Annual performance statement
Introductory statement
I, as the accountable authority of the Department of Finance, present the 2017-18 annual performance statements of the Department of Finance, as required under paragraph 39(1)(a) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). In my opinion, these annual performance statements are based on properly maintained records, accurately reflect the performance of the department, and comply with subsection 39(2) of the PGPA Act.
(Signed) Rosemary Huxtable
Secretary
5 October 2018
Purpose
Finance assists the Australian Government to achieve its fiscal and policy objectives by advising on expenditure, managing sustainable public sector resourcing, driving public sector transformation and delivering efficient, cost-effective services to, and for, government.
Advising on expenditure
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Performance criterion Budget papers, related updates (e.g. the Mid-Year Economic and Fiscal Outlook) and appropriation bills are accurate, delivered within required timeframes and meet the government’s fiscal and policy objectives and legislative obligations. Criterion source Corporate Plan 2017–18, page 16 |
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Result against performance criterion Substantially Achieved All of the Budget papers and related updates have been produced in accordance with the timeframes and other requirements of the Charter of Budget Honesty Act 1998 including:
Appropriation Bills were introduced within the required timeframes and in accordance with legislative requirements:
In relation to the accuracy of budget estimates, Finance reports the following results:
Variations between the estimates and final outcome reflect program-specific parameters. Program estimates are regularly reviewed and updated to take account of the best available information to maximise their reliability and accuracy. |
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Analysis A core activity undertaken by Finance to achieve the 'advising on expenditure' element of its purpose is to support the Minister for Finance and the Expenditure Review Committee of Cabinet in the preparation of the Budget and related fiscal updates. This activity includes:
In undertaking this activity, Finance contributes to the government’s fiscal target and policy objectives. Finance has identified the delivery of budget papers, related updates and appropriation bills that are accurate, delivered within required timeframes and meet fiscal and policy objectives and legislative obligations as an appropriate measure of Finance’s performance in undertaking this activity. Budget papers and updates, together with annual appropriation acts, are essential elements of the Australian Government budget process:
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Performance criterion The government’s financial statements, including monthly statements, are complete, accurate and released publicly on timeframes agreed with the government. Criterion source Corporate Plan 2017-18, page 17 |
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Result against performance criterion Achieved All of the government’s financial statements were prepared in accordance with publicly agreed timeframes:
The government’s 2016-17 consolidated financial statements were signed by the Finance Minister and received an unmodified report from the Auditor-General on 27 November 2017. |
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Analysis Another measure of Finance’s performance in achieving the 'advising on expenditure' element of its purpose is through the timely public release of complete and accurate government financial statements. The Australian Government has a robust financial reporting framework, with key reporting outputs including:
Monthly financial statements, the Final Budget Outcome and the consolidated financial statements are required by legislation and are integral to the Commonwealth's accrual budgeting and reporting framework and complement the budget process by providing outcomes against budget estimates. |
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Performance criterion Commonwealth entities have access to cash made available by parliament on a daily basis. Criterion source Corporate Plan 2017–18, page 17 |
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Result against performance criterion Achieved The cash needs of each and every Commonwealth entity were met every day of the reporting period. |
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Analysis Finance also contributes to the' advising on expenditure' element of its purpose by managing the daily disbursement of cash to Commonwealth entities for operating purposes. Finance’s robust financial systems and frameworks support the processing of a daily disbursement of cash through the Central Budget Management System to meet the daily cash requirements of Commonwealth entities. This is crucial. Meeting the funding requirements of entities enables them to continue to deliver on the government’s policy objectives, including the provision of services to the community. In order to ensure that no entity is prevented from delivering its services due to a lack of cash, and to ensure the ongoing operations of government, Finance has a target of meeting all entities’ cash requirements on each day of the financial year. |
Public Sector resourcing and transformation
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Performance criterion Finance’s management of the Public Service Modernisation Fund process ensures that the projects delivered modernise the public service. Criterion source Corporate Plan 2017–18, page 18 Performance criterion Finance facilitates:
Criterion source Corporate Plan 2017-18, pages 18-19 Performance criterion Finance facilitates the investment of Commonwealth entities to place their operations on a more sustainable basis. Criterion source Corporate Plan 2017-18, page 19 |
