Management of financial resources
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 2017, 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 Shared and Common Services Program.
The department has progressed a number of internal reforms aimed at improving efficiency and finding better, smarter ways of working. This includes:
- 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
- redesign of overseas operations to deliver contemporary work practices and new models of operation in support of low administration, high impact overseas representation.
Financial management information system
The department delivered enhancements to its financial management information system to support innovation and the reduction of red tape in 2016–17. We will continue to work towards utilising improved finance technology to support these core objectives, including towards the delivery of shared service initiatives.
Assets management
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. The executive reviews capital investment throughout the year. The long-term strategic planning of the department’s investment needs is supported through the implementation of the Capital Management Plan. We conduct informal reviews and impairment testing of asset classes annually to ensure asset values are fairly stated in the end-of-year financial statements.
Purchasing performance
The department is one of the Government’s major purchasers of goods and services. The department’s purchasing was undertaken in accordance with the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Commonwealth Procurement Rules, which require Commonwealth officials to ensure value for money through the efficient, effective, economical and ethical use of public resources.
In 2016–17 we continued to focus on delivering procurement solutions that support the department’s foreign, trade and aid objectives, and pursuing value for money in procurement and contract management practices and processes.
The department continued to play a strong role at the whole-of-government level in supporting the Indigenous supplier diversity strategy. This is evidenced through the contracts awarded in the inaugural year of implementation and the continued effort throughout 2016–17.
Consultancy contracts
During 2016–17, 48 new consultancy contracts were entered into involving total actual expenditure of $2,055,324 (inclusive of GST). In addition, 27 ongoing consultancy contracts were active during the period, involving total actual expenditure of $2,686,728 (inclusive of GST).
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.
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: tenders.gov.au.
ANAO 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.
Exempt contracts
There were three contracts or standing offers in excess of $10,000 (inclusive of GST), with a total value of $4,225,922, exempted from being published in AusTender on the basis that publication would disclose exempt matters under the FOI Act.
Procurement initiatives to support small business
The department supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website: finance.gov.au/procurement/statistics-on-commonwealth-purchasingcontracts.
The department remained committed to ensuring that SMEs could engage in fair competition and we demonstrated this through our procurement practices.
In 2016–17 the department held its inaugural Aid Supplier Conference, an initiative to foster communication and shared understanding with over 180 businesses. It provided SMEs with the tools required for working with the department to deliver an aid program that effectively contributes to Australia’s national interest by promoting prosperity, stability and security in our region.
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:
treasury.gov.au.