act
moves from a prescriptive compliance-based approach to financial management to a
broader principles-based approach to performance and resource management.
Instead of legislative provisions that focus on process, the PGPA Act contains a
stronger focus on duties, internal controls and risk. The new framework will continue
to provide assurance to the public that an appropriate standard of accountability and
assurance is in place and resources are being well managed. Any future compliance
reporting will be considered in the context of the new framework.
Mathias Cormann
Minister for Finance
January 2014
iii
Contents
Foreword
iii
Contents
iv
Introduction
2
Part 1: 2012-13 results by category
21
Part 2: 2012-13 results by portfolio group
33
Appendix: List of portfolio groups for Certificate purposes
46
iv
Introduction
1.
Introduction
This is the fifth annual Report to the Parliament on the Certificate of Compliance
(Certificate) process. The Report provides an aggregate analysis of agency results
for the 2012-13 financial year.
2.
The Certificate
The Certificate process aims to improve understanding of the financial management
framework, and strengthen agency processes, through the identification of
non-compliance issues and undertaking of action to improve processes. The
Certificate promotes continuous improvement within agencies. Analysis of
Certificate results also provides an opportunity for the Department of Finance
(Finance) to identify issues across agencies, thereby highlighting elements of the
framework that may require improvement.
The chief executives of all agencies under the Financial Management and
Accountability Act 1997 (FMA Act) are required to provide a completed Certificate to
their portfolio Minister by 15 October each year. The Certificate is also copied to the
Minister for Finance (Finance Minister).1
The Certificate covers the financial year, 1 July to 30 June. Seven rounds of reporting
have been completed to date since 2006-07. This year, 110 FMA Act agencies were
required to prepare Certificates.
The Certificate process is based on a self-assessment by agency chief executives. It
provides a comprehensive overview of each agency’s compliance with the financial
management framework. Chief executives are required to certify their agency’s
compliance during the previous financial year with:




1
2
3
the FMA Act
the Financial Management and Accountability Regulations 1997
(FMA Regulations)
the Finance Minister’s delegations to agency chief executives, as amended from
time-to-time 2
selected financial management policies of the Commonwealth.3
A separate process applies to entities under the Commonwealth Authorities and Companies Act 1997. For further
information, see Finance Circular 2008/05: Compliance Reporting – CAC Act Bodies and Finance Circular 2011/06: CAC
Act compliance: Departmental responsibilities.
See the Financial Management and Accountability (Finance Minister to Chief Executives) Delegation 2010 and the
Financial Management and Accountability (Finance Minister to Finance Secretary) Delegation 2010, which were in force
during the 2012-13 financial year.
For the 2012-13 year, chief executives were required to certify compliance with: the cost recovery policy, as outlined in
the Australian Government Cost Recovery Guidelines; the policy on contingent liabilities, as outlined in the Guidelines for
Issuing and Managing Indemnities, Guarantees, Warranties and Letters of Comfort; the policy on foreign exchange risk
2
All instances of non-compliance must be reported in the Certificate, focusing on
action taken by agencies to improve their processes. The requirements of the FMA
Act and FMA Regulations mean that compliance is not assessed based on materiality.
That is, where instances of non-compliance are identified with no or immaterial
financial consequences, they must still be reported in the Certificate.
However, it is not intended that all actions and transactions of an agency be checked.
It is expected that chief executives will ensure that their agency has sufficient
processes and controls in place to provide reasonable confidence that staff members
are complying with the financial management framework.
The processes, systems and controls that chief executives put in place to promote
compliance with the financial management framework may vary between agencies,
depending on their size, operations, structure and activities. In most cases, these
processes and controls are an extension of those processes that give confidence to
the chief executive on matters such as the use of delegations and budgetary
management. Chief executives therefore complete the Certificate based on their
agency’s internal control mechanisms, management and audit committee advice.
In 2012-13, 110 FMA Act agencies reported a combined total of 14,027 instances of
non-compliance. This outcome represents an increase of approximately 10 percent
from the 2011-12 results (see ‘Overall Trends’).
The instances of non-compliance reported in agency Certificates generally arise
from one or more of the following:





