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Management of financial resources
During the year the department worked to improve financial management and performance, building on the implementation during the period of the new Financial Management Information System (FMIS) (see below). This resulted in greater accuracy in financial reporting and enabled the department more correctly to record revenues, expenses and liabilities in our annual financial statements. The department recorded a small increase ($0.928 million) in our accumulated surplus after abnormal and extraordinary items as at 30 June 2000. It is expected that these improvements in financial reporting will result in improvements in the accuracy of the budgeted financial statements in subsequent years.
New Financial Management Information System
The department introduced and implemented a new FMIS during the year. The new system enabled us to meet reporting and accountability obligations arising from accrual budgeting. FMIS provided us, for the first time, with access to real-time figures for all transactions around the world. Where possible, the system was linked electronically to the numerous banks the department uses around the world, bringing considerable resource efficiencies. Other efficiencies included an improved ability to manage the cash requirements for different overseas posts and to provide central support to remote sites.
The new Financial Management Information System provides accounting services and reporting for the department in Australia and posts we manage overseas. It also accommodates our GST obligations.
Since 1 July 1999, we have created a centralised data system in Canberra, and have implemented the system in seven State and Territory offices. As at 30 June 2000, the new FMIS was fully operational at 52 overseas posts and some 26 posts were scheduled to be operational by July 2000. We are developing interfaces to numerous human resource management systems used by the department around the world. Consistent with the Governments e-commerce agenda, the system provided electronic receipt and payment facilities in Australia and many overseas locations. FMIS was able to provide accounting services for 41 attached agencies and accommodate approximately 170 bank accounts globally. It handled more than 1.8 million transactions, and we developed user-friendly technology utilising Lotus Notes for infrequent users in Australia.
The department adapted systems and processes to ensure the smooth introduction of the Governments taxation reform program, A New Tax System. In doing so, we met the deadlines for implementing the Goods and Services Tax and the Pay As You Go system. We also amended Fringe Benefits Tax procedures to take account of the new group certificate reporting requirements, and notified all employees affected by these changes in a timely manner.
DoFAs assessment of our implementation of the changes needed to accommodate the new tax system concluded that we complied with all obligations.
E-business and e-commerce
Consistent with the Government Online strategy, the department has continued to develop our online systems. We implemented electronic workflow systems for processing procurement requests and account payments. Our information technology was modified to interconnect with the departments travel services providers computer reservation system in order to facilitate, for example, the calculation and payment of travelling allowances and the issue of airline tickets. We also established an online application system for people seeking to join the department as graduate trainees. These changes have significantly reduced processing times.
We stepped up our procurement of supplies and publications over the Internet, and increased the number of strategic relationships that provide for procurement and invoicing by electronic means. This trend will continue. We expanded the part of the departmental website that sells online or otherwise makes available all departmental publications.
The departments procurement functions are centralised in the two principal areas of information technology and passports as well as other items.
All procurement undertaken complied with Commonwealth Government procurement guidelines industry development policies, including contracting through Australian and New Zealand suppliers and small and medium-size enterprises.
All staff engaged in procurement activities undertook formal procurement training that conforms with procurement competency standards. The department conducted in-house contracting and contract management training courses designed for all staff involved in these activities.
Funds for commercially leased properties are devolved to our overseas posts, along with an amount for repairs and maintenance, furniture and fittings. Funds for new embassy fit-outs and head of mission residence refurbishments are managed centrally.
The department provided budgetary and administrative support for a range of property projects. We supported new commercially leased embassy and office relocations in Abu Dhabi, Berlin, Dili, Guangzhou, Harare and Warsaw. We provided similar support for a new head of mission residence in Guangzhou, the co-location of the Australian embassy with the Canadian embassy in Caracas, and at new Commonwealth-owned property construction projects in Brasilia, Apia, Dhaka and Islamabad. Construction of a proposed staff residential complex in Honiara was suspended due to security threats arising from civil unrest. Feedback from posts indicated satisfaction with the timeliness of our advice and technical support in relation to property searches, design of office layout, furniture schemes and fit-out implementation.
