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 Major General Government Sector Agencies for the year ending 30 June 2011 tabled in Parliament in June 2011, the ANAO acknowledged that the department has effective internal controls 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 2010–11 Budget, the Government provided additional funding of $211.7 million over four years for new measures to advance the interests of Australia and Australians internationally. This included funding for our civilian engagement in Afghanistan, transition towards civilian security arrangements in Baghdad and the Passports Redevelopment Program.
Through the 2010–11 Additional Estimates, the Government provided additional funding of $4.1 million for new measures and routine adjustments.
Effective 1 January 2011, the Government decided to increase application fees for passports and automatically index subsequent annual increases to the Consumer Price Index.
Following the joint DFAT/Finance review of OPO, the department is no longer required to pay an annual dividend to the Consolidated Revenue Fund from the Overseas Property Special Account.
There have been no developments since 30 June 2011 that have affected or may significantly affect future operations or financial results of the department.
Financial management information system
The department is continuing a large-scale program of work to upgrade the financial management information system. A major platform upgrade was completed with the program now concentrating on productivity improvements and enhanced functionality.
A rigorous capital funding process ensures work units provide well-argued business cases to seek capital funds. Bids are assessed twice-yearly by the Executive. The Executive, in addition to receiving monthly budget reports, reviews the progress of previously approved projects. Work areas review and update their asset purchasing and disposal needs as part of a five-year asset plan.
The department operates a rolling cycle for asset revaluations, which revalues each asset class every five years. The only exceptions are land and buildings, which are revalued annually. 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 2010–11, the motor vehicles and office equipment asset classes were formally revalued under the rolling cycle.
Competitive tendering and contracting
The department continued to improve procurement guidelines and templates with a view to implementing a more strategic approach to procurement and contract management.
Procurement policy and 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 2010–11 provide access for the Auditor-General to the contractors’ premises.
Whole-of-Australian Government Travel Management Services
The department transitioned to the Whole-of-Australian Government Travel Management Services and undertook a competitive process to select a Travel Management Company from the panel established by the Department of Finance and Deregulation.
There were no contracts in excess of $10 000 (including GST) or standing offers exempted from publication in the Purchasing and Disposal Gazette (AusTender) on the basis that publication would disclose exempt matters under the Freedom of Information Act 1982.
During 2010–11, 12 new consultancy contracts were entered into involving total actual expenditure of $328 114. In addition, 17 ongoing consultancy contracts were active during the 2010–11 year, involving total actual expenditure of $1 133 010.
|Expenditure on new consultancy contracts||$2 256 976||$2 031 090||$328 114|
|Expenditure on ongoing consultancy contracts||$1 063 149||$1 470 798||$1 133 010|
|Total||$3 320 125||$3 501 888||$1 461 124|
A detailed list of all consultancy contracts let during 2010–11 to the value of $10 000 or more (including GST) is 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 (including GST) is on the AusTender website at www.tenders.gov.au.
Overseas property–leased estate
Office accommodation for the department’s operations in Australia is provided through commercially-leased premises in Canberra and each state capital, Darwin and Newcastle. The department also owns a residence on Thursday Island for the head of the Torres Strait Treaty Liaison Office.
The department will continue to work closely with other portfolio agencies to coordinate policy responses. Continued expansion of the aid program will require ongoing coordination between AusAID and the department, particularly through the Development Effectiveness Steering Committee, to ensure a whole-of-government focus is maintained.
Careful management of the budget will be a priority, consistent with the Government’s foreign and trade policy agenda and savings requirements. The department’s focus on the effective operation of its overseas network will include consolidation of the expanded diplomatic presence in Afghanistan, Ethiopia, India and Peru. Management of security arrangements in Baghdad and at posts in Afghanistan will be an ongoing priority.
The department will focus on implementing the terms and conditions of the new Enterprise Agreement 2011–14. Issues highlighted by the 2010 Staff Survey will be addressed, including an increased focus on training and development.
Focus again will be on ensuring the success of efficiency initiatives including a major upgrade of the department’s financial management information system; the final phase of the rollout of the department’s Electronic Document and Records Management System (EDRMS); the Whole-of-Australian Government Travel Management Services; and ongoing implementation of the ICT Reform Program.
The department will continue to work to better integrate risk management into departmental training and development programs and performance management. Best practice business continuity management will continue to be embedded across the department through continual review of the department’s business continuity plans in Canberra, state and territory offices and overseas posts.