Annual Report 2007-2008

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1. Overviews2. Performance3. Corporate4. Appendixes5. Financials6. Glossaries and Compliance Index

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Corporate governance

The department’s achievement of performance outcomes has been underpinned by a robust institutional governance framework.

Senior executive

The department’s senior executive consists of the Secretary and five deputy secretaries. In 2007–08 it provided strong leadership on our strategic direction and corporate governance framework.

The Secretary, Michael L’Estrange AO, provided close direction on all significant foreign and trade policy and corporate management issues. The Secretary decided on placements for all senior executive staff. The five deputy secretaries provided support to the Secretary through oversight of the department’s 24 work units (see Figure 2 on page 14 for a breakdown of deputy secretary responsibilities).

The deputy secretaries represented the Government at high-level meetings in Australia and overseas. They also chaired key corporate governance bodies.

Management mechanisms

Senior executive meetings

The senior executive held weekly meetings, chaired by the Secretary, to consider a range of foreign and trade policy and corporate issues. The heads of Corporate Management Division, Diplomatic Security, Information Management and Services Division, the Assistant Secretary of the Executive, Planning and Evaluation Branch, the Chief Finance Officer and, as appropriate, the Director General of AusAID and the Deputy Chief Executive Officer of Austrade also attended the meetings. These meetings also discuss the department’s staffing, budget, IT and property management performance, issues related to specific overseas posts, and divisional performance on ministerial correspondence and security.

The senior executive and individual deputy secretaries met regularly with the Foreign Minister, Trade Minister and parliamentary secretaries to discuss current policy and corporate issues.

Senior management committees

Audit and Risk Committee

The objective of the Audit and Risk Committee is to provide independent assurance and assistance to the Secretary (and the senior executive) on the department’s risk, control and compliance framework, and its external accountability responsibilities. It is chaired by a deputy secretary not directly responsible for overseeing the Corporate Management Division. The Committee is charged with:

In 2007–08, the committee met five times. A revised committee charter was issued, including an expanded work program, and a second independent member was appointed. Issues considered by the committee included the department’s risk management and business continuity planning, outcomes from the internal audit program including post audit activity, the effectiveness of control self-assessment at posts, and a plan of action arising from the external quality assurance review of internal audit. In addition, the committee provided advice to the Secretary on his sign-off of the Certificate of Compliance process.

Ethics Committee

The Ethics Committee oversees the development and implementation of the department’s conduct and ethics policy. It has an important responsibility to promote the highest standards of conduct and ethics.

In 2007–08, the committee was involved in implementing the department’s revised policy on conflicts of interest, developing our policy on staff use of internet social networking sites, and reviewing our informal complaints handling procedures.

Chaired by the deputy secretary responsible for corporate management issues, the committee comprises 12 members from various staffing levels and areas within the department. It meets up to three times a year.

Workplace Relations Committee

The Workplace Relations Committee is the primary consultative forum for management and staff representatives to discuss work-related issues.

During 2007–08, the committee’s discussions led to improvements in aspects of the performance management system and staff training and career development opportunities; streamlining departmental work systems and practices; and ensuring working smarter principles, such as work–life balance, are further integrated into the workplace.

The committee is chaired by the deputy secretary responsible for corporate management issues. Under the terms of the department’s Collective Agreement 2006–2009, membership includes representatives from management areas and nine elected staff representatives (two from each of the three employee broadbands, two EL2 staff and one SES employee). The Association of Foreign Affairs and Trade Employees, the Community and Public Sector Union, the Australian Manufacturing Workers’ Union and the Media, Entertainment and Arts Alliance are also represented on the committee. The committee meets four times a year.

Other senior management meetings and mechanisms

The Secretary met weekly with division heads to communicate the department’s foreign and trade policy and corporate priorities. In turn, division heads disseminated the key messages from these meetings to their staff. The Secretary also held policy planning meetings with senior executive staff to discuss priority or emerging issues as required.

The Secretary communicated with staff through the weekly meetings with division heads, administrative circulars, and messages posted on the department’s intranet and in the staff newsletter, DFATNEWS.

Posts remained engaged with and were kept informed of policy and corporate initiatives through:

Planning and review

The department’s performance was evaluated throughout the year to ensure resources were directed effectively to support the Government’s foreign and trade policy goals. All divisions, overseas posts and state and territory offices were involved in a series of department planning and review processes. Whole-of-department performance expectations and our planned use of resources are outlined in the department’s Portfolio Budget Statements, which are tabled in Parliament as Budget related papers.

Divisional evaluation review

The department conducts divisional evaluation reviews each year in August, with a mid-term review in February. These reviews enable the senior executive to evaluate the performance of each division and to determine or refine divisional priorities for the period ahead.

Budget allocation review

Resource decisions within the department are made primarily through the budget allocation review process. It aims to improve budget planning and expenditure forecasting, consolidate budget management on a single corporate system, and better integrate the department’s internal processes with the Government’s Budget timetable. Budget allocation review meetings took place in November 2007 and May 2008.

Post evaluation reports

Each year, the department evaluates the performance of all overseas posts over the previous 12 months. This process is the central mechanism for ensuring work at posts is focused on the Government’s priorities. Posts’ contributions to policy outcomes and the quality of post management are assessed and priorities for each post are set for the forthcoming year. Post evaluation also helps inform the senior executive’s appraisal of the performance of individual heads of mission and post.

