CASA’s governance framework provides the context within which the organisation operates to achieve its objectives, ensuring transparent, ethical and accountable evidence-based decision-making, and effectively managing risk and key stakeholder relationships.

CASA’s governance system is firmly aligned with the Civil Aviation Act 1988 and fully reflects all Commonwealth legislation and policies directly affecting CASA. The system incorporates governance and management arrangements; policy settings; internal and external communication; risk management and auditing arrangements; quality assurance; and the appointment and management of delegates and authorised persons.

Enabling legislation

CASA was established on 6 July 1995 as an independent statutory authority by an amendment to the Civil Aviation Act.

Under section 9 of the Civil Aviation Act, CASA’s primary function is to regulate the safety of civil air operations in Australia and the operation of Australian aircraft overseas.

CASA’s other safety-related functions include encouraging a greater acceptance by the aviation industry of its obligation to maintain high standards of aviation safety by providing comprehensive safety education and training and accurate and timely advice, and by fostering awareness of the importance of aviation safety and compliance with relevant legislation.

CASA also has the functions of cooperating with the Australian Transport Safety Bureau (ATSB), implementing aspects of the Australia–New Zealand mutual recognition agreements, and administering elements of the insurance and financial arrangements required under the Civil Aviation (Carriers’ Liability) Act 1959.

CASA exercises its powers under the Civil Aviation Act and through the Civil Aviation Regulations 1988, Civil Aviation Safety Regulations 1998, Civil Aviation Orders, Manuals of Standards and other legislative instruments. CASA also publishes advisory and guidance materials related to air safety.

CASA has specified obligations under the Airspace Act 2007, the Transport Safety Investigation Act 2003 and the Aviation Transport Security Act 2004.

CASA is accountable as a corporate Commonwealth entity under the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

CASA has annual reporting responsibilities under section 46 of the PGPA Act and sections 44 and 49 of the Civil Aviation Act. CASA also has a range of reporting and other responsibilities under legislation generally applicable to Commonwealth authorities.

Portfolio structure and responsible minister

CASA is a statutory authority within the Infrastructure, Transport, Cities and Regional Development portfolio.

During the reporting period, the Hon Michael McCormack MP was the minister responsible for CASA, in his capacities as Minister for Infrastructure and Transport (from 1 July 2018 to 28 August 2018) and Minister for Infrastructure, Transport and Regional Development (from 28 August 2018 to 30 June 2019).

Ministerial directions

On 21 March 2017, the Minister for Infrastructure and Transport issued a notice of strategic direction under section 12A of the Civil Aviation Act, in the form of a Statement of Expectations for the Board of CASA. The Statement of Expectations is the formal and public written expression of the Minister’s expectations concerning the operations and performance of CASA for the period from 27 March 2017 to 30 June 2019.

The Minister’s expectations are reflected in the corporate plan for 2018–19, which was endorsed by the Board in line with its functions under section 53 of the Civil Aviation Act.

Under section 19 of the PGPA Act, CASA is required to give reports, documents and information on its activities to the minister responsible for CASA or the Finance Minister. In 2018–19, this included a report on CASA’s compliance with the requirements of the public governance, performance and accountability framework and regular reports on CASA’s performance.

CASA Board

The CASA Board was established under Part VII of the Civil Aviation Act. The functions of the Board are to:

• decide CASA’s objectives, strategies and policies
• ensure that CASA performs its functions in a proper, efficient and effective manner
• ensure that CASA complies with specified ministerial directions.

The Board puts in place strategies, policies and directions to guide the Chief Executive Officer/Director of Aviation Safety (CEO/DAS) and staff in their conduct of CASA’s day-to-day business.

The Board is the accountable authority of CASA under section 12 of the PGPA Act, with duties as described in Part 2-2 of that Act.

Board members

The Board comprises a Chair; a Deputy Chair; the Director of Aviation Safety, as an executive member; and up to four other members.

The Director of Aviation Safety is appointed under Part VIIA of the Civil Aviation Act, to manage CASA subject to the directions of, and in accordance with policies determined by, the Board. After consulting the Minister, the Board appoints the Director on a full-time basis for a term of up to five years, subject to possible reappointment. Mr Shane Carmody occupied the role of Director of Aviation Safety throughout 2018–19.

All other Board members are appointed on a part-time basis by the Minister for terms of up to three years, subject to possible reappointment. In appointing Board members, the Minister must ensure that there is an appropriate balance of professional expertise and experience but need not ensure that particular sectors of the aviation industry are represented.

At 30 June 2019, the Board comprised the maximum seven members, although no Deputy Chair was appointed during the reporting period.