inaction by individuals, such as not seeking the necessary approvals for
particular expenditure
lack of timely action by individuals, such as not banking public money within the
required timeframe or not meeting the timeframe to report publicly on contracts
entered into over a certain threshold
particular actions taken by individuals, such as relying on an outdated
delegation or drawing right
lack of awareness of key requirements, due to changes in staffing, structures or
activities
system or process issues, either at the agency or sub-agency level.
The Certificate also requires chief executives to state whether the agency is
operating within the agreed resources for the current financial year and to certify
that the agency has adopted appropriate management strategies for risks that may
affect its financial sustainability.
3.
Structure of the Report
The Report records the outcomes of the 2012-13 Certificate process at a ‘portfolio
group’ level, drawing on data contained in the individual Certificates prepared by
FMA Act agencies. For the purposes of this report, a portfolio group comprises all
agencies within the relevant portfolio as at 30 June 2013. In 2012-13, there were 20
management requirements, as outlined in the Australian Government Foreign Exchange Guidelines; the requirements for
the management of special accounts, as outlined in the Guidelines for the Management of Special Accounts; and the
policy on the management of property, as outlined in the Commonwealth Property Management Guidelines.
3
portfolio groups comprised of 110 agencies.4 The agencies comprising each portfolio
group for the 2012-13 financial year are listed in the Appendix.
In their individual Certificates, agencies report instances of non-compliance against
specific sections and subsections of the FMA Act, FMA Regulations, the Finance
Minister’s delegations to agency chief executives and selected policies of the
Commonwealth. Six categories are used to report on these results in a meaningful
way.5 These categories represent key elements of the financial management
framework:
i.
the commitment of public money by agencies
ii.
the use of drawing rights by agencies
iii.
the proper use of financial resources
iv.
banking and investment by agencies
v.
the maintenance of agency accounts and records
vi.
miscellaneous requirements.
Part 1 reports on instances of non-compliance by type. The combined total of 14,027
reported instances of non-compliance is presented against the six categories.
Part 2 reports on instances of non-compliance by portfolio grouping. The data is
presented as a percentage of each portfolio group’s share of the combined total of
14,027 reported instances of non-compliance.
4.
Overall Trends
Seven rounds of reporting have been completed to date, covering the 2006-07 to
2012-13 financial years.
As noted in previous reports, considerable work has been undertaken by agencies to
strengthen internal controls and reporting processes since the introduction of the
Certificate. The maturing of agencies’ internal mechanisms, and the more systematic
identification and remediation of instances of non-compliance, is reflected in the
number of instances of non-compliance reported by agencies over the seven rounds
of reporting.
At an aggregate level, agencies reported a relatively low number of instances of
non-compliance in the first round of reporting (2006-07), followed by an increase in
reported instances of non-compliance in round two (2007-08), as internal systems
bedded down and matured. Instances of non-compliance halved in 2008-09, to a
level somewhat above the total reported in 2006-07, as agencies sought to address
the issues identified in the first two rounds of reporting. In 2009-10, there was a
relatively small increase in reported instances compared to 2008-09, as agencies
worked to implement new reporting requirements, as a result of the introduction of
the Commonwealth Grant Guidelines (CGGs). The results for 2011-12 continued the
decreasing trend in reported non-compliance reflecting continuous improvement,
both in agency processes and across the framework more broadly.
4
For the purposes of this report, the four Departments of the Parliament – the Department of the Senate, the Department
of the House of Representatives, the Department of Parliamentary Services and the Parliamentary Budget Office – are
treated as a single portfolio group, as is the Department of Veterans’ Affairs. This represented the functional structure
of the previous Government’s Administrative Arrangements in effect during the 2012-13 financial year. This is prior to
Administrative Arrangements Order issued on 18 September 2013 which restructured portfolios.
5
See Finance Circular 2013/03: Certificate of Compliance – FMA Act Agencies, for further information on the reportable
instances against the six categories and the Summary of Compliance Requirements.
4
The 2012-13 results reflect a small increase of reported instances of
non-compliance, due to the impact of the new reporting requirements in the
Commonwealth Procurement Rules (CPRs), which involve publicly reporting
contracts within 42 days. Overall, there was a reduction in reported non-compliance
against four categories and an increase in two categories. This is discussed further
under ‘Results against the Six Categories’.
Decreases, due to continuous improvement, can be balanced against short-term
increases in reported non-compliance with the introduction of new requirements.
The reduced non-compliance against four of the six categories demonstrates
agencies’ continuing commitment to improve processes and staff members’
understanding, in order to address non-compliance. For example, in 2012-13,
several agencies have significantly reduced non-compliance with the requirements
involving documenting approvals committing public money. This reinforces the
positive impact of the Certificate in encouraging agencies to improve their systems
and processes.
Chart A: Instances of non-compliance: trends over seven years
Chart A tracks the total number of reported non-compliance over the seven years of
the Certificate. The dotted line for 2012-13 removes the impact of non-compliance
with the new requirement in the CPRs. This demonstrates the continuing downward
underlying trend in non-compliance and the impact that introducing new
requirements can have.
5.
Context
The total number of instances of non-compliance reported by agencies can be
contrasted with the substantial number and scope of financial activities undertaken
by agencies. While no accurate estimate is available, agencies as a whole undertake
many millions of financial activities valued at several billion dollars each financial
year.
5
By way of example:
 the Australian Taxation Office, which employed over 22,000 ongoing staff, has
advised that in the 2012-13 financial year it processed over 13.7 million refunds
valued in excess of $95 billion
 the Treasury, which employed 920 full-time equivalent staff as at 30 June 2013,
has advised that it processed more than 180,000 financial transactions in
2012-13, involving $12.0 billion in receipts to the Treasury and $88.1 billion in
payments
 the Department of Defence has advised that in the 2012-13 financial year it
undertook approximately 1.7 million financial transactions
 the Defence Materiel Organisation, which employed over 5,500 staff across
Australia, has advised that it undertook over 640,000 financial transactions
during 2012-13 with a value over $9.9 billion
 the Department of Social Services has advised that the former Department of
Families, Housing, Community Services and Indigenous Affairs, processed
118,668 payments during 2012–2013
 the Australian Customs and Border Protection Service has advised that it
employs approximately 5,500 staff in 54 locations across Australia, who
processed 655,031 transactions during 2012-13, involving payments of over
$1.5 billion and receipts of more than $13.2 billion
 small agencies are also required to manage large volumes of transactions
relative to their size and often in complex circumstances (e.g. the Administrative
Appeals Tribunal has advised that in 2012-13 it processed just under 12,000
financial transactions).
While the number of reported instances of non-compliance is significant, the level of
reported non-compliance is low when compared to the substantial number of
government financial activities occurring each year.
6.
Results against the Six Categories
Chart B records the combined total of all (14,027) instances of non-compliance
reported in 2012-13 against six categories.
Since the introduction of the Certificate, reported non-compliance has been
concentrated in two key areas:


the commitment of public money
banking and investment by agencies.
In 2012-13, there was a decrease in non-compliance with the banking and
investment requirements, compared to previous years.
6
Chart B: Percentage of all non-compliance by category for 2012-13
Note that there were zero instances of non-compliance reported against category 5 the maintenance of agency account and records, in 2012-13.
i. The commitment of public money by agencies
Chart C: Instances of non-compliance: Category 1 - the commitment of
public money by agencies from 2006-07 to 2012-13
7
This category combines all reported instances of non-compliance with section 32B,
32C, 32D, 32E and 44 of the FMA Act, FMA Regulations 7 to 12 and FMA
Regulation 16.6



Section 44 of the FMA Act requires an agency chief executive to manage the
affairs of the agency in a way that promotes proper use of the Commonwealth
resources for which the chief executive is responsible. Proper use means
efficient, effective, economical and ethical use that is not inconsistent with the
policies of the Commonwealth. This section provides authority for a chief
executive (and delegates) to make, vary or administer arrangements on behalf of
the Commonwealth in relation to the affairs of the agency. The majority of
instances of non-compliance reported against this section relate to agency staff
not been delegated the power to enter into contracts.
Section 32B of the FMA Act and FMA Regulation 16 provides the authority for
chief executives (and delegates) to make, vary or administer any arrangement,
grant or program specified in Schedule 1AA to the FMA Regulations.
FMA Regulations 7-12 regulate agency commitments to spend public money.
Regulations 7, 7A and 7B require officials performing duties in relation to
procurement, grants administration or the procurement of cleaning services to
act in accordance with the CPRs, CGGs and the Commonwealth Cleaning Services
Guidelines respectively which are legislative instruments. Regulations 8, 9, 10
and 10A set out approval requirements and processes for entering into spending
proposals, while Regulation 12 sets out the recording requirements for
decisions relating to the approval of spending proposals. FMA Regulation 11 sets
out the approval requirements for loan guarantees.
Category one accounted for 83.7 percent of all non-compliance reported in 2012-13
(68.0 percent in 2011-12). This represented a total of 11,734 instances of
non-compliance compared to 8,708 in 2011-12. The vast number of transactions
involving the expenditure of public money by agencies each year means that the
majority of instances of non-compliance will continue to be reported under this
category.
It is also important to note that the introduction, from time-to-time, of revised
financial management framework requirements may give rise to additional
instances of non-compliance, as agencies work to implement the changed
requirements. The increase of reported instances of non-compliance in 2012-13 was
due to the introduction of new requirements in the CPRs in July 2012, involving
reporting on AusTender7 within 42 days of entering into (or amending) contracts at
or above the reporting threshold. This resulted in 4,050 instances of
non-compliance (approximately 35 percent of Category one), which was partially
off-set by the reduction of non-compliance against the Commonwealth’s grants
framework requirements.
6
7
Changes were made to the FMA Act and Regulations in 2012. The changes are reflected in the 2012-13 reporting period.
AusTender is the central web-based facility for the publication of Australian Government procurement information,
including business opportunities, annual procurement plans and contracts awarded.
8
ii. The use of drawing rights by agencies
Chart D: Instances of non-compliance: Category 2 - the use of drawing
rights by agencies from 2006-07 to 2012-13
This category combines all reported instances of non-compliance with sections 26
and 27 of the FMA Act.

