Annual Report 2004-2005

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Corporate governance

The department's strong institutional governance framework ensures we fulfil corporate responsibilities that support our performance outcomes (see performance reporting under Outcomes 1–4).

Senior Executive

The Secretary and the four deputy secretaries make up the department's Senior Executive (see also Departmental Overview: Organisational structure on page 12). The Senior Executive provides leadership and strategic direction for the department and ensures we meet our corporate governance requirements.

Dr Ashton Calvert AC, who was Secretary and Chief Executive until 4 January 2005, and Mr Michael L'Estrange, from 17 January 2005, provided close direction on all major foreign and trade policy issues and on the department's corporate management. The Secretary provided direct leadership in shaping and communicating the professional values and culture of the department in Australia and abroad. He decided all Senior Executive Service (SES) staff placements.

The four deputy secretaries supported the Secretary in overseeing the department's divisions as follows:

Members of the Senior Executive frequently represented the Government at high-level meetings in Australia and overseas. The deputy secretaries also chaired key corporate governance bodies (see below).

Management mechanisms

Our management mechanisms—listed below—provide effective decision-making and communication of corporate policy and priorities.

Senior Executive meetings

The Senior Executive held regular meetings on current policy issues with Mr Downer and Mr Vaile.

Weekly meetings of the Senior Executive, chaired by the Secretary, considered a range of issues requiring liaison with portfolio ministers. The heads of the Corporate Management Division, the Diplomatic Security, Information Management and Services Division and, as appropriate, the Director General of AusAID, also attended these meetings. These meetings considered regular reports on the department's budgetary and staffing situation, IT performance, property issues, passport developments, and divisional performance on ministerial correspondence and security breaches.

Senior management committees

Audit Committee

The Audit Committee, which meets quarterly, helps the Secretary ensure that the assurance and control framework operating in the department is effective and supports departmental objectives. Chaired by a deputy secretary not directly responsible for overseeing the Corporate Management Division, the Audit Committee is charged with:

In addition to senior departmental officers, the committee includes an independent member. Our Chief Finance Officer, staff from our Evaluation and Audit Section and ANAO officers attend each meeting as observers.

Ethics Committee

The Ethics Committee oversees the development and implementation of policy on conduct and ethics issues and the work of the department's Conduct and Ethics Unit. The committee comprises ten members from various levels within the department and is chaired by a deputy secretary. It meets regularly to provide guidance on departmental practice and process in handling ethics-related issues. In doing so it draws on the expertise of its ex-officio members, including the First Assistant Secretary, Corporate Management Division; the Director, Administrative and Domestic Law Group; and the Director, Management Strategy, Conduct and Coordination Section.

Workplace Relations Committee

The Workplace Relations Committee is the primary consultative body for human resource management and conditions of service issues affecting the department's Australia-based employees. It provides a forum for discussions between management and staff representatives about the working environment, conditions of service and matters of concern to staff.

The committee is chaired by the Secretary or his nominee, normally a deputy secretary. Members include representatives from management areas and nine elected staff representatives (two from each of the four employee broadbands and one SES employee). The Association of Foreign Affairs and Trade Employees (AFTE), the Community and Public Sector Union (CPSU), the Australian Manufacturing Workers' Union (AMWU) and the Media, Entertainment and Arts Alliance (MEAA) are also represented on the committee. The committee meets at least four times a year.

Other senior management meetings and mechanisms

The Secretary's weekly meeting with division heads is the central means of communicating corporate and policy priorities throughout the department. Division heads are responsible for disseminating key messages from these meetings to their staff. In addition, on an as required basis, the Secretary holds policy planning meetings with senior executive staff to discuss priority or emerging policy issues. These meetings help develop a stronger sense of coherence and corporate unity in our policy work and in determining corporate management strategies.

The Secretary communicates with staff through his weekly meetings with division heads, weekly policy reports, administrative circulars, the department's intranet and the staff newsletter, DFATNEWS.

Posts were kept informed of and contributed to policy and corporate initiatives through:

Planning and review

The corporate plan provides guidance on the department's goals in implementing foreign and trade policy and informs activity planning. Performance expectations and planned use of resources are set out in our portfolio budget statements.

A series of departmental planning and review processes—covering all divisions, overseas posts and state and territory offices—takes place throughout the year, ensuring resources are directed effectively to support the Government's foreign and trade policy objectives.

Divisional evaluation reviews

Divisional evaluation reviews take place in August each year, with a mid-term review in February. They serve two main purposes:

At the review in August 2004 and the mid-term review in February 2005, the department's Senior Executive evaluated the performance of all divisions and fine-tuned their work programs to take account of key government priorities. They also reviewed the resource allocations for all divisions, posts and state and territory offices, reallocating resources to meet new requirements and to facilitate higher priority projects.

Post evaluation reports

The department undertakes an annual evaluation of the performance of our overseas posts over the previous 12 months. The process is a central mechanism for ensuring posts' work is focused on the Government's priorities. We assess posts' contributions to policy outcomes, examine the quality of post management and set priorities for the forthcoming year. Post evaluation helps inform the Senior Executive's appraisal of the performance of individual heads of mission and post.