Following the departure of Mr Jeff Boyd on 30 June 2018, on the expiry of his term as Chair of the Board, CASA welcomed Mr Anthony Mathews to the role of Chair from 20 August 2018. On 30 September 2018, Ms Philippa Stone departed on the expiry of her three-year term as a Board member. Mr Michael Bridge joined the Board on 1 October 2018.

Table 2 CASA Board members in 2018-19

_{Table 2 summarises the qualifications and experience of the members of the Board.}

CASA Board

CASA Board Back row L to R: Michael Bridge, Mark Rindfleish, Shane Carmody, Cheryl Cartwright

Front Row L to R: Anita Taylor, Anthony Mathews, Jane McAloon

Board meetings

Six scheduled Board meetings were held during 2018–19, on 24 August, 19 October,
14 December, 27 February, 30 April and 19 June. A special meeting was held with the Civil Aviation Authority of New Zealand on 26 March 2019. All Board members attended the meetings that they were eligible to attend.

In December 2018, the CASA Board undertook a joint strategic planning day with the CASA executive management team.

Board Audit and Risk Committee

The Board appoints an audit committee in accordance with section 45 of the PGPA Act. The committee’s role is to provide independent assurance and assist the Board to discharge its responsibilities under the Civil Aviation Act and the PGPA Act in respect of financial reporting, performance reporting, the system of risk oversight and management, the system of internal controls, and compliance with relevant laws and policies.

In August 2018, the Board agreed to change the name of the committee to Board Audit and Risk Committee to reflect the committee’s oversight responsibility toward CASA’s risk management framework. The responsibilities of the committee are detailed in the Board Audit and Risk Committee Charter and Governance Arrangements.

The Board Audit and Risk Committee normally consists of four members appointed by the Board, including a Board member as Chair. The Board appointed Ms Jane McAloon as Chair of the committee from 18 March 2019, replacing Ms Anita Taylor, who remained as Deputy Chair. Ms Taylor had served as Chair since December 2014.

Mr Michael Roche was reappointed in December 2018 for an additional term of one year, and Ms Donna Hardman joined the committee on 1 April 2019 for a two-year term.

The Board Audit and Risk Committee held six meetings during 2018–19, on 22 August,
14 September, 9 November, 7 February, 20 May and 17 June.

Table 3 summarises the relevant experience of the Board Audit and Risk Committee members at 30 June 2019.

Table 3 Board Audit and Risk Committee members at 30 June 2019

Organisational structure

CASA’s structure is designed to ensure that resources are aligned to core functions, providing for clear lines of reporting.

Figure 10 shows the elements and relationships of CASA’s organisational structure at 30 June 2019. CASA has no subsidiaries

Figure 10 Organisational structure at 30 June 2019

FIgure 10 Organisational structure as at 30 June 2019

Organisational changes

CASA’s structure remained largely unchanged in 2018–19.

To support its national focus on effectiveness, efficiency, standardisation and consistency, the Aviation Group implemented shared services and established the Regulatory Services and Surveillance Transformation team.

Shared services provide the Aviation Group with the flexibility to share and redistribute tasks during times when demand is high, staff availability is low, or priorities change significantly. The Aviation Group consolidated its business administration and technical administration staff into a national team and provided extensive training to facilitate increased flexibility, capacity and job enrichment. The shared services function resides in the Coordination and Safety Systems Branch.

The Regulatory Services and Surveillance Transformation team was established to lead and coordinate the transformation to a new operating model for the regulatory services and surveillance activities currently conducted by the regional offices and sector branches within the Aviation Group. This initiative will allow CASA to leverage its national resources in a more effective and efficient way while utilising standardised processes to deliver consistent outcomes.

Senior management

Six changes in senior management occurred during the year:

• Ms Philippa Crome was appointed as Executive Manager, Corporate Services Division, following the departure of Ms Tracey Frey
• Mr Roger Crosthwaite was promoted to Branch Manager, Flight Standards
• Ms Michelle Massey was transferred from Regional Manager, Southern, to Senior Manager, Regulatory Services and Surveillance Transformation
• Mr Jason McHeyzer was transferred from Branch Manager, Regulation Implementation, to Senior Manager, Southern
• Mr Chris Monahan was promoted to Executive Manager, National Operations and Standards.

The following sections summarise the qualifications, experience and responsibilities of CASA’s senior executives.

Aviation Group

Stakeholder Engagement Division

Legal and Regulatory Affairs Division

Corporate Services Division

Finance Branch

Risk management

CASA applies an enterprise-wide approach to risk management that provides the framework to enable CASA to achieve its vision of Safe skies for all and is consistent with the Commonwealth Risk Management Policy 2014 and the requirements outlined in the PGPA Act.

CASA undertook a full review of its risk management framework and policy in 2018–19 to ensure strong alignment with the Commonwealth legislative framework and international standards.