Drawing rights provide controls around the expenditure of public money and
the use of appropriations. Drawing rights are a statutory control over who may
make payments of public money. They also allow for conditions and limits to be
set by the Finance Minister (or the Finance Minister’s delegates) in relation to
payments. Sections 26 and 27 of the FMA Act govern the issuance of drawing
rights and limit certain activities to those officials or Ministers who have been
issued with drawing rights.
Category two accounted for 4.4 percent of all non-compliance reported in 2012-13.
This represented a total of 622 instances of non-compliance. This is a decrease from
the 857 instances (6.7 percent) reported in 2011-12, reflecting process
improvement by agencies.
9
iii. The proper use of financial resources
Chart E: Instances of non-compliance: Category 3 - the proper use of
financial resources from 2006-07 to 2012-13
This category combines all reported instances of non-compliance with sections 14,
15 and 60 of the FMA Act and FMA Regulation 21.



Section 14 of the FMA Act provides that an official or Minister must not misapply
public money or improperly dispose of, or improperly use, public money.
Section 15 establishes liability for the loss of public money in an official’s or
Minister’s nominal custody at the time of the loss, and the circumstances in
which the Commonwealth may recover such a loss (i.e. where an official or
Minister caused or contributed to the loss by misconduct, or by a deliberate or
serious disregard of reasonable standards of care).
Section 60 of the FMA Act provides that an official or Minister must not use a
Commonwealth credit card, or credit card number, to obtain cash, goods or
services otherwise than for the Commonwealth. This includes misuse of
Cabcharge vouchers. Section 60 also makes provision for the FMA Regulations
(i.e. Regulation 21, see below) to authorise other uses, provided that the
Commonwealth is reimbursed in accordance with the Regulations. The reported
instances include circumstances where there is a mistaken use of a
Commonwealth credit card for coincidental private expenditure, which is repaid
to the Commonwealth as well as instances of fraud which are prosecuted.
FMA Regulation 21 gives an agency chief executive the power to authorise the
holder of a Commonwealth credit card to use the card to pay a claim that
includes both official and coincidental private expenditure, and to specify
arrangements for the cardholder to repay the Commonwealth for any
coincidental private expenditure. Regulation 21 also requires the repayment of
any coincidental private expenditure.
Category three accounted for 6.5 percent of all non-compliance reported in 2012-13.
This represented a total of 907 instances of non-compliance. This is a slight increase
from the 656 instances (5.1 percent) reported in 2011-12 and relates to increased
reported instances of misuse of Commonwealth credit cards. Agency responses
indicate that appropriate follow-up action has been undertaken for both accidental
10
misuse, which forms the majority of reported instances, and suspected fraudulent
use of Commonwealth credit cards. Agencies reported that suspected credit card
fraud identified during the reporting period resulted in police investigations and
criminal prosecutions.
iv. Banking and investment by agencies
Chart F: Instances of non-compliance: Category 4 - banking and
investment by agencies from 2006-07 to 2012-13
This category combines all reported instances of non-compliance with sections 8, 9,
10, 11, 13, 16, 34, 38, 39, 40 and 47 of the FMA Act and FMA Regulations 17, 18, 19,
19A and 20.





Section 8 of the FMA Act permits the Finance Minister to enter into agreements
with banks for the conduct of the Commonwealth’s banking, while section 9
allows the Finance Minister to open and maintain official bank accounts. These
powers have been delegated by the Finance Minister to agency chief executives.
Section 10 of the FMA Act requires public money to be promptly banked
(Regulation 17 defines this as the next banking day unless otherwise approved
by a chief executive), while section 11 prohibits the deposit of public money in
any account other than an official account. Regulation 18 requires an official
who receives public money in a non-bankable currency to safeguard the money.
Section 13 of the FMA Act prohibits the withdrawal of money from an official
account without proper authority. Regulations 19 and 19A set out requirements
for making cash advances and for other withdrawals from official accounts and
internal transfers between accounts.
Section 16 of the FMA Act permits the Finance Minister to issue special
instruction about the handling of special public money including the investment
of special public money.
Section 34 of the FMA Act permits the Finance Minister to waive, postpone or
defer debts owed to the Commonwealth, and to allow the payment of debts
owed to the Commonwealth by instalments. This power has been delegated by
the Finance Minister to chief executives. Where the delegated power is not
complied with, this is reportable against the Delegation.
11



Section 47 of the FMA Act requires an agency chief executive to pursue recovery
of each debt for which the chief executive is responsible, unless the debt has
been written off as authorised by an Act, or the chief executive is satisfied that
the debt is not legally recoverable or considers that it is not economical to
pursue recovery.
Section 38 of the FMA Act facilitates credit card arrangements by permitting the
Finance Minister to enter into arrangements with banks for the short-term
borrowing of money by way of advances. This power has been delegated by the
Finance Minister to chief executives.
Section 39 of the FMA Act permits the Finance Minister and Treasurer, or their
delegates, to invest public money in authorised investments and defines such
investments. The effect of this section is that agency chief executives may only
invest public money if delegated by the Finance Minister or Treasurer and may
only invest in a conservative class of investments, such as bank deposits and
Commonwealth and State securities, unless otherwise authorised by the FMA
Regulations or an Act. Section 40 of the FMA Act requires officials who receive
securities in the course of their duties to deal with them in accordance with
Regulation 20 (i.e. issue a receipt, maintain a register and take reasonable steps
to safeguard the securities).
Category four accounted for 4.2 percent of all non-compliance reported in 2012-13.
This represented a total of 590 instances of non-compliance. This is a significant
decrease from the 2,282 (17.9 percent) reported in 2011-12, and is the result of
three portfolios improving processes for banking and debt recovery.
v. The maintenance of agency accounts and records
Chart G: Instances of non-compliance: Category 5 - the maintenance of
agency accounts and records from 2006-07 to 2012-13
12
This category combines all reported instances of non-compliance with sections 44A,
48, 49, 50 and 51 of the FMA Act.



Section 44A of the FMA Act requires an agency chief executive to give the
responsible Minister such reports, documents and information on agency
operations as the Minister requires. It also requires a chief executive to provide
the Finance Minister with information on the financial affairs of the agency.
Under section 50 of the FMA Act, the Finance Minister may also request financial
statements covering a period of less than a financial year.
Section 48 of the FMA Act requires a chief executive to ensure that accounts and
records of the agency are kept as required by the Finance Minister’s Orders.
Section 49 of the FMA Act requires the preparation of annual financial
statements for scrutiny by the Auditor-General.
Section 51 of the FMA Act clarifies the responsibilities of affected chief
executives for the preparation of financial statements where an agency ceases to
exist or following a transfer of agency functions.
No instances of non-compliance were reported against category five in 2012-13,
compared to the one instance reported in 2011-12.
vi. Miscellaneous requirements
Chart H: Instances of non-compliance: Category 6 - miscellaneous
requirements from 2006-07 to 2012-13
This category combines the remaining instances of non-compliance, relating to
selected government policies,8 the Finance Minister’s delegations to chief executives
and the sections of the FMA Act and Regulations listed below.

