Management of financial resources
The department’s operations in Australia and overseas are underpinned by a sound and prudent financial resource management framework, which includes effective internal controls and regular budgeting performance reports.
In the ANAO’s Interim Phase of the Audit of Financial Statements of General Government Sector Agencies for the Year ending 30 June 2010, tabled in Parliament in June 2010, the ANAO acknowledged that the department has effective internal controls in place to ensure good financial management and a sound financial reporting framework. The ANAO found no audit issues of a significant nature in our financial statements.
In the 2009–10 Budget, the Government provided additional funding to enhance the ability of the department to advance the interests of Australia and Australians internationally:
- $281.3 million over four years in new departmental funding (non-property)
- $51.8 million to reverse savings that were due to impact on the department’s budget in 2009–10
- $163.6 million over four years for property projects.
Through the 2009–10 Additional Estimates, the Government provided additional funding of $33.6 million for new measures and routine adjustments, net of a reduction of $6.7 million to deliver savings to the Government.
In 2009–10 the department paid to the Consolidated Revenue Fund a dividend of $986 200 from the Overseas Property Special Account.
There have been no developments since 30 June 2010 that have affected or may significantly affect future operations or financial results of the department.
Financial management information system
The department commenced a large-scale program of work to upgrade the financial management information system, SAP. This work will be undertaken over the next two financial years. The program will deliver productivity improvements and enhanced functionality.
A rigorous capital funding process was in place to ensure work units provided well-argued business cases to seek capital funds. Bids are assessed twice a year by the Executive. Concurrently, the Executive, in addition to receiving monthly budget reports, reviews in detail the progress of previously approved projects. Work areas continually review and update their asset purchasing and disposal needs as part of a five-year asset plan.
In 2005–06, the department moved to a five-year rolling cycle for asset revaluations. Under the rolling plan, asset classes are revalued once every five years. The only exceptions are land and buildings, which are revalued every year. Informal reviews and impairment testing of asset classes are conducted annually to ensure asset values are fairly stated in the end of year accounts. In 2009–10, the Information Technology equipment and Land and Building asset classes were formally revalued under the rolling cycle.
Competitive tendering and contracting
The department commenced a continuous improvement program of procurement guidelines and templates in response to recommendations from a recent ANAO performance review. It participated in the evaluation of the procurement of the Whole-of-Australian-Government Air Travel and Travel Management Services.
Our procurement policy and the contractual arrangements entered into by the department comply with all relevant Commonwealth procurement policies and legislation, in particular the Commonwealth Procurement Guidelines.
All competitive tendering and contracts of $100 000 or more (inclusive of GST) let during the reporting period allow access for the Auditor-General to the contractors’ premises.
There were no contracts in excess of $10 000 or standing offers exempted from being published in the Purchasing and Disposal Gazette (AusTender) on the basis that publication would disclose exempt matters under the Freedom of Information Act 1982.
During 2009–10, 48 new consultancy services contracts were entered into involving total actual expenditure of $2 031 090 (inclusive of GST). In addition, 11 ongoing consultancy contracts were active during the 2009–10 year, involving total actual expenditure of $1 470 798 (inclusive of GST).
A detailed list and actual expenditure of all consultancy contracts let during the year to the value of $10 000 or more is available in Appendix 12: Consultancy services.
Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies to the value of $10 000 or more is available on the AusTender website .
Nathan Leonard joined the department in February 2006, as Manager of the Canberra Passport Office. In 2009, he was selected to undertake a two-year traineeship as part of the Administrative Development Program (ADP). This departmental program is designed to further develop individuals’ administrative skills and corporate knowledge, to enhance the effective management of administrative processes in Australia’s overseas missions.
As part of the ADP, Nathan has completed a number of placements in Australia and overseas, including in the Consular Operations Section and the Audit and Evaluation Section. He will soon begin a short-term mission in Riyadh, Saudi Arabia, as acting Senior Administrative Officer.
“The Administrative Development Program has proved to be a fantastic opportunity. It has provided me with a broad range of skills and experience that I look forward to applying in the overseas environment.”
Overseas property—leased estate
The department leases approximately 530 properties overseas, including chanceries, head of mission residences, staff accommodation and other facilities.
Overseas leased estate projects underway, or in the planning and development stages in 2009–10, included relocation of the chanceries in Ho Chi Minh City, Nicosia and Stockholm, as well as establishment of new chanceries in Addis Ababa, Lima and the Holy See and new offices for DFAT-led consulates-general in Chennai and Mumbai. The relocation of the chancery in Seoul to new premises was completed during the year.
The department leases office accommodation for its operations in Canberra, each of the state capitals, Darwin and Newcastle, as well as on Thursday Island, where it also owns a residence.
The department continued its commitment to incorporating environmentally sustainable measures in its operations. Its Environmental Management System (EMS) for the R G Casey Building in Canberra underwent recertification in May 2010 and continues to comply with International Standard ISO 14001.
In 2010–11, the department will work to strengthen its risk management framework, to increase training of staff on risk management issues and to keep under review strategies to mitigate against the department’s critical risks. We will also work to embed best practice business continuity management across the department following our comprehensive review of practices in 2009–10.
The department will continue to work closely with other portfolio agencies to coordinate policy responses. The expansion of the aid program will require continued close coordination between AusAID and DFAT, particularly through the DESC, to ensure a whole-of-government focus is maintained.
We will continue to monitor closely our budget expenditure. The department will focus on the efficient implementation of new policy objectives of the Government, including the expansion of our diplomatic presence in Afghanistan, strengthening of Australia’s consulates-general in Chennai and Mumbai, the transfer of security arrangements at our embassy in Baghdad and the establishment of a diplomatic presence in Lima and Addis Ababa.
The implementation of the new one-year enterprise agreement will be a priority. Negotiation of a new enterprise agreement will also be required.
We will undertake a number of initiatives to improve efficiencies, including the implementation of Whole-of-Australian-Government Travel Management Services, upgrading our financial management system to enable improved business practices, implementing an ICT Capability Improvement Plan and delivering efficiencies in payroll services.