A key part of these evaluations is incorporating the views of other departments and agencies on post performance. For 2007–08, and as suggested by the ANAO in its 2004–05 audit on the Management of Bilateral Relations with Selected Countries, we invited comment from 45 departments and agencies, and requested they consult relevant bodies within their portfolios. We sought strategic-level assessments of posts’ performance in meeting the Government’s policy objectives: however, feedback on operational issues was also useful. All agencies responded to our request and comments were very positive overall, indicating that posts had been successful in meeting whole-of-government objectives in 2007–08.

Evaluation of performance of state and territory offices

State and territory offices are similarly subject to a performance review at the end of each financial year. This evaluation 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 assistance provided for major meetings, notarial services and office administration. In 2007–08 all state and territory offices were found to be meeting the department’s expectations in these areas.

Post liaison visits

In 2007–08, deputy secretaries led small teams to five posts to conduct post liaison visits. These visits allow the teams to assess first-hand post management performance against agreed objectives. They also provide a forum for post staff and their families to raise any concerns directly with senior staff from Canberra. The teams assess whether posts are meeting the Government’s expectations and are appropriately staffed and resourced. Following the visit, the teams develop recommendations on the post operations which are considered by the department’s senior executive, and then actioned as appropriate.

Internal audit

The Audit and Risk Committee has governance responsibility in the department for internal and external audit. It guides and reviews the audit program to ensure we maintain an effective internal control framework and comply with legislative and other obligations. The primary purpose of internal audit is to undertake health checks of our operations and processes and to make recommendations to management on improvements where required.

Internal audit completed and presented to the committee a number of compliance and performance audits, including:

The committee noted that departmental management responded satisfactorily to all recommendations arising from these audits or were in the process of responding to them.

A control self-assessment audit tool undertaken by post finance managers overseas underlined the continuing effectiveness of the department’s internal control framework.

Risk management and business continuity planning

The Audit and Risk Committee has governance responsibility for risk management and business continuity planning. It considered options for better integrating risk into departmental decision-making and corporate governance processes and a review of the department’s risk management plan was commenced. We provided a submission to the annual Comcover risk management benchmarking survey.

We monitored and updated posts’ and divisions’ business continuity plans and provided guidance to posts about how to update and test their plans. We developed procedures to be followed by all posts and Canberra Divisions in the event that a post’s plan is activated. We advanced the utility of our offsite IT disaster recovery facility.

Conduct and ethics

The department values and promotes the highest standards of conduct and ethics. We have a unit dedicated to investigating allegations of fraud and misconduct, promoting Australian Public Service (APS) Values and Code of Conduct and providing conduct and ethics training. An Australian Public Service Commission employee survey conducted in 2007 found that our awareness of the APS Code of Conduct and Values and suspected breach reporting procedures was higher than the APS average. It also found that a higher percentage of departmental respondents thought the behaviour of colleagues, supervisors and senior managers was in accordance with APS Values.

In 2007–08, the department implemented its revised policy on conflicts of interest. The policy was developed in conjunction with the Australian Public Service Commission’s revised guidelines on conflicts of interest. The policy includes a number of new initiatives including the requirement for all staff to sign an annual declaration acknowledging that they have read and understood the department’s conflicts of interest policy. In addition, SES and equivalent staff and designated positions (which could include staff involved in procurement or ongoing contract management) are required to submit annual disclosure returns on private interests.

Staff are regularly reminded of their responsibilities through the department’s conduct and ethics awareness program. This includes a suite of training programs, policy circulars and briefings on overseas post-specific conduct and ethics issues for heads of mission, deputy heads of mission and senior administrative officers. In addition to the APS Values and Code of Conduct, posted employees must abide by the department’s own Code of Conduct for Overseas Service for Australia-based staff, which aims to address the department’s significant overseas representational role.

As required, we conducted investigations into both Australia-based and locally engaged staff, recording lower levels of reported fraud and misconduct than the previous year.

Fraud measures

In compliance with the Commonwealth Fraud Control Guidelines, the department has a fraud risk assessment and a fraud control plan. In accordance with the Guidelines, we undertook a significant review of our fraud control plan with a view to re-issuing an updated plan early in 2008–09. Our fraud prevention, detection, investigation, reporting and data collection procedures and processes meet the specific needs of the department and comply with Commonwealth investigation guidelines.

The department’s fraud and misconduct investigators hold Advanced Diplomas of Government (Fraud Control Management), which is the Attorney-General Department’s recommended qualification for Commonwealth employees involved in managing fraud prevention, detection and investigation activity.

In accordance with the Australian Public Service Act 1999, the department has appropriate procedures in place to ensure that Australia-based and locally engaged staff who report breaches of the APS Code of Conduct or the Code of Conduct for Overseas Service are protected from the threat of reprisal and that allegations are investigated fairly and expeditiously.


Effective whole-of-government coordination is an essential part of the department’s policy and organisational work. We worked in concert with a large number of agencies on issues requiring a whole-of-government approach, such as the hosting of major international meetings, responses to consular crises, regional counter-terrorism cooperation, and coordinating policy approaches to bilateral and multilateral trade negotiations. Whole-of-government coordination at our overseas posts is increasingly crucial to their operations, particularly with the increasing numbers of attached agency staff at some posts. The ability of staff to work and achieve outcomes in a whole-of-government manner was incorporated into performance management templates and departmental training programs throughout the year.

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