8
Section 12 of the FMA Act facilitates arrangements for the receipt and spending
of public money by persons outside the Commonwealth (4 instances of
non-compliance).
Footnote 3 lists the policies to be reported in the Certificate.
13









Section 41 of the FMA Act requires the proper use of public property by officials
and Ministers (47 instances of non-compliance).
Section 42 of the FMA Act specifies the liability of officials and Ministers for the
loss of public property (2 instances of non-compliance).
Section 43 of the FMA Act contains the requirements for making gifts of public
property (8 instances of non-compliance).
Section 45 of the FMA Act requires a chief executive to implement an agency
fraud control plan (2 instances of non-compliance).
Section 46 of the FMA Act and FMA Regulation 22C require a chief executive to
establish and maintain an audit committee for the agency (2 instances of
non-compliance).
FMA Regulation 22D requires a chief executive to prepare budget estimates in
the form specified by the Finance chief executive (2 instances of
non-compliance).
FMA Regulations 32 and 33 contain the requirements for the transfer of
employee entitlements between agencies (51 instances of non-compliance).
This category includes selected government policies (44 instances of
non-compliance), including the management of indemnities (13 instances of
non-compliance), the management of special accounts (29 instances of
non-compliance), and property management (2 instances of non-compliance).
The Finance Minister's delegations to agency chief executives (12 instances of
non-compliance).
Category six accounted for 1.2 percent of all non-compliance reported in 2012-13.
This represented a total of 174 instances of non-compliance. This is a decrease from
the 294 instances (2.3 percent) reported in 2011-12.
7.
Continuous Improvement by Chief Executives
7.1. Internal controls and agency processes
A key feature of the current financial management framework is that chief
executives are directly responsible for the management of the resources of their
agency. Part 7 of the FMA Act sets out the specific responsibilities of chief
executives. In particular, section 44 places a special responsibility on chief
executives to manage the affairs of their agency in a way that promotes the ‘proper
use’9 of the Commonwealth resources for which they are responsible.
This broad responsibility to manage the affairs of an agency in a way that promotes
proper use of Commonwealth resources is complemented by other requirements in
Part 7 of the FMA Act, such as the requirements relating to audit committees,
financial reporting and fraud control plans.
Agency chief executives complete the Certificate based on their agency’s internal
control mechanisms, management and audit committee advice. It is not intended
that all actions and transactions of the agency must be checked. It is, however,
expected that chief executives will ensure that the agency has sufficient processes
and controls in place to provide reasonable confidence that staff members are
complying with the financial management framework.
9
Proper use means efficient, effective, economical and ethical use that is not inconsistent with the policies of the
Commonwealth. In managing the affairs of their agency, chief executives must comply with the FMA Act and
Regulations and any other law.
14
The Certificate process promotes continuous improvement within agencies. It also
provides an opportunity for Finance to identify issues that are common across
agencies, thereby highlighting elements of the financial management framework
that may require improvement. Significantly, chief executives are required to report
on the action they have taken to address reported instances of non-compliance. This
is a key aspect of the Certificate process. Chief executives should ensure that their
systems are robust and identify non-compliance with a view to process
improvement.
Agencies’ Certificate processes should be proportionate to their size, financial
activities and financial management arrangements. Chief executives should ensure
that their agencies employ effectively targeted quality assurance activity to support
the self-assessment Certificate process. Risk-based reviews of transactions and
internal controls give greater consistency and confidence in reported results.
Chart I: Corrective strategies reported by agencies in 2012-13
Similar to previous years, the 2012-13 Certificate results indicate that agencies have
adopted, or will adopt, a variety of corrective strategies to address non-compliance.
The main strategies reported by agencies were:





communication and education – including reminders to staff, the provision of
additional internal advice, training and counselling (30.6 percent)
correcting systems or processes – including reviewing drawing rights, changing
purchase order arrangements, establishing automated reporting, and
introducing further approval and authorisation processes (16.9 percent)
reviewing internal controls – including reviewing delegations and undertaking
internal audits and system reviews (8.4 percent)
formal investigations, which may lead to sanctions or other action (1.6 percent)
a combination of the above strategies (42.5 percent).
15
7.2. Managing financial risks
Balancing increasing demands against finite financial resources is an important part
of a chief executive’s role. The Certificate requires chief executives to state whether
the agency is operating within agreed resourcing levels and to certify that their
agency has adopted appropriate management strategies to mitigate key risks that
may affect financial sustainability. Financial sustainability, in this context, is the
ability of the agency to meet existing requirements without the need for
supplementary resourcing. This includes the management of capital and long-term
assets and liabilities. Where known risks may affect the financial sustainability of an
agency and appropriate management strategies have not or cannot be taken, an
explanation must be provided in the Certificate.
In 2012-13, 32 agencies reported that, although they are operating within agreed
resources, they have identified risks to their financial sustainability. These risks are
being actively managed and include issues such as increasing cost pressures from
the requirement to deliver new programs without additional resources. One agency
reported that they were currently operating beyond agreed resourcing levels,
however they stated that they were implementing strategies to mitigate projected
overspends.
The main issues reported by agencies include:




not operating within agreed resources (0.9 percent)
increasing cost pressures, such as due to new policy initiatives that an agency is
required to deliver (10.0 percent)
may need to access cash reserves, now or in the future, or seek additional
funding. These agencies have sought, or obtained, approval from the Finance
Minister for an operating loss for the financial year, for reasons such as,
differences between revenue and expenses, accounting treatments, one-off costs
or higher net expenditure (14.6 percent)
the need to seek supplementation for the financial year due to increasing
demand (4.5 percent).
Chart J: Financial sustainability issues reported by agencies
16
8.
Continuous improvement by Finance
While chief executives are responsible for preparing Certificates and improving
compliance within their agencies, Finance is responsible for the administration of
the financial management framework and the Certificate process at a
whole-of-government level. It provides support to agencies through its
administration of the Certificate process and the provision of education and
guidance on the budget and financial management frameworks. Finance undertakes
five broad tasks as part of its responsibility to administer the Certificate process.
8.1. Written guidance and day-to-day support to agencies on Certificate
requirements and the financial management framework
Finance issues written guidance to agencies on key aspects of the financial
management framework and financial policies. This guidance includes Finance
Circulars, the Financial Management Guidance Series, policy guidelines and other
material available on the Finance website at http://www.finance.gov.au.
Finance has provided written guidance to agencies for each round of Certificate
reporting in five Finance Circulars since 2006. The guidance for the 2012-13 process
is contained in Finance Circular 2013/03: Certificate of Compliance – FMA Act
Agencies issued in May 2013. The Finance Circular provides guidance to agencies on
the Certificate process for 2012-13. It includes a summary table containing all the
relevant compliance elements of the FMA Act and Regulations, which was updated
to reflect recent changes in legislation during 2012-13. The Finance Circular also
includes additions to the frequently asked questions section, based on queries from
agencies.
Finance also provides day-to-day advice to agencies on the administration of the
Certificate process and the application of the financial management framework
more generally. This represents a significant ongoing commitment from Finance,
and the Finance Secretary has urged all agency chief executives to consult with
Finance as necessary on financial management framework issues, as early
consultation can lead to better compliance outcomes.
8.2. Aggregate analysis of Certificates and reporting on outcomes to key
stakeholders
Finance provides advice to the Finance Minister on the Certificate outcomes.
Following previous rounds, the Finance Minister has written to portfolio Ministers
informing them of the results of the Certificate process and suggesting that
Ministers discuss the results with their portfolio chief executives, if they had not
already done so. Similarly, the Finance Minister will write to the Prime Minister and
portfolio Ministers about the 2012-13 results and the tabling of the Report to the
Parliament.
In addition, at the conclusion of each Certificate reporting round:



the Finance Secretary writes to all agency chief executives informing them of the
overall results of the Certificate process and offering Finance’s assistance to
address issues identified in agency Certificates
Finance discusses the aggregate outcomes of the Certificate process with agency
chief financial officers (CFOs)
Finance meets with agencies that identified significant issues
17

