Annual Report 2003-2004
 

Annual Report home |

Table of Contents |

Userguide |

Download versions

1. Overviews2. Performance3. Corporate4. Financials5. Appendixes6. Glossaries and Compliance Index

Your location: Corporate Management and Accountability > Management of financial resources

Management of financial resources

The department's financial resource management function supports our operations in Australia and overseas by:

The department improved its financial management tools by redeveloping financial management policies and instructions, revamping financial management training for staff going overseas on posting and improving management information system instructions.

In the ANAO's review of major government agencies' control structures that underpin the 2003–04 financial statements, tabled in Parliament in June 2004, the department ranked equal first, with no significant business or financial risk noted. The ANAO said that we had maintained a strong focus on continuously improving the quality of our financial information, reporting systems and processes, covering an extensive overseas network.

In 2003–04 the Government provided the department with further appropriation funding through the Additional Estimates process to improve physical security at overseas posts. This funding, totalling $11.1 million in 2003–04, $25.8 million in 2004–05, $17.4 million in 2005–06, $13.8 million in 2006–07 and $6.5 million in 2007–08, allows for the introduction of various security detection systems, the upgrade of chancery and residential security and improved emergency communications at overseas posts. It also provides for the accelerated relocation of six Australian missions in high-risk regions.

The department, including the operations of the Overseas Property Office (OPO), recorded an operating surplus of $155.7 million for 2003–04 before the payment of dividends. Dividends of $131.5 million were paid during the year, consisting of:

The department received audit clearance of its financial statements from the ANAO on 30 July 2004. The ANAO has again issued an unqualified audit report with no findings being made in relation to its audit of our financial statements.

Our major focus for 2004–05 will be twofold: to work towards the new advanced audit clearance deadline of 20 July for the 2004–05 financial year, and to implement a transition strategy for reporting under internationally harmonised accounting standards on 1 July 2005.

There have been no developments or events since 30 June 2004 that have affected or will affect the operations or financial results of the department.

Harmonisation with International Accounting Standards

From the financial year ending 30 June 2006, revised Australian Accounting Standards that are consistent with International Accounting Standards (IAS) will apply to the department. Financial information will have to be presented as though the new standards had always applied.

The department has implemented a comprehensive strategy in line with Department of Finance and Administration recommendations to deal with issues associated with the adoption of IAS. Key elements of the strategy are as follows.

Human resource management information system

We introduced a single sign-on for the department's human resource management information system, PeopleSoft. This enables all Australian-employed staff, in Australia and at overseas posts, to access the Employee Self Serve (ESS) function of PeopleSoft without having to enter user details and a password a second time. This feature, with its inbuilt security characteristics, has streamlined access to the system for users and significantly reduced the number of password-related calls to the PeopleSoft helpdesk.

The department uses SAP payroll and standard HR for locally engaged staff in London, Washington, New York, Chicago, Los Angeles and Honolulu. The Recruitment, Training, and Qualifications and Competencies module was implemented for Washington, New York, Chicago, Los Angeles and Honolulu during October 2003. ESS was implemented for locally engaged staff in London, Washington, New York, Chicago, Los Angeles and Honolulu in May 2004. This provides significant new functionality to London and US posts. It enables staff to apply electronically for leave and take charge of the maintenance of their own HR data, as is the case for Australian-employed staff with PeopleSoft, with resultant economies in HR management in London and Washington.

The department is assessing the feasibility of implementing a global human resources management information system for locally engaged staff. Posts currently use numerous systems to record and account for critical LES conditions of service data. The evaluation of this data will help determine the complexity of the design, implementation and maintenance of a global system and long-term feasibility.

Financial management information system

During the year we undertook substantial work in SAP to reduce the considerable manual effort and improve the management and reporting of Special Accounts. There was also a requirement to develop more detailed reports to enable the users to report to the boards on expenditure on grants and projects. These changes will come into effect from 1 July 2004.

We completed a review of the provision of SAP training in September 2003, which identified a number of areas where improvements could be made to both the content and delivery of training. The outcome of the review was a more focused delivery of training for finance managers.

Assets management

The department improved its asset management by better scrutinising work areas' asset-acquisition proposals. Work areas continued to improve their five-year asset replacement planning cycle, and pursued leasing options in lieu of asset purchase, for example, for computers and photocopiers.

In 2003–04 the department revalued eight asset classes: vehicles, information technology equipment with a useful life of five years, information technology equipment with a useful life of ten years, plant and equipment with a useful life of five years, plant and equipment with a useful life of ten years, furniture and fittings, office equipment and leasehold improvements. The revaluation prepared for the transition to comply with new international accounting standards in 2005–06 and to conform with the requirements of current accounting standards. From 2002–03 we adopted 'fair value' as the valuation methodology for property, plant and equipment.

