The department’s operations in Australia and overseas are supported by a sound financial management framework, which includes robust internal controls, financial analysis and forecasting and regular financial performance reporting.
In its report, Interim Phase of the Audit of Financial Statements of Major General Government Sector Agencies for the year ending 30 June 2016, the ANAO found that the department had effective internal controls to ensure good financial management and a sound financial reporting framework.
Continued 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 investment, development assistance and the provision of high-quality passport and consular services. This will be particularly important in a tighter fiscal environment.
The department is committed to supporting the Government’s smaller government agenda through implementation of efficiencies identified in the department’s Functional and Efficiency Review, and contributions to the Whole-of-Government – Shared and Common Services Programme.
The department has also initiated a number of internal reforms aimed at improving efficiency and finding better, smarter ways of working. This includes a continued focus on modernising and enhancing our financial systems and processes, reviewing the department’s internal red tape with a focus on streamlining administrative processes, and a review of overseas operations to deliver contemporary work practices and new models of operation in support of low administration, high impact overseas representation.
Internal capital funding is allocated based on sound business cases developed by work units which are assessed rigorously by the central finance area and approved by the executive. Ongoing review of capital investment is undertaken by the executive throughout the year, focusing on large projects such as the International Communications Network and Passport Redevelopment Program. The development of the Capital Management Plan will enhance long-term strategic planning of the department’s investment needs.
We reduced compliance tasks without compromising quality of information through changes to the asset capitalisation threshold and asset stocktake requirements and continued our three-year revaluation cycle of each asset class. The exceptions are land and buildings, which are revalued annually. We conduct informal reviews and impairment testing of asset classes annually to ensure asset values are fairly stated in the end-of-year accounts.
Financial management information system
The department is continuing to enhance its financial management information system to support innovation and the reduction of red tape as well as provide financial and payroll services to other agencies under the Whole-of-Government – Shared and Common Services Programme. Improvements, including electronic purchase-to-pay functionality for Australia and overseas, are under development and will be implemented during the next financial year.
The department’s Procurement Policy Framework is aligned with the PGPA Act, Commonwealth Procurement Rules, and broader government policy. Value for money is the core principle underpinning all procurement.
The department played an active role in the implementation of the Commonwealth’s new Indigenous Procurement Policy. A three-year $9.2 million contract for domestic security guarding was awarded to Fields Group Pty Ltd. At the time this was the largest Commonwealth contract with an Indigenous business signed under the policy. As a result of early engagement with Supply Nation and Indigenous businesses, the portfolio significantly exceeded its financial year target.
There were six contracts or standing offers in excess of $10,000 (inclusive of GST) exempted from AusTender on the basis that publication would disclose exempt matters under the FOI Act.
Australian National Audit Office access clauses
No standing offers or contracts in excess of $100,000 (inclusive of GST) failed to provide for the Auditor-General to have access to the contractor’s premises.
During 2015–16, the department entered into 42 new consultancy contracts, involving total actual payments of $4,932,008.16 (inclusive of GST). In addition, 14 ongoing consultancy contracts were active, involving total actual payments of $1,437,809.20 (inclusive of GST).
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.
The department engages consultants where it lacks specialist expertise or when independent research, review or assessment is required. Consultants are typically engaged to investigate or diagnose a defined issue or problem, carry out reviews or evaluations, or provide independent advice, information or creative solutions to assist in the department’s decision-making.
Before engaging consultants, the department takes into account the skills and resources required for the task, the skills available within the department and the cost-effectiveness of engaging external expertise. The decision to engage a consultant is made in accordance with the PGPA Act and related rules, including the Commonwealth Procurement Rules, and relevant departmental policies.
Procurement initiatives to support small business
The department supports small business participation in the Commonwealth Government procurement market. Small and medium enterprises and small enterprise participation statistics are available on the Department of Finance’s website: www.finance.gov.au/procurement/statistics-on-commonwealth-purchasing-contracts.
The department recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website: www.treasury.gov.au.
The department remained committed to ensuring that small and medium enterprises could engage in fair competition and we demonstrated this through our procurement practices. The department:
- used the Commonwealth Contracting Suite to reduce tendering costs and red tape for low-risk procurements conducted in Australia and valued under $500,000;
- provided electronic systems to facilitate on-time payment performance, including the use of credit card payments for procurements up to $10,000;
- maximised the number of Indigenous small to medium enterprise contracts through broader application of the mandatory set-aside requirements in the Indigenous Procurement Policy; and
- promoted the Small Business Engagement Principles by communicating in clear, simple language and presenting information in an accessible format.