Incorporating the views of other departments and agencies is a key element of our post evaluation. For 2004–05, we invited comment from 79 departments and agencies, compared to 33 in the previous year. The increase followed a suggestion from the ANAO in its 2004–05 audit on the Management of Bilateral Relations with Selected Countries. We seek strategic-level assessments of posts' performance in meeting the Government's policy objectives, although feedback on operational issues is also welcome. Agency comments were very positive overall, demonstrating that posts were meeting whole of government objectives.

Evaluation of performance of state offices

As with posts, state and territory offices are subject to a performance review at the end of each financial year. Office evaluation reporting focuses on key areas including support to ministers, liaison with the local consular corps, business liaison programs and trade advocacy and outreach activities, as well as areas such as assistance with major meetings, notarial services and office administration. The 2004–05 evaluation found that state and territory offices were meeting their expectations in these areas.

Post liaison visits

In 2004–05, deputy secretaries, the head of Corporate Management Division or the head of Diplomatic Security, Information Management and Services Division led small teams that conducted post liaison visits to 10 posts. The annual program of post liaison visits allows us to assess first-hand post performance against agreed objectives and provides an opportunity for post staff and their families to raise any concerns direct with senior staff from Canberra. As a result of the visits, the department assessed whether posts were appropriately staffed and resourced and, as appropriate, considered adjustments. Each PLV produces a list of recommendations on post operations that are subsequently considered for implementation.

Internal audit

The Audit Committee has governance responsibility in the department for internal and external audit. It guides and reviews our audit program to ensure the department maintains an effective internal control framework and complies with legislative and other obligations.

We completed and presented to the Audit Committee general assurance and compliance audits covering:

The Audit Committee noted that all recommendations arising from these audits were satisfactorily addressed during the year.

The Audit Committee approved the department's move to full risk-based audit selection, the trialling of a self-assessment tool that will complete our control self-assessment framework for posts, and the move to internal control targeted audits that will better assess the extent to which our internal controls mitigate risks. The Audit Committee also approved the start of scoping for the first fully independent performance audit—parts of which will be conducted in 2005–06. These modifications will align the audit program with contemporary best practice in auditing.

Risk management and business continuity planning

The Audit Committee has governance responsibility for risk management and business continuity planning. In 2004–05 the department: updated our risk register; developed and began implementing a risk management communications plan to promote the application of effective risk mitigation procedures; ran quarterly risk management and business continuity training sessions for departmental staff; and incorporated the identification of risks into the department's business planning through the divisional and post evaluation report processes. We updated our business continuity plan based on a test conducted in April 2005 and monitored posts' and divisions' individual plans.

Conduct and ethics

The department has instituted a workplace culture that promotes high ethical standards. We continued to develop the existing strong staff awareness of the APS Values and Code of Conduct. In October 2004 we revised and re-issued our Code of Conduct for Overseas Service for Australia-based staff. The code takes account of the significance of the department's representational role outside Australia.

We conducted investigations into both Australian-based and locally engaged staff on an as required basis, again recording low levels of reported fraud and misconduct. We continued extensive outreach activities, including mandatory conduct and ethics training for all staff on pre-posting training and for new staff and graduate and other trainees. Conduct and ethics awareness was an important component of a range of other staff development and management courses, such as management workshops, the locally engaged staff Leadership and Development Program, and Regional Management Conferences. We provided briefings on post-specific conduct and ethics issues to heads of mission and post, deputy heads of mission and senior administrative officers before their departure on posting.

The department's human resources manual includes a chapter with departmental-specific guidance on: procedures for dealing with gifts, benefits and hospitality; SES returns of private interests; offers of sponsored travel; and diplomatic and consular privileges.

Fraud measures

In accordance with the requirements of the Commonwealth Fraud Control Guidelines, the department has in place fraud risk assessments and a fraud control plan. The department has in place appropriate fraud prevention, detection, investigation, reporting and data collection procedures and processes that meet the specific needs of the department and comply with the Commonwealth guidelines.

Management of corporate records

Following the report of a departmental Risk Management Taskforce, issued in 2003, we developed a Strategic Plan for Records Management 2004–07. The plan, available to all staff on the department's intranet, is designed to improve our record keeping capacity and performance for paper and electronic records. Phase 1 of the plan—setting the foundation for better records management—has been implemented. Phase 2—conducting a scoping study to evaluate options for resolving management software issues—is under way. Phases 3 and 4 are scheduled for completion during the life of the plan.

Whole of government issues

The department worked with other agencies on issues requiring a whole of government response. In particular, our consular emergency and crisis management systems, including the prompt establishment of Inter-Departmental Emergency Taskforces (chaired by the department), provided coordination points for implementing whole of government policy and operational approaches (see sub-output 2.1.1—with reference to our responses to the Indian Ocean tsunami and Douglas Wood's kidnapping—for more information). To further cement the department's whole of government culture—in keeping with the Department of the Prime Minister and Cabinet's guidelines on Working Together: Principles and Practices to guide the Australian Public Service—we are integrating whole of government issues into departmental training programs and performance management templates for managers. The Secretary issued an Administrative Circular outlining the expectation that staff implement whole of government approaches to issues that cross traditional agency boundaries.

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Department of Foreign Affairs and Trade Annual Report 2004–2005
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