To assist the smooth implementation of the Governments policies on outsourcing, the department liaised closely with DoFA and posts on broader strategic issues, such as DoFAs divestment program for owned overseas properties and proposed outsourcing of property management services for the owned estate. As part of the outsourcing process, we provided detailed information to DoFA about the departments unique security, representational and operational interests in the overseas owned estate. We also assisted in DoFAs visits to posts aimed at assessing the capacity of tenderers to deliver property services on the ground in remote and sometimes difficult locations.
The department implemented administrative arrangements to absorb new property functions transferred from DoFA. These were the head lease function for multi-tenanted, commercially leased embassies overseas (which took effect on 1 July 2000) and the management of furniture and whitegoods in owned residential complexes for all overseas operating agencies. We consulted attached agencies closely on the administration of the head lease function, which will give the department direct responsibility in future for lease negotiations and office fit-outs in new leased premises.
Domestically, the department provides office accommodation for staff in Canberra, State and Territory capital cities and Newcastle.
Three leases were subject to rent reviews in 19992000, and two require arbitration to ensure the Commonwealths interests are protected. Several minor leasehold improvements and office fit-outs were undertaken in the R G Casey building, which houses the departments Canberra headquarters.
We commissioned a limited energy audit for the R G Casey building by the building owners maintenance provider. Implementation of its recommendations should yield annual savings of approximately $18 000. Our energy usage is higher than for most other agencies due to the operation of the 24-hour secure communications network. We are also working with the Australian Greenhouse Office to develop a comprehensive environmental management system for the R G Casey Building.
The department continued our commitment to benchmarking the delivery of our services and approached the market for the provision of a number of services during 19992000.
One contract exceeded the $100 000 threshold. A three year contract with CV Services International Pty Ltd. (Solution 6) for the provision of hardware and software support and development services for the Passport Delta System was signed on 24 May 2000. Cost of the contract is $570 000 per annum over three years. Delta is leading edge technology. It is a client server imaging and workflow application used to scan text and images from passport applications, perform eligibility assessments and produce passport documents. Delta represents a shift from previous manual processing of passports to a largely automated system.
The department also negotiated new contracts for the provision of a number of significant services and functions outsourced in previous financial years: these include the Australian Passport Information Service ($5.1 million over three years), passport application and interview service ($35 million over five years), telephone facilities management, and the overseas and domestic removals function.
We issued new policy guidance to ensure that contractors observed appropriate ethical standards when working on our behalf. Contract managers were required to make sure that contracts contained an enforceable provision that contractors conduct themselves as if they were APS employees and observe the APS and departmental codes of conduct.
As part of its outsourcing activities, the department engaged specialists and recognised experts on an ad hoc basis for the provision of policy and strategic management advice.
Areas in which such advice were sought included academic and market-related research, change management and benchmarking.
Details of consultancy services engaged by the department during the year are at Appendix 11.
A major exercise for the department during the year was the Output Pricing Review, which stemmed from a decision of Cabinets Expenditure Review Committee that the Minister for Foreign Affairs and the Minister for Finance and Administration should jointly review the price of the departments outputs. The review is designed to establish the costs to the Government of our outputsthe goods and services we provide on behalf of the Government to other organisations and to individualsand whether these represent value for money.
Reviews of both the consular and passports outputs were concluded during the year, completing the review of outcome 2 (services to Australian travellers). A departmental task force was established to review the price of the remaining outputs contributing to outcome 1 (protection and advancement of the national interest) and outcome 3 (public diplomacy). This broader review will be completed in the 200001 financial year.
The Government concluded, following the review of outcome 2, that it would provide ongoing funding to supplement existing consular and passport work, enabling the department to meet a significant expected increase in the demand for services as more Australians travel and live overseas. The review confirmed that we provide one of the most comprehensive and high quality consular services in the world at reasonable cost (see also outcome 2, page 139).
Additional funding of $1.1 million a year was secured to maintain the current high level of consular service in the face of increasing demand. Fees for consular notarial services (which include the authentication of private or commercial documents covering transactions between parties in two or more countries) will be increased to fund this decision. The review of passport services resulted in increased funding of $26 million over a three-year period to the end of the 200102 financial year.
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