Management of financial resources

The department's operations in Australia and overseas are supported by a sound financial resource management framework, which includes robust internal controls and regular budgeting performance reporting. (See also Report on financial performance.)

The 2013–14 Budget included additional funding for the department to implement a new International Communications Network; construct two new properties in Nairobi and Kabul; continue support for the Regional Assistance Mission to Solomon Islands; and support the prevention and disruption of maritime people smuggling.

At the 2013–14 Additional Estimates, the department received additional funding for the Government's New Colombo Plan and for a Debt-to-Health swap with the Government of Indonesia, as well as administered funding to cover payments to multilateral organisations. The Government discontinued the establishment of a new post in Senegal (Dakar) and withdrew associated funding.

In its report, Interim Phase of the Audit of Financial Statements of Major General Government Sector Agencies for the year ending 30 June 2014, the ANAO acknowledged that the department (including the former AusAID) had effective internal controls to ensure good financial management and a sound financial reporting framework.

Financial management information system

The department completed the first year of a two-year program of work to improve its financial management information system and business processes. Early results included enhanced internal audit controls and more efficient user access management. Further improvements in relation to procurement processes, travel management, cash management, financial reporting and budget planning will be developed throughout the next financial year.

Assets management

A rigorous capital funding process ensured work units provided well-argued business cases to seek capital funds. The executive, in addition to receiving monthly budget reports, reviewed the progress of previously approved projects. Work areas reviewed and updated their asset purchasing and disposal needs as part of a five-year asset plan.

The department operates a rolling cycle for asset revaluations whereby each asset class is revalued 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.

Purchasing performance

The department ensured compliance with all relevant Commonwealth procurement policies and legislation, particularly the Commonwealth Procurement Rules.

Competitive tendering and contracts of $100 000 or more (inclusive of GST) let during 2013–14 incorporated provisions to allow access to relevant contractors' premises by the Auditor-General.

Competitive tendering and contracting

The department updated its procurement policy framework and other policies, guidance and tools to reflect the requirements of the Public Governance, Performance and Accountability Act 2013 and the needs of the integrated department.

Exempt contracts

There were no contracts or standing offers in excess of $10 000 (including GST) 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.

Consultancy services

The department engages consultants where it requires specialist expertise or when independent research, review or assessment is required.

Prior to engaging consultants, the department takes into account the skills and resources required for the task, the skills available internally, and the cost-effectiveness of engaging external expertise. The engagement of consultants during 2013–14 was in accordance with the Financial Management and Accountability Act 1997, related regulations including the Commonwealth Procurement Rules and relevant internal policies.

During 2013–14, the department entered into eight new consultancy contracts involving total actual expenditure of $875 214. In addition, 18 ongoing consultancy contracts were active, involving total actual expenditure of $1 213 681.

In accordance with Commonwealth requirements, annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website www.tenders.gov.au.

Whole-of-Australian-Government stationery and office supplies

Officemax became the department's stationery provider on 1 February 2013 on transitioning to the Whole-of-Australian-Government Arrangements for Stationery and Office Supplies. A Change Order to the Agency Deed between the department and Officemax has been made to reflect the integration of AusAID. Officemax will continue to be the department's stationery provider until 30 June 2015.

Whole-of-Australian-Government travel management services

The Department of Finance exercised the second and last option to extend their Whole-of-Australian-Government head agreement with Agency Travel Management Companies for 12 months to April 2015. Consequently Carlson Wagonlit Travel will continue to be the department's travel provider until 30 April 2015.

The department transitioned to phase two of the Whole-of-Australian-Government Arrangements (for Travel and Related Card Services) on 1 July 2013. Under phase two, the AOT Group will provide accommodation services to the department and Thrifty and Europcar will provide the department's car rental suppliers for travellers within Australia.

Overseas property-leased estate

See Program 3.2, Overseas property.

Domestic property

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. (See also Appendix 9.)

Outlook

Strong management of financial resources will be required for the effective implementation and alignment of government priorities in the areas of foreign affairs, trade and development assistance, while achieving efficiency savings in departmental operating costs. The department will continue to rollout measures to cement machinery of government changes and this process is expected to deliver significant savings from the departmental budget.

In 2014–15, the department will directly administer approximately 92 per cent ($4.640 billion) of the estimated $5.032 billion total ODA budget. We will effectively manage ODA resources in line with ten specific performance targets. Ensuring at least 90 per cent of country program aid is spent in the Indo–Pacific region and that 20 per cent of total ODA supports aid for trade by 2020 are two particular priority targets.