Finance reviews current guidance on the Certificate process, based on feedback
from agencies and the Australian National Audit Office (ANAO).
8.3. Follow-up on the 2012-13 Certificate process
Finance adopts a proportional and risk-based approach to follow-up on Certificate
results. Agencies are categorised as either high-risk, medium-risk or low-risk based
on agency size and transactions; trends in non-compliance; unusually high or low
levels of reported non-compliance; and the outcomes of previous follow-up activity
and reports.
Finance will be undertaking a range of follow-up activities in respect to the 2012-13
Certificate process, including:







seeking feedback from portfolio CFOs on results and key trends
informing agency chief executives and CFOs about key trends
reviewing compliance processes, in light of lessons learned and the new
principle-based Public Governance, Performance and Accountability Act 2013
(PGPA) framework
considering financial management framework guidance, given this year’s results
and in the context of the new PGPA framework
providing training and workshops, drawing on lessons learned
continuing to raise awareness of the new procurement reporting requirements,
which significantly contributed to agency non-compliance in 2012-13
consulting with agencies based on the risk-rating of the agency which is
assessed by Finance:
- high-risk agencies are requested to meet with Finance to discuss
remediation strategies
- medium and low-risk agencies are invited to discuss any financial
management framework concerns with Finance
- all agencies are invited to information sessions on the Certificate
process which are provided by Finance.
8.4. Improving guidance and education
At the conclusion of each reporting round, Finance has met with a number of agency
CFOs, including those agencies categorised as high-risk, due to their trends in
non-compliance. These meetings provide CFOs with an opportunity to discuss how
their internal control mechanisms and mitigation strategies are being improved.
They also provide CFOs and their staff with an opportunity to raise specific issues
that relate to their agency and clarify their understanding of particular financial
management framework requirements.
Education and guidance are an important part of Finance’s strategy to improve
understanding of, and compliance with, the financial management framework.
Finance provides a suite of advice, training, guidance and tools to support agencies,
ranging from base-level introductory training to technical and/or specific advice
and training. Finance regularly provides workshops and targeted training, focusing
on the key risk areas or changes to the financial management framework that
account for the highest instances of non-compliance.
Finance has provided a number of whole-of-government information sessions on the
updated CGGs and is continuing to work with agencies to provide information
sessions to specific agencies.
18
Finance is also working with stakeholders to develop a whole-of-government grant
agreement template, to be used by agencies when entering into low-risk grants. The
template seeks to improve and streamline grant agreements between the Australian
Government and grant recipients, particularly the not-for-profit sector. Finance is
currently working with agencies piloting and using the template.
Finance maintains the Model Chief Executive’s Instructions (CEIs). The Model CEIs
seek to improve the consistency across agencies and help staff members understand
and comply with the key requirements of the financial management framework. The
Model CEIs were updated following amendments to the grants framework with the
release of the second version of the CGGs in May 2013.
Finance coordinates an interagency community of practice forum on financial
framework training and skills development. The purpose of this group is to ensure
that staff of Australian Government bodies have access to the right tools and training
to understand their responsibilities under the financial management
framework. This forum is used to share ideas, support and discuss financial training
needs and develop, pilot and evaluate new or updated training materials.
This community of practice played a key role in the design and development of the
Financial Management and Budget (FMB) training program. The FMB training
program provides information about whole-of-government financial framework
requirements. It comprises three training modules that introduce key aspects of the
financial management and budget frameworks and explain how the different
legislation, policies and processes interact to support decision-making and ensure
the proper use of public resources. The FMB training program’s modular approach
is designed to support a range of flexible delivery options. It will:


be a useful training tool to disseminate information to Australian Government
entities and their staff when changes to the financial framework occur
contribute to efficiencies across the Australian Government by reducing
training development costs.
In November 2012 and February 2013, pilots of the FMB program were delivered to
492 participants from 60 Australian Government entities. 89 percent of participants
rated the overall program as excellent or very good, and 98 percent reported that
other staff from their organisation would find the program useful.
In June 2013, the FMB training program was publicly released. Finance is currently
reviewing the FMB training material to address changes to the resource
management framework arising from the commencement of the PGPA Act on
1 July 2014. Finance will continue to convene the community of practice to ensure
that government entities are aware of changes to the FMB training materials and the
implementation of the PGPA Act.
In October 2013 Finance provided FMB training to small government entities
(i.e. those with fewer than 500 staff). This training was attended by 125 participants
from 21 entities who provided very positive feedback on the training. Further FMB
sessions for small agencies are proposed for 2014.
8.5. Improving and clarifying the financial management framework
As part of Finance’s role of continuous improvement of the financial framework, the
Public Management Reform Agenda (PMRA) seeks to modernise the financial
framework of the Australian Government so that it will support high quality
resource management and performance now, and into the future. The PGPA Act is
19
the cornerstone of the broader PMRA aimed at improving productivity, efficiency
and transparency in the public sector.
The work of updating the financial framework commenced with the Commonwealth
Financial Accountability Review in December 2010. During 2011-12, Finance
released a series of 13 issues papers to Commonwealth entities to facilitate
discussion on financial management and performance. A discussion paper was
publicly released on 27 March 2012, which was accompanied by an extensive
program of consultation. Feedback from stakeholders, including within government,
with state and territory officials, the private sector and academia, was taken on
board and firmer propositions were put forward again in a position paper on
23 November 2012.
On 16 May 2013, the PGPA Bill 2013, consolidating the Commonwealth financial
framework legislation within a single Act, was introduced into the Parliament of
Australia. Subsequently the Joint Committee of Public Accounts and Audit (JCPAA)
conducted an inquiry into the PGPA Bill and tabled their report on 4 June 2013. The
PGPA Act was passed by the Parliament on 28 June 2013 and received Royal Assent
on 29 June 2013.
Before the operative provisions of the PGPA Act come into effect on 1 July 2014,
Finance is working with relevant stakeholders to make consequential amendments to
other legislation, and develop rules and guidance material to support the
implementation of the PGPA Act. The Certificate process will be reconsidered in the
context of the new PGPA framework.
9.
Australian National Audit Office
In more recent years, the ANAO has increased its focus on legislative compliance as
part of its financial statement audit coverage. The 2012–13 interim audits identified
that, generally, agencies continue to maintain updated listings of the laws,
regulations and associated government policies that are relevant to their
responsibilities. Agencies also have well‐established processes to monitor
compliance with legislation. Processes are implemented by agencies to review the
effectiveness of how the agency is monitoring compliance with the relevant laws,
regulations and applicable government policies to enable chief executives to provide
an annual Certificate to their Minister.10
10
See ANAO Audit Report No.49 2012–13, Interim Phase of the Audits of the Financial Statements of Major General
Government Sector Agencies for the year ending 30 June 2013, p 40.
20
Part 1: 2012-13 results by category
Introduction
Table 1 and Chart 1 report on the combined total of all (14,027) instances of
non-compliance reported in 2012-13 against six categories, comprising key
elements of the financial management framework for FMA Act agencies:
i.
the commitment of public money by agencies
ii.
the use of drawing rights by agencies
iii.
the proper use of financial resources
iv.
banking and investment by agencies
v.
the maintenance of agency accounts and records
vi.
miscellaneous requirements.
Tables 1.1 to 1.6 and Charts 1.1 to 1.6 report on each portfolio group’s share of
reported instances of non-compliance in 2012-13 against the six categories. For
example, Table 1.1 and Chart 1.1 record that the Finance and Deregulation portfolio
group reported 3.3 percent of all (11,734) instances of non-compliance relating to
Category 1.
Note that there are no tables or charts for category 5 (the maintenance of agency
accounts and records) as there were no reported instances of non-compliance in
2012-13.
21
Table 1: Percentage of all non-compliance by category
2011-12
Category
i. the commitment of public money by agencies
Percentage
2012-13
Instances
Percentage
Instances
68.0%
8,708
83.7%
11,734
ii. the use of drawing rights by agencies
6.7%
857
4.4%
622
iii. the proper use of financial resources
5.1%
656
907
iv. banking and investment by agencies
17.9%
2,282
6.5%
4.2%
v. the maintenance of agency accounts and records
<0.1%
1
0
2.3%
294
0.0%
1.2%
174
12,798
100.0%
14,027
vi. miscellaneous requirements
Instances of non-compliance
100.0%
Chart 1: Instances of non-compliance by category from 2011-12 to
2012-13
22
590
Table 1.1: Category 1 (the commitment of public money by agencies) by
portfolio grouping
83.7 percent (11,734 instances) of all non-compliance related to Category 1 – the
commitment of public money by agencies. Table 1.1 records each portfolio group’s
share of Category 1.
Portfolio group’s share of all non-compliance
reported for Category 1
Defence
2011-12
2012-13
Percentage
Instances
Percentage
Instances
40.0%
3,479
24.5%
2,879
Foreign Affairs and Trade
3.2%
283
13.3%
1,560
Health and Ageing
6.1%
531
12.7%
1,495
22.9%
1,995
11.0%
1,290
Industry, Innovation, Climate Change, Science,
Research and Tertiary Education
3.0%
260
9.8%
1,150
Attorney-General's
7.2%
625
6.8%
796
Agriculture, Fisheries and Forestry
0.4%
38
3.7%
428
Finance and Deregulation
1.7%
146
3.3%
391
Sustainability, Environment, Water, Population and
Communities
3.5%
306
3.0%
347
Human Services
1.7%
148
2.0%
237
Immigration and Citizenship
4.4%
382
1.7%
196
Regional Australia, Local Government, Arts and
Sport
0.7%
58
1.5%
174
Treasury
2.3%
204
1.4%
167
Prime Minister and Cabinet
0.4%
38
1.4%
165
Infrastructure and Transport
0.5%
42
1.3%
151
Resources, Energy and Tourism
0.4%
38
1.1%
125
<0.1
2
1.0%
116
Families, Housing, Community Services and
Indigenous Affairs
0.5%
43
0.3%
36
Veterans' Affairs
0.2%
12
0.1%
16
Broadband, Communications and the Digital
Economy
0.4%
34
0.1%
15
Climate Change and Energy Efficiency
0.5%
44
N/A
N/A
100.0%
8,708
100.0%
11,734
Education, Employment and Workplace Relations
Parliament of Australia
Total
23
Chart 1.1: Category 1 (the commitment of public money by agencies) by
portfolio grouping
Chart 1.1 presents the 2012-13 data reported in Table 1.1 in graphical form.
Note: ‘Other’ includes portfolio groups whose share of the total is less than 1.5 percent
24
Table 1.2: Category 2 (the use of drawing rights by agencies) by portfolio
grouping
4.4 percent (622 instances) of all non-compliance related to Category 2 – the use of
drawing rights by agencies. Table 1.2 records each portfolio group’s share of
Category 2.
Portfolio group’s share of all non-compliance
reported for Category 2
Industry, Innovation, Climate Change, Science,
Research and Tertiary Education