In fulfilling its regulatory obligations, CASA faces a variety of potential risks, such as failure to detect breaches of safety and maintenance standards; incorrect or inconsistent application of regulatory standards; ineffective stakeholder engagement; and failure to properly carry out statutory responsibilities. The identification, analysis, treatment, monitoring and review of risk are embedded into all CASA functions and contribute directly to the achievement of CASA’s corporate goals.

The CASA Board participates in an annual risk workshop to determine CASA’s strategic risk profile and risk appetite. In late 2018, the CASA Board determined six key risks for 2019–20, replacing the 10 strategic risks identified for 2018–19.

The six key risks are regulatory failure, inadequate capability, cyber security, funding shortfalls, technological change and industry capture.

The Board reaffirmed its acceptable tolerance of key organisational risk areas as a guide for all CASA staff.

Key achievements

In 2018–19, CASA continued to shape the risk narrative across the leadership cohort by including a module on risk and governance in the Manager Orientation Program. This is a principles-based module that discusses the need for positive risk engagement and good governance while reinforcing the behaviours expected of CASA’s management group. The module has been well received, and forms part of the broader strategy for raising the profile of risk and governance across CASA.

The CASA Board participated in a strategic planning and risk workshop in December 2018.

CASA has continued to incrementally improve its risk reporting. The governance committee structure has been used more effectively to bring to light the risk profile of CASA’s operational-level risks. Utilising risk intelligence from operational plans has led to an increased risk dialogue at all levels across CASA.

CASA participated in the annual Comcover Risk Management Benchmarking survey, achieving a maturity assessment rating of ‘Advanced’.

Looking ahead

In 2019–20, CASA will:

• continue to improve its enterprise-wide approach to risk management and reporting
• facilitate a business continuity plan scenario test
• improve the quality of its enterprise risk intelligence
• conduct periodic reviews in relation to emergent and future risks.

Internal audit arrangements

• CASA uses the services of external audit providers to complement CASA’s internal audit section.
  CASA’s risk-based strategic audit plan and rolling three-year internal audit program provide a mix of performance, financial, IT and compliance audits across the organisation. The program is designed to align with CASA’s corporate plan, operating model, strategic goals and risks.
  Audit activities are conducted in accordance with relevant professional standards including but not limited to:
• the International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors
• the Information Systems Audit and Assurance Standards issued by ISACA
• standards issued by Standards Australia and the International Organization for Standardization.

Key achievements

As part of the 2018–19 internal audit program, 11 audits were completed and a three-year audit program was approved.

Looking ahead
Internal audit will continue to focus on improving and streamlining audit processes, driving quality improvements in audit reports and facilitating stronger engagement with managers to improve the timing and scoping of audits and thus the usefulness of audit findings.

Governance committees

CASA’s governance committee structure comprises the Executive Committee and four supporting committees: Aviation Safety Committee, Risk and Investment Committee, People Committee and Business Improvement Oversight Program Board.

The committee structure provides assurance and transparency for critical decision-making. A number of sub-committees and working groups have been established to oversee critical decision-making, project management and the management of key strategic risks. During 2018–19, CASA assessed the effectiveness of the committee structure to identify aspects with potential for improvement.

Executive Committee

The Executive Committee assists the CEO/DAS and the executive leadership team to drive the implementation of strategies as decided by the Board and the CEO/DAS, and to manage the operations of CASA.

The Executive Committee meets every eight weeks to discuss strategic issues and weekly to discuss operational matters.

Aviation Safety Committee

The Aviation Safety Committee is an advisory and monitoring committee which supports the CEO/DAS and the Executive Committee on matters related to regulatory and safety compliance, safety strategies, safety performance, international safety developments and emerging aviation safety risks.

The Aviation Safety Committee meets monthly.

Risk and Investment Committee

The Risk and Investment Committee provides impartial advice and makes recommendations to the Executive Committee and the CEO/DAS on risk, finance (including budget), investment management, implementation of investments, and project and program performance issues.

The committee also provides assurance on the implementation of risk management in accordance with direction and guidance from the Board and the Board Audit and Risk Committee, and complements the role of the Board and the Board Audit and Risk Committee by considering risk at the operational and tactical levels.

The Risk and Investment Committee meets monthly.

People Committee

The People Committee oversees all strategic workforce-related matters that require collaboration across CASA functions. Key responsibilities include providing oversight of leadership, performance, recruitment, retention and staff training; and monitoring organisational health levels through unscheduled absence and staff turnover metrics.

The People Committee meets quarterly.

Business Improvement Oversight Program Board

The Business Improvement Oversight Program Board has overall oversight of CASA programs and projects. It provides strategic advice and direction across all business improvement projects, improves the alignment between CASA objectives and priorities, and provides a forum for the escalation of project and program risks for resolution.

The Business Improvement Oversight Program Board meets every two months.

