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Corporate governance

Machinery-of-government changes

As a result of the Administrative Arrangements Order issued on 29 May 2019, skills, vocational education and training, and adult migrant education functions were transferred to the Department of Employment, Skills, Small and Family Business and the Department of Home Affairs.

Work towards implementing machinery-of-government changes commenced on 29 May 2019 and the changes were effective from 1 July 2019 respectively.

Governance framework

Our governance structure helps us to successfully deliver outcomes consistent with our legal, accountability and policy obligations.

The Executive Board, chaired by the Secretary, is responsible for setting longer-term strategy for the department, meeting the Government’s objectives and ensuring compliance with the department’s obligations under the Public Governance, Performance and Accountability Act 2013 (PGPA Act). Membership consists of the Secretary and deputy secretaries.

The department’s senior governance committees (Figure 3.1) provide direction and organisational stewardship, and support the department in meeting its priorities and objectives. All committees, except the Implementation Committee which makes decisions in relation to capital budgets, are advisory bodies and report to the Executive Board or the Secretary.

Figure 3.1: The department’s senior governance structure, at 30 June 2019Figure 3.1 shows the relationships between the secretary, the executive board and each of the senior governance committees. The Audit and Assurance committee and the Executive board report directly to the Secretary. The Policy and Strategy Committee, Implementation Committee (chaired by an external representative), Culture and Engagement Committee, Indigenous Business Is Everyone’s Business Committee and the Risk, Business Continuity and Security Committee (chaired by an external representative) all report to the executive board.

Audit and Assurance Committee

The department’s Audit and Assurance Committee provides independent advice and assurance to the Secretary on the appropriateness of the department’s financial reporting, performance reporting, systems of risk oversight and management, and systems of internal control. The committee has been established in accordance with section 45 of the PGPA Act and section 17 of the Public Governance, Performance and Accountability Rule 2014.

As at 30 June 2019, the Audit and Assurance Committee consisted of four external members (including the chair) and three departmental members. The members were:

  • Ms Jenny Morison—Chair (external member)
  • Ms Jackie Wilson, Deputy Secretary, Early Childhood and Child Care, and Deputy Chair
  • Ms Donna Moody (external member and observer on the Risk, Business Continuity and Security Committee)
  • Dr David Bryant (external member and observer on the Implementation Committee)
  • Mr Tim Youngberry (external member and Financial Statements Subcommittee Chair)
  • Mr Joey Baker, Branch Manager, Schools Funding
  • Mr Damian Coburn, Branch Manager, HELP and Provider Integrity.

The committee met five times during the year, with the Deputy Secretary Corporate Strategy, Chief Financial Officer, Chief Information Officer, Chief Risk Officer, Chief Internal Auditor and representatives from the Australian National Audit Office attending as observers. The Audit and Assurance Committee works closely with the Risk, Business Continuity and Security Committee in relation to systems of risk oversight and management. An external member of the Audit and Assurance Committee attends meetings of the Risk, Business Continuity and Security Committee as an observer. The Financial Statements Subcommittee, chaired by an external member of the Audit and Assurance Committee, supports the committee in performing its financial reporting function.

Corporate and business planning

The Department of Education and Training Corporate Plan 2018–19 was published on the department’s website on 24 August 2018. The plan sets out our purpose statement—maximising opportunity and prosperity through national leadership on education and training—and also outlines our activities and performance criteria for the next four years.

These criteria form the basis of the annual performance statements in Part 2 of this report. Business plans are developed annually for business areas and outline a formal statement of priorities and how they will be achieved. Business plans play an important role in ensuring alignment of work priorities and work deliverables.

The 2018–19 business plans provide a clear line of sight between our purpose and the work we do to achieve our outcomes.

Risk management

Risk management is integral to the department’s strategic and operational environment. It is recognised by our executive as essential for ensuring the effective delivery of our activities and the achievement of our purpose.

The department’s risk management framework aligns with broader requirements, including the Commonwealth Risk Management Policy and the Australian standard on risk management (AS ISO 31000:2018), and meets the requirements of section 16 of the PGPA Act.

We actively manage risks through systems, processes and strategies that are designed to respond to changes in our environment, strengthen our business processes and improve our culture and capability. The Risk, Business Continuity and Security Committee monitors our enterprise risks and reports to the Executive Board to inform decision-making and support our purpose.

Our people are encouraged to identify and mitigate risk, and to use risk management as a tool to make sound business decisions that support achievement of our purpose.

Fraud Control

As a Commonwealth entity, the department has a responsibility to ensure public resources are used appropriately to achieve its purpose and promote financial sustainability.

In 2018–19, the department introduced a new fraud control framework to better support the management of fraud risk. A key component of this framework is the Fraud Control Plan, which aims to increase the department’s fraud control maturity.

The department continued to explore solutions to managing fraud risk and incidents of fraud. These included improving legislative frameworks, refining analytical capability, strengthening existing controls, improving data analytics capability and implementing new approaches to reducing the opportunity for fraud such as localised disruption strategies.

To support financial integrity of the child care system, the department developed the Child Care Financial Integrity Framework to support and guide the department’s child care financial integrity program, including fraud detection, monitoring and response activities. The Family Day Care Payment Integrity measures respond to sophisticated and systemic fraud and serious noncompliance in the family day care sector. Further information on these integrity measures is available in Part 2 of this report.

The department had three investigation teams responsible for investigating incidents of fraud:

  • Fraud Team in the People, Parliamentary and Communication Group, authorised to conduct fraud investigations into any of the department’s activities.
  • Child Care Fraud Investigations Team in the Payment Integrity Group, which undertook investigations related to family assistance law, primarily fraud in child care.
  • Investigations Team in the VST, VET Compliance and TRA Group, which undertook investigations into vocational education and training programs, including VET FEE-HELP investigations.

In addition to undertaking fraud investigations, the Fraud Team performed a broader fraud control function, including:

  • implementation and maintenance of the fraud control framework
  • raising awareness of fraud through targeted communications and delivering regular fraud awareness training to staff
  • providing advice on reporting suspected fraud, the investigations process, and general fraud-related matters
  • providing advice to business areas about considering fraud risks in new policies and programs
  • annual reporting against the Commonwealth Fraud Control Framework 2017.

The Child Care Fraud Investigations Team also contributes to the prevention of fraud across all Commonwealth programs by working with other Australian Government agencies on detection and prevention strategies.

Shared services arrangements

The department has memorandums of understanding in place for the provision of relevant services from the Department of Employment, Skills, Small and Family Business, the Department of Finance and the Department of Social Services.

The Department of Employment, Skills, Small and Family Business provides technology and some corporate services, including network access, client computing, service desk support, records management and financial viability assessments.

The Department of Finance’s Service Delivery Office provides transactional services such as payroll and payroll system administration, accounts payable and receivable, credit card management, and travel management.

The Department of Social Services provides grants administration services through the Community Grants Hub.

The department provides library and theatre (including audio-visual) services to the Department of Employment, Skills, Small and Family Business and other entities.