2011-12
Percentage
2012-13
Instances
Percentage
Instances
-
-
28.9%
180
Treasury
26.8%
230
24.1%
150
Finance and Deregulation
30.5%
262
9.2%
57
Health and Ageing
8.1%
69
8.4%
52
Education, Employment and Workplace Relations
3.6%
31
8.0%
50
Human Services
2.7%
23
7.9%
49
Attorney-General's
0.3%
3
5.1%
32
Prime Minister and Cabinet
6.2%
53
3.1%
19
Parliament of Australia
3.5%
30
2.1%
13
Families, Housing, Community Services and
Indigenous Affairs
1.1%
9
1.3%
8
Immigration and Citizenship
0.7%
6
1.1%
7
Infrastructure and Transport
-
-
0.3%
2
Regional Australia, Local Government, Arts and
Sport
-
-
0.3%
2
Defence
9.0%
77
0.2%
1
Agriculture, Fisheries and Forestry
3.3%
28
-
-
Foreign Affairs and Trade
0.1%
1
-
-
Resources, Energy and Tourism
0.7%
6
-
-
Sustainability, Environment, Water, Population and
Communities
1.8%
15
-
-
Broadband, Communications and the Digital
Economy
-
-
-
-
Veterans' Affairs
-
-
-
-
Climate Change and Energy Efficiency
Total
1.6%
14
N/A
N/A
100.0%
857
100.0%
622
25
Chart 1.2: Category 2 (the use of drawing rights by agencies) by portfolio
grouping
Chart 1.2 presents the 2012-13 data reported in Table 1.2 in graphical form.
Note: ‘Other’ includes portfolio groups whose share of the total is less than 1.5 percent
26
Table 1.3: Category 3 (the proper use of financial resources) by portfolio
grouping
6.5 percent (907 instances) of all non-compliance related to Category 3 – the proper
use of financial resources. Table 1.3 records each portfolio group’s share of
Category 3.
Portfolio group’s share of all non-compliance
reported for Category 3
Defence
Treasury
Education, Employment and Workplace Relations
Foreign Affairs and Trade
Industry, Innovation, Climate Change, Science,
Research and Tertiary Education
2011-12
2012-13
Percentage
Instances
Percentage
Instances
15.1%
99
13.8%
125
7.6%
50
12.7%
115
19.8%
130
12.0%
109
4.9%
32
11.7%
106
8.2%
54
11.1%
101
12.5%
82
10.0%
91
Families, Housing, Community Services and
Indigenous Affairs
4.4%
29
7.3%
66
Human Services
3.5%
23
6.5%
59
Sustainability, Environment, Water, Population and
Communities
3.7%
24
3.6%
33
Broadband, Communications and the Digital
Economy
2.1%
14
2.6%
23
Finance and Deregulation
1.2%
8
1.7%
15
Prime Minister and Cabinet
0.8%
5
1.4%
13
Resources, Energy and Tourism
1.7%
11
1.4%
13
Infrastructure and Transport
1.0%
6
1.0%
9
Agriculture, Fisheries and Forestry
2.4%
16
0.9%
8
Veterans' Affairs
1.1%
7
0.9%
8
Parliament of Australia
2.1%
14
0.6%
5
Health and Ageing
0.6%
4
0.4%
4
Immigration and Citizenship
3.2%
21
0.3%
3
Regional Australia, Local Government, Arts and
Sport
1.7%
11
0.1%
1
Climate Change and Energy Efficiency
2.4%
16
N/A
N/A
100.0%
656
100.0%
907
Attorney-General's
Total
27
Chart 1.3: Category 3 (the proper use of financial resources) by portfolio
grouping
Chart 1.3 presents the 2012-13 data reported in Table 1.3 in graphical form.
Note: ‘Other’ includes portfolio groups whose share of the total is less than 1.5 percent
28
Table 1.4: Category 4 (banking and investment by agencies) by portfolio
grouping
4.2 percent (590 instances) of all non-compliance related to Category 4 – banking
and investment by agencies. Table 1.4 records each portfolio group’s share of
Category 4.
Portfolio group’s share of all non-compliance
reported for Category 4
2011-12
2012-13
Percentage
Instances
Percentage
Instances
43.4%
990
32.6%
192
Defence
2.9%
65
18.3%
108
Health and Ageing
2.6%
60
9.8%
58
Attorney-General's
4.5%
103
6.6%
39
Treasury
7.2%
163
6.3%
37
17.5%
400
5.9%
35
Finance and Deregulation
1.2%
28
5.1%
30
Prime Minister and Cabinet
4.7%
108
5.1%
30
Immigration and Citizenship
9.3%
212
3.2%
19
Sustainability, Environment, Water, Population and
Communities
2.6%
59
2.9%
17
Foreign Affairs and Trade
0.9%
21
2.2%
13
Agriculture, Fisheries and Forestry
1.3%
29
1.0%
6
Parliament of Australia
1.0%
22
0.3%
2
-
-
0.3%
2
Human Services
Industry, Innovation, Climate Change, Science,
Research and Tertiary Education
Regional Australia, Local Government, Arts and
Sport
Infrastructure and Transport
-
-
0.2%
1
Resources, Energy and Tourism
0.1%
2
0.2%
1
Education, Employment and Workplace Relations
0.3%
7
-
-
Veterans' Affairs
0.5%
12
-
-
Broadband, Communications and the Digital
Economy
-
-
-
-
Families, Housing, Community Services and
Indigenous Affairs
-
-
-
-
Climate Change and Energy Efficiency
Total
<0.1%
1
N/A
N/A
100.0%
2,282
100.0%
590
29
Chart 1.4: Category 4 (banking and investment by agencies) by portfolio
grouping
Chart 1.4 presents the 2012-13 data reported in Table 1.4 in graphical form.
Note: ‘Other’ includes portfolio groups whose share of the total is less than 1.5 percent
30
Table 1.6: Category 6 (miscellaneous requirements) by portfolio
grouping
1.2 percent (174 instances) of all non-compliance related to Category 6 –
miscellaneous requirements. Table 1.6 records each portfolio group’s share of
Category 6. See page 13 for further information on this category.
Portfolio group’s share of all non-compliance
reported for Category 6
2011-12
2012-13
Percentage
Instances
Percentage
Instances
52.4%
154
37.9%
66
Education, Employment and Workplace Relations
0.7%
2
19.0%
33
Finance and Deregulation
8.5%
25
9.2%
16
Immigration and Citizenship
4.1%
12
8.1%
14
Defence
5.1%
15
5.2%
9
Prime Minister and Cabinet
1.7%
5
4.0%
7
Sustainability, Environment, Water, Population and
Communities
5.5%
16
3.5%
6
Attorney-General's
4.8%
14
2.3%
4
Parliament of Australia
0.3%
1
2.3%
4
Foreign Affairs and Trade
Treasury
0.3%
1
1.7%
3
Infrastructure and Transport
-
-
1.7%
3
Resources, Energy and Tourism
-
-
1.7%
3
0.3%
1
1.1%
2
10.2%
30
1.1%
2
Families, Housing, Community Services and
Indigenous Affairs
1.4%
4
0.6%
1
Health and Ageing
1.0%
3
0.6%
1
Broadband, Communications and the Digital
Economy
3.4%
10
-
-
Regional Australia, Local Government, Arts and
Sport
0.3%
1
-
-
Human Services
-
-
-
-
Veterans' Affairs
-
-
-
-
Climate Change and Energy Efficiency
-
-
N/A
N/A
100.0%
294
100.0%
174
Agriculture, Fisheries and Forestry
Industry, Innovation, Climate Change, Science,
Research and Tertiary Education
Total
31
Chart 1.6: Category 6 (miscellaneous requirements) by portfolio
grouping
Chart 1.6 presents the 2012-13 data reported in Table 1.6 in graphical form.
Note: ‘Other’ includes portfolio groups whose share of the total is less than 1.5 percent
32
Part 2: 2012-13 results by portfolio
group
Introduction
Table 2 and Chart 2 report on each portfolio group’s share of the combined total of
all (14,027) reported instances of non-compliance in 2012-13. For example, Table 2
and Chart 2 record that the Finance and Deregulation portfolio group reported 3.6
percent of all (14,027) instances of non-compliance.
Charts 2.1 to 2.20 report on the types of non-compliance reported by each portfolio
group, against six categories, comprising key elements of the financial management
framework for FMA Act agencies:
i.
the commitment of public money by agencies
ii.
the use of drawing rights by agencies
iii.
the proper use of financial resources
iv.
banking and investment by agencies
v.
the maintenance of agency accounts and records
vi.
miscellaneous requirements.
For example, Chart 2.7 records that the types of non-compliance reported by the
Finance and Deregulation portfolio group related to Category 1 (the commitment of
public money by agencies), Category 2 (the use of drawing rights by agencies),
Category 3 (the proper use of financial resources), Category 4 (banking and
investment by agencies) and Category 6 (miscellaneous requirements). Chart 2.7
also records the proportion of instances of non-compliance relating to the above
categories.
33
Table 2: Percentage of all non-compliance by portfolio grouping
2011-12
Portfolio group’s share of all noncompliance reported
2012-13
Percentage
Instances
Percentage
Instances
29.2%
3,735
22.3%
3,122
Foreign Affairs and Trade
2.6%
338
12.0%
1,682
Health and Ageing
5.2%
667
11.4%
1,610
