Annual Report 2004-2005

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External scrutiny

Reports by the Australian National Audit Office

The Auditor-General tabled in Parliament a number of audit reports relevant to departmental operations. Two audits were specific to our operations and six cross-agency audits required our response.

The two ANAO reports relating directly to the department were:

Report No. 8: Management of Bilateral Relations with Selected Countries

The objective of the audit was to assess the department's management of bilateral relations and to identify any scope for improvement. We have implemented both recommendations arising from the report: to improve the integration of risk management in our strategic planning and review processes; and to strengthen reporting against outcome indicators in the department's Performance Information Framework.

Report No. 28: Protecting Australian Missions and Staff Overseas

The audit's overall objective was to assess the management of the physical protection of Australian missions and staff overseas. The department was the main focus of the audit, given its responsibility for security at some 80 overseas missions. The audit also included limited coverage of Austrade, which has responsibility for security of the 17 consulates it operates. Because of the sensitive security nature of this document, details of this audit report are not available for public dissemination.

The cross-agency ANAO reports requiring responses from the department were:

Report No. 3: Management of Internal Audit in Commonwealth Organisations

The audit examined whether selected Commonwealth organisations had used better practice principles when establishing the role, and managing the use, of their internal audit groups. In evaluating internal audit processes, the audit considered the status and accountabilities of internal audit within the overall governance framework of the organisations audited, in particular its accountabilities to the audit committee. The department has implemented all eight recommendations resulting from the report.

Report No. 13: Superannuation Payments for Independent Contractors working for the Australian Governmen t

This audit examined whether Commonwealth organisations were identifying contracts that were wholly or principally for the labour of the contractor and meeting statutory superannuation obligations under the Superannuation (Productivity Benefit) Act 1988. The ANAO recommended that agencies ensure their administrative processes adequately controlled the risks of contracting with individuals; and that agencies address the risk that statutory obligations in past and current contracts have not been met. The department is confident that its current arrangements adequately control the risks concerned, and that the risk of superannuation liabilities in past cases has been adequately addressed.

Report No. 15: Financial Management of Special Appropriations

The audit sought to: identify all Special Appropriations and ascertain which entities are responsible for their financial management and reporting; and assess entities' financial management and reporting of Special Appropriations against the Commonwealth's financial management and reporting frameworks. The audit examined the financial management of all Special Appropriations in the period 1998–99 to 2002–03, with the exception of those related to Special Accounts and those administered by Government Business Enterprises. The department has implemented the three recommendations relevant to our operation.

Report No. 26: Measuring the Efficiency and Effectiveness of E-Government

This audit was designed to identify the methods used by selected agencies to: measure the efficiency and effectiveness of their delivery of services through the Internet; evaluate the adequacy of these methods; and identify better practices and opportunities for improvement. The department has implemented all seven recommendations.

Report No. 37: Management of Business Support Service Contracts

The audit examined the management of business support service contracts in selected agencies to: assess the effectiveness of business support service contract management in the transition, ongoing management and monitoring and succession planning stages of the contract management lifecycle; and identify examples of better practice and opportunities for improvement for individual agencies and Australian Government agencies more broadly. The department has implemented the report's two recommendations.

Report No. 41: Administration of Security Incidents, including the Conduct of Security Investigations

The audit evaluated the policies and practices of selected organisations to determine whether they had established sound arrangements for, and maintained effective control over, the administration of security incidents and investigations. The department has implemented all seven recommendations.

The department is currently examining the recommendations contained in the following five cross-agency reports tabled in May–June 2005:

Courts and administrative tribunals

Thirteen legal matters were resolved during the reporting period. Of these, eight were resolved in favour of the department and five were withdrawn by the applicants. Four other decisions in favour of the department are subject to appeal or other legal process. Details of these and other matters currently before the courts and administrative tribunals are at Appendix 7.

Parliamentary committees

The department made submissions or gave evidence to 19 parliamentary committee inquiries. In addition, departmental staff appeared before the Joint Standing Committee on Treaties on seven occasions in relation to proposed treaty actions (see Appendix 6 for further details).


The Commonwealth Ombudsman investigated 28 issues with respect to the department's activities in 2004–05 and arrived at three negative findings. No formal reports were issued.


The department managed effectively the process for adoption of all portfolio-related legislation. The US Free Trade Agreement Implementation Act 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Act 2004, implementing Australia's obligations under the Australia–United States Free Trade Agreement, were assented to on 16 August 2004.

The department drafted and facilitated the adoption of the Australian Passports Act 2005, the Australian Passports (Application Fees) Act 2005 and the Australian Passports (Transitionals and Consequentials) Act 2005, which received assent on 18 February 2005. These acts introduced major improvements to the regulation of passports (see sub-output 2.1.2 for more information).

The Consular Privileges and Immunities (Amendment) Bill 2005 was successfully introduced into the Senate on 16 March 2005.

We facilitated the enactment and variation of several regulations, including changes for the introduction of the new passports regime, implementation of sanctions in accordance with our obligations to implement UN Security Council resolutions, and various changes to privileges and immunities.

We contributed to the development of legislation initiated by other portfolios that affected the foreign affairs and trade portfolio.

Compensation for detriment caused by defective administration

Nine cases were lodged under the compensation scheme for detriment caused by defective administration. Four cases were resolved satisfactorily, three of which were ongoing from previous financial years, resulting in five payments made from administered funds. Three cases were rejected and six cases remained in progress at the end of the financial year, one of which was lodged in the previous financial year. Five cases lodged in previous financial years have not been pursued by the claimants.

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Department of Foreign Affairs and Trade Annual Report 2004–2005
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