Public interest disclosure policy

CASA’s policy and procedures on public interest disclosure are consistent with the requirements of the Public Interest Disclosure Act 2013. They enable confidential disclosure of matters and protect disclosers from fear or threats of reprisal for making a disclosure. CASA provides an annual report of the number and types of disclosures to the Commonwealth Ombudsman.

Code of Conduct

As a condition of employment, all employees must comply with CASA’s Code of Conduct. The Code of Conduct is aligned with the Australian Public Service (APS) Code of Conduct and reflects the values and behaviours expected of all CASA employees in the course of conducting their duties or otherwise representing CASA.

CASA promotes the code to all new employees during their orientation. This affirms CASA’s expectations and approach regarding policy, regulatory philosophy and values. Online training for all employees covers content such as working with respect and applying equity and diversity principles.

During 2018–19, there were nine allegations of potential misconduct. Of those allegations, six were referred for further investigation and three were managed through informal mechanisms. In addition, one investigation was carried over from 2017–18.

Of the seven matters that were investigated in 2018–19, six were finalised, involving five employees. All employees involved were found to have breached the Code of Conduct. This resulted in one employee being terminated, two employees receiving
employment-related sanctions and two employees receiving formal reprimands. One investigation remains current and will be carried over into 2019–20.

The average time taken to investigate allegations of a contravention of the Code of Conduct during 2018–19 was 82 days, compared to 20 days taken in 2017–18. This is attributed to two claims processes that spanned the Christmas – New Year period and were affected by staff absences. Throughout 2018–19, CASA continued to focus on streamlining processes and making greater use of internal investigators.

Lower level workplace issues that were referred to managers are not captured in the statistics above. Managers resolved these matters at the local level through the Performance and Communication Scheme, alternative dispute resolution methods, or communication to raise staff awareness of appropriate behaviour in the workplace. Managers also used the Performance and Communication Scheme to raise staff awareness and, where required, establish performance and behaviour indicators in line with CASA’s values.

Table 4 provides details of investigations in the past five financial years.

Table 4 Code of Conduct investigations, 2014–15 to 2018–19

Conflict of interest

Board members

Section 58 of the Civil Aviation Act provides that a Board member must not engage in any paid employment that, in the opinion of the Minister, conflicts with the proper performance of their duties as a member of CASA’s Board. Similarly, section 78 provides that the Director of Aviation Safety must not engage in any paid employment outside the duties of their office except with the Board’s approval.

The PGPA Act and the Public Governance, Performance and Accountability Rule 2014 provide that a Board member who has a material personal interest in a matter that relates to the affairs of CASA must disclose details of the interest to each of the other Board members. The notice must include details of the nature and extent of the Board member’s interest and how the interest relates to CASA’s affairs.

Disclosures must be made at a Board meeting, as soon as practicable after the Board member becomes aware of the interest or, if there is a change in the nature or extent of the interest, as soon as practicable after the Board member becomes aware of that change. The details of the notice given are recorded in the minutes of the next Board meeting.

Disclosures of airline lounge memberships are included in a Board member’s Standing Notice of Material Personal Interest, and the Board Secretary maintains a register of all information (records) concerning conflict of interest, hospitality and gifts.

Employees

CASA’s conflict of interest policy and procedures ensure that the knowledge and experience of the aviation industry brought to CASA by an employee do not improperly influence the employee’s performance of their duties and responsibilities. All employees complete a brief online training package which reminds them of key elements of CASA’s conflict of interest policy.

Every employee must complete conflict of interest declaration forms at various times during the course of their employment, including on commencement, following a change of circumstance (such as change of position) and during CASA’s annual conflict of interest survey.

These declarations require disclosure of a range of matters that could potentially give rise to a conflict of interest. Disclosures are assessed in terms of actual, potential and perceived risk of conflict. A mitigation strategy is established for any conflicts identified and reviewed and endorsed by the employee’s manager.

All conflict of interest management plans and associated declarations are reviewed by the Litigation, Investigations and Enforcement Branch to ensure that the proposed strategies adequately address the risks and CASA maintains a consistent approach to the management of conflicts of interest.

Fraud control

All CASA employees have completed online training on fraud, and new employees must complete the training within three months of commencing their employment.

CASA’s Fraud Control and Integrity Plan 2018–2020 was endorsed by the Board Audit and Risk Committee, expanding the focus of the program to cover issues including corruption and industry capture. The program remains aligned with the Commonwealth Fraud Control Framework.

CASA did not investigate any matters of alleged internal fraud in 2018–19. A small number of minor irregularities, primarily involving the use of CASA corporate travel cards, were identified and reviewed, and staff members were reminded of their obligations in relation to the use of the cards they hold. No fraud-related matters were referred to the Commonwealth Director of Public Prosecutions