16.9%
2,165
10.6%
1,482
Industry, Innovation, Climate Change, Science,
Research and Tertiary Education
5.8%
744
10.4%
1,468
Attorney-General's
6.5%
828
6.9%
962
Human Services
9.3%
1,184
3.8%
537
Treasury
6.3%
801
3.8%
535
Finance and Deregulation
3.7%
469
3.6%
509
Agriculture, Fisheries and Forestry
0.9%
112
3.2%
444
Sustainability, Environment, Water, Population
and Communities
3.3%
420
2.9%
403
Immigration and Citizenship
4.9%
633
1.7%
239
Prime Minister and Cabinet
1.6%
209
1.7%
234
Regional Australia, Local Government, Arts and
Sport
0.5%
70
1.3%
179
Infrastructure and Transport
0.4%
48
1.1%
166
Resources, Energy and Tourism
0.4%
57
1.0%
142
Parliament of Australia
0.5%
69
1.0%
140
Families, Housing, Community Services and
Indigenous Affairs
0.7%
85
0.8%
111
Broadband, Communications and the Digital
Economy
0.5%
58
0.3%
38
Veterans' Affairs
0.2%
31
0.2%
24
Climate Change and Energy Efficiency
0.6%
75
N/A
N/A
100.0%
12,798
100.0%
14,027
Defence
Education, Employment and Workplace
Relations
Total
34
Chart 2: Percentage of all non-compliance by portfolio grouping for
2012-13
Chart 2 presents the 2012-13 data reported in Table 2 in graphical form.
Note: ‘Other’ includes portfolio groups whose share of the total is less than or equal to 1.5 percent
35
Chart 2.1: Agriculture, Fisheries and Forestry portfolio group
Chart 2.2: Attorney-General's portfolio group
36
Chart 2.3: Broadband, Communications and the Digital Economy
portfolio group
Chart 2.4: Defence portfolio group
37
Chart 2.5: Education, Employment and Workplace Relations
portfolio group
Chart 2.6: Families, Housing, Community Services and Indigenous
Affairs portfolio group
38
Chart 2.7: Finance and Deregulation portfolio group
Chart 2.8: Foreign Affairs and Trade portfolio group
39
Chart 2.9: Health and Ageing portfolio group
Chart 2.10: Human Services portfolio group
40
Chart 2.11: Immigration and Citizenship portfolio group
Chart 2.12: Infrastructure and Transport portfolio group
41
Chart 2.13: Industry, Innovation, Climate Change, Science, Research and
Tertiary Education portfolio group
Chart 2.14: Parliament of Australia portfolio group
42
Chart 2.15: Prime Minister and Cabinet portfolio group
Chart 2.16: Regional Australia, Local Government, Arts and Sport
portfolio group
43
Chart 2.17: Resources, Energy and Tourism portfolio group
Chart 2.18: Sustainability, Environment, Water, Population and
Communities portfolio group
44
Chart 2.19: Treasury portfolio group
Chart 2.20: Veterans' Affairs portfolio group
45
Appendix: List of portfolio groups for
Certificate purposes
Appendix
Composition of Portfolio Groups as at 30 June 2013
Agriculture, Fisheries and Forestry portfolio group:
Australian Fisheries Management Authority
Australian Pesticides and Veterinary Medicines Authority
Department of Agriculture, Fisheries and Forestry
Attorney-General’s portfolio group:
Administrative Appeals Tribunal
Attorney-General’s Department
Australian Commission for Law Enforcement Integrity
Australian Crime Commission
Australian Customs and Border Protection Service
Australian Federal Police
Australian Human Rights Commission
Australian Institute of Criminology
Australian Law Reform Commission
Australian Security Intelligence Organisation
Australian Transaction Reports and Analysis Centre
CrimTrac Agency
Family Court of Australia
Federal Court of Australia
Federal Magistrates Court of Australia
Insolvency and Trustee Service Australia
Office of the Australian Information Commissioner
Office of Parliamentary Counsel
Office of the Director of Public Prosecutions
46
Broadband, Communications and the Digital Economy portfolio group:
Australian Communications and Media Authority
Department of Broadband, Communications and the Digital Economy
Telecommunications Universal Service Management Agency
Defence portfolio group:
Defence Materiel Organisation
Department of Defence
Education, Employment and Workplace Relations portfolio group:
Department of Education, Employment and Workplace Relations
Fair Work Commission
Office of the Fair Work Building Industry Inspectorate
Office of the Fair Work Ombudsman
Safe Work Australia
Seafarers Safety, Rehabilitation and Compensation Authority (Seacare Authority)
Families, Housing, Community Services and Indigenous Affairs portfolio group:
Australian Institute of Family Studies
Department of Families, Housing, Community Services and Indigenous Affairs
Workplace Gender Equality Agency
Finance and Deregulation portfolio group:
Australian Electoral Commission
ComSuper
Department of Finance and Deregulation
Future Fund Management Agency
Foreign Affairs and Trade portfolio group:
AusAID
Australian Centre for International Agricultural Research
Australian Secret Intelligence Service
Australian Trade Commission
Department of Foreign Affairs and Trade
47
Health and Ageing portfolio group:
Australian National Preventive Health Agency
Australian Organ and Tissue Donation and Transplantation Authority
Australian Radiation Protection and Nuclear Safety Agency
Cancer Australia
Department of Health and Ageing
Independent Hospital Pricing Authority
National Blood Authority
National Health and Medical Research Council
National Health Funding Body
National Health Performance Authority
Private Health Insurance Ombudsman
Professional Services Review Scheme
Human Services portfolio group:
Department of Human Services
Immigration and Citizenship portfolio group:
Department of Immigration and Citizenship
Migration Review Tribunal and Refugee Review Tribunal
Industry, Innovation, Climate Change, Science, Research and Tertiary
Education portfolio group:
Australian Research Council
Australian Skills Quality Authority
Clean Energy Regulator
Climate Change Authority
Department of Industry, Innovation, Climate Change, Science, Research and Tertiary
Education
IP Australia
Tertiary Education Quality and Standards Agency
48
Infrastructure and Transport portfolio group:
Australian Transport Safety Bureau
Department of Infrastructure and Transport
Parliament of Australia portfolio group:
Department of Parliamentary Services
Department of the House of Representatives
Department of the Senate
Parliamentary Budget Office
Prime Minister and Cabinet portfolio group:
Australian National Audit Office
Australian Public Service Commission
Department of the Prime Minister and Cabinet
National Mental Health Commission
Office of National Assessments
Office of the Commonwealth Ombudsman
Office of the Inspector-General of Intelligence and Security
Office of the Official Secretary to the Governor-General
Regional Australia, Local Government, Arts and Sport portfolio group:
Australian Sports Anti-Doping Authority
Department of Regional Australia, Local Government, Arts and Sport
National Archives of Australia
National Capital Authority
Old Parliament House
Resources, Energy and Tourism portfolio group:
Department of Resources, Energy and Tourism
Geoscience Australia
National Offshore Petroleum Safety and Environmental Management Authority
49
Sustainability, Environment, Water, Population and Communities portfolio
group:
Bureau of Meteorology
Department of Sustainability, Environment, Water, Population and Communities
Great Barrier Reef Marine Park Authority
Murray-Darling Basin Authority
National Water Commission
Treasury portfolio group:
Australian Bureau of Statistics
Australian Competition and Consumer Commission
Australian Office of Financial Management
Australian Prudential Regulation Authority
Australian Securities and Investments Commission
Australian Taxation Office
Commonwealth Grants Commission
Corporations and Markets Advisory Committee
Department of the Treasury
Inspector-General of Taxation
National Competition Council
Office of the Auditing and Assurance Standards Board
Office of the Australian Accounting Standards Board
Productivity Commission
Royal Australian Mint
Veterans’ Affairs portfolio group:
Department of Veterans’ Affairs
50