The AOFM CEO leads the agency in accordance with its purpose and objectives and uses an Executive Group (comprising the CEO and business unit heads) for guidance and discussion on a range of corporate related matters. The Executive Group also develops strategic plans and tracks progress against performance targets, reviews the AOFM’s risk profile and sets risk appetite, monitors financial performance and compliance, and builds organisational capability and capacity to support high levels of performance.
The Audit Committee monitors and reviews the AOFM’s governance, enterprise risk management, internal control, and financial and performance reporting arrangements. It receives periodic briefings on changes to the business and risk profiles, oversees the AOFM’s assurance program and receives reports and briefings from AOFM business units and internal auditors. This information, together with relevant observations from the external auditor, assists the Audit Committee to form a view on the appropriateness of the AOFM’s financial and performance reporting, compliance with its obligations, and the ongoing effectiveness of AOFM risk and control frameworks.
Key activities of the Committee during 2019–20 included:
- advising on the preparation and review of the AOFM’s financial statements;
- considering developments in the AOFM’s risk profile and compliance performance, as reported through quarterly risk and assurance (including audit) reports;
- reviewing the adequacy of fraud control strategies and monitoring activities;
- monitoring progress of the implementation of the ABSF and SFSF;
- monitoring implementation of audit recommendations; and
- reviewing reporting on performance obligations in line with PGPA Act requirements, including the approach to monitoring key performance indicators and their incorporation into the Annual Performance Statement.
The Audit Committee met four times during 2019–20 and also conducted in camera sessions with the internal auditors and external auditors during the year. Details regarding each Committee member are provided in Table 7.
Table 7: Audit Committee for 2019 20
Will Laurie, Independent Member, Chair
Grad.Dip. Applied Finance and Investment
30‑year career with Price Waterhouse and PricewaterhouseCoopers, including as Managing Partner, Canberra. 20 years’ experience in chairing Commonwealth and ACT Government Audit Committees, including ANAO, Defence, Treasury, Attorney‑General’s and ACT Chief Ministers. Private sector board experience in retailing, property and not‑for‑profit education.
Stephen Knight, Independent Member
35‑year executive career in finance industry across private and public sectors in a variety of senior roles including 10 years as CEO. Extensive experience across financial markets, government finance, investment banking, funds management and risk management. Non‑executive director roles covering ASX listed, non‑listed and government entities.
Jan Harris, Independent Member
An extensive career in the Australian Public Service of over 30 years, including as Deputy Secretary of the Treasury. Experienced non‑executive director. Broad experience in policy development, economics, governance and risk management.
Erin Martin, Chief Risk and Assurance Officer, AOFM
25‑year career in the Australian Public Service, including 20 years in sovereign debt management. Experience spans accounting, audit, governance and risk management.
External observers at Audit Committee meetings included the ANAO and its outsourced provider (KPMG), and the AOFM’s internal auditor (PricewaterhouseCoopers). The AOFM CEO regularly attends meetings as an observer.
The responsibilities and functions of the Audit Committee are outlined in the Audit Committee Charter
Other management committees
Cash Managment Meeting
The Cash Management Meeting is held each week to review the near‑term outlook for liquidity risk (several months ahead) and to track that against the AOFM’s broader considerations in managing the government’s cash portfolio. The main focus is on: monitoring actual versus forecast revenue collections and outlays; frequent re‑evaluations of short to medium term cash flow projections, including expected funding needs; and emerging risks to the cash portfolio profile. Prevailing financial market conditions are also discussed, particularly during periods of high funding market volatility or recent abrupt changes. In periods of high weekly issuance rates the forward projected call on financial markets through debt issuance may also be a factor of close interest. The meeting is chaired by the CEO, and attended by the Head of Funding and Liquidity and other front office staff.
The Security Committee meets periodically and oversights security management within the AOFM. Its membership comprises the CEO (as Chair), Chief Risk and Assurance Officer, Agency Security Advisor, and IT Security Advisor. The head of the Treasury Security Team is also invited to attend ex officio to assist in security harmonisation.
Portfolio Strategy Meeting
At Portfolio Strategy Meetings (PSMs), the CEO is advised on operational debt portfolio and financial risk management issues, financial market conditions, deal execution and other topical issues. The forum focuses on medium to longer‑term trends and risks. Membership during 2019–20 included the CEO, Head of Portfolio Strategy and Research, Head of Funding and Liquidity, Head of Investor Relations, and Head of Global Markets and Business Strategy, with other senior staff holding relevant functional responsibilities invited as contributors and observers. Meetings are generally convened on a quarterly basis.