Competitive tendering and contracting (CTC)

The department updated and supplemented documentation for tendering and contracting, available to all staff via the department's intranet. This is an ongoing process that will include a review of standard departmental contracts.

We amended the department's website to include notification of all tenders, including restricted tenders, as well as expressions of interest and pre-tender notices.

New contracts for outsourced services exceeding $100 000 included:

Other major new contracts signed during the year included:

All CTC contracts of $100,000 or more let during the reporting period provide for the Auditor-General to have access to the contractors' premises.

Purchasing performance

The department's procurement policy provides the means for the efficient, effective and ethical delivery of the Government's purchasing and procurement programs. All contractual arrangements entered into were conducted within the Commonwealth procurement guidelines, industry development policies and the department's Procurement manual guidelines. There were no contracts in excess of $2000 or standing offers exempted from being published in the Purchasing and Disposal Gazette on the basis that publication would disclose exempt matters under the Freedom of Information Act 1982.

Consultancy services

The department engages specialists and recognised experts on an ad hoc basis where it lacks specialist expertise, or where independent assessments or input are considered desirable.

The selection process for consultancy services both in Australia and at overseas posts is consistent with our broader procurement policies and the Commonwealth procurement guidelines. The total expenditure on consultancy services during the year was $6 344 084, including 102 new consultancy contracts. More detailed information, including a summary of the department's policy on the selection and engagement of consultants and a detailed list of all consultancy contracts let during the year to the value of $10 000 or more, is available in an appendix to the Internet version of the annual report at www.dfat.gov.au/dept/annual_reports.

Overseas property—leased estate

The overseas estate comprises owned and leased properties. Management of the overseas owned estate is the responsibility of the Overseas Property Office (OPO) and is funded from a Special Account (see Outcome 4). Aspects of the department's overseas leased estate are also managed by OPO but are funded from departmental appropriations.

The leased estate comprises properties leased from private landlords. The department leases nearly 500 such properties, including chanceries and head of mission residences, as well as staff accommodation and other facilities. The department provides funding to overseas posts to pay for leased properties. Post responsibilities include payment of office and residential rent, meeting tenant maintenance obligations and maintaining furniture. Funds for any additional commercial leases, substantial rent increases and chancery fit-outs are held and managed centrally.

OPO retains a role in relation to the leased estate in overseeing project management and providing technical support for refurbishments and relocations of leased chanceries and head of mission residences.

Properties in the overseas leased estate must satisfy both functional needs and security requirements arising from the current international environment. Staff welfare and occupational health and safety requirements are also key considerations in managing the estate.

Overseas leased chancery projects completed during 2003–04 included the relocation of our chanceries in Beirut and Dublin, and establishment of the chancery in Abuja following the High Commission's move to the Nigerian capital from its former offices in Lagos. Projects initiated in 2003–04 included chancery projects for new posts in Accra, Kuwait and Port of Spain, and several chancery relocations including more suitable accommodation for the Australian Representative Office in Baghdad. Work is also proceeding to relocate two chanceries—in Port Vila and Tehran—to provide improved protection against local seismic risks.

Head of mission residence refurbishments and furniture and fittings upgrades are also managed from centrally held funds. In 2003–04 we completed furniture upgrades for the official residence in Tokyo and began upgrades for the residences in Apia, Ankara, Athens and Colombo.

Domestic property

Within Australia, the department provides leased office accommodation for staff in Canberra, the state capitals, Darwin, Newcastle and Thursday Island. The Canberra Passport Production Centre was formally opened on 1 December 2003 and the Hobart Office moved to new premises in August 2003. We worked with Sydney Airport to sign a new lease with effect from July 2004 for an enlarged diplomatic mails facility.

The R G Casey Building housing our central headquarters was subject to a rent review in June 2004. The independent valuer appointed to determine a fair market rental value for the building agreed with the department's case that no rent increase was justified. The department further developed its Environmental Management System (EMS) in line with whole-of-government objectives to reduce the impact of government operations on the environment. See Appendix 8 for more information.

We improved physical security within and around the R G Casey Building and at state and territory offices, commensurate with overall threat levels. This included the construction of a discreet barrier, in keeping with surroundings, designed to restrict vehicle access to the rear of the R G Casey Building. Ongoing reviews of the five-year contract with the Australian Protective Service for the provision of guarding services at the R G Casey Building and at three overseas posts confirmed a consistent high level of performance.

Return to top of page

Next page: Financial statements
Previous page: Management of human resources

Department of Foreign Affairs and Trade Annual Report 2003–2004
Home | Table of Contents | Userguide | Download versions
Overviews | Performance | Corporate | Financials | Appendixes | Glossaries and Compliance Index



Australian Government
Department of Foreign Affairs and Trade
Home | Copyright | Disclaimer | Privacy

 

Valid XHTML 1.0 Valid CSS