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Result against performance criteria Achieved The Public Sector Modernisation Fund is a $500 million investment in the sustainability and transformation of public sector entities over 2017-18 to 2019-20. Responsibility for delivery of Public Service Modernisation Fund projects lies with entities that were appropriated funding to deliver specific projects. Finance has received funding to deliver some projects. Finance also has a stewardship role in monitoring Modernisation Fund project progress through quarterly project updates. This includes providing advice and reporting to the Secretaries APS Reform Committee and the Minister for Finance and the Public Service on project performance. Status reports indicate that 36 projects are on track, four projects have identified delays, one project did not commence due to an organisational restructure. Owners of projects with delays have advised that mitigations are in place and delays will not impact on final outcomes. Through the projects being delivered under the Modernisation Fund there is a strong focus on developing APS wide data analytics capability and identifying effective practices to place Comonwealth entity operations on a more sustainable basis. |
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Analysis This criterion contributes to driving public sector transformation and delivering efficient, cost-effective services to, and for, government. It includes oversight, coordination and analysis of Public Service Modernisation Fund project reporting. Fund projects report strong progress to 30 June 2018 with evidence of improved quality of policy advice, policy outcomes and efficiency of operations emerging. |
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Performance criterion Back-office functions (e.g. financial, human resources and associated IT systems) for 60 agencies are consolidated into six shared service hubs. Criterion source Corporate Plan 2017-18, page 18 |
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Result against performance criterion Achieved As at 30 June 2018, the six shared services hubs were providing one or more services to 35 agencies across the Australian Public Service (APS), including five corporate entities that have opted into the program. This exceeds the target of 24 agencies for 2017-18 identified in Finance's 2017-18 Corporate Plan with 60 agencies to be achieved by 30 June 2020. |
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Analysis Finance has policy and program responsibility for the whole-of-government Shared Services Program. This performance criterion demonstrates the implementation status of the program by tracking the number of agencies that are receiving some of their corporate service functions through a shared services provider hub arrangement. During 2017-18, a significant program of work was undertaken to inform the future direction and architecture of the program, with particular focus on:
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Performance criterion Entities participating in the Streamlining Government Grants Administration Program adopt the common grants management processes being delivered via the two grants administration hubs (the Community Grants Hub and the Business Grants Hub), replacing the multiple ICT systems and business processes currently in operation. Criterion source Corporate Plan 2017-18, page 18 |
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Result against performance criterion Achieved As at 30 June 2018, 86 per cent of existing grant programs are on a grants hub or scheduled to transition to a grants hub by 30 June 2019, exceeding the target of 74 per cent identified in Finance's 2017-18 Corporate Plan. |
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Analysis Finance has program responsibility for the whole-of-government grants administration arrangements through the Streamlining Government Grants Administration Program. This performance criterion demonstrates the transition of in-scope granting activities to grants administration hubs. During 2017-18, work has focused on building the required scale of the grants administration hubs to prepare for contestability, including:
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Performance criterion Finance participation in the Data Integration Partnership for Australia will contribute to an increase in data analytics capability across Commonwealth entities. Criterion source Corporate Plan 2017-18, page 19 |
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Result against performance criterion Achieved Finance established a Government Business Analytical Unit which commenced two projects focused on APS workforce analysis and studying drivers of productivity in the public sector. Finance is also delivering the Secure Information Sharing Capability as a data asset that will allow sharing, integration, analysis and reporting of government data between Commonwealth entities in a protected environment. |
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Performance criterion Commonwealth entities and companies understand their obligations under the Public Governance, Performance and Accountability Act 2013,(PGPA Act) and are equipped and supported to meet them. Criterion source Corporate Plan 2017-18, page 19 Performance criterion Governance and assurance are effective in supporting accountable authorities to meet their obligations under the PGPA Act. Criterion source Corporate Plan 2017–18, page 23 |
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Result against performance criteria Achieved The annual Chief Financial Officer Survey for 2017 was sent to chief financial officers on 4 December 2017. Twenty-six Commonwealth entities and companies responded, and no significant issues were identified. In addition, under a new process, the Secretary of Finance wrote to 13 new accountable authorities to advise of their duties and responsibilities under the PGPA Act. Where requested by new accountable authorities, six face-to-face briefings occurred. Guidance on these duties is also available on the Finance website (Resource Management Guide No. 200). |
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Analysis The Chief Financial Officer Survey is used as a proxy measure to inform Finance on how well Commonwealth entities and companies understand their obligations under the PGPA Act and are supported by Finance to meet these obligations. In 2017-18, the survey results indicated no significant issues in operating under the PGPA Act. The operation of the PGPA Act underpins Finance’s purpose by supporting proper and sustainable use of public resources and a coherent system of governance accountability for Commonwealth entities and companies. The general duties of accountable authorities are set out in sections 15 to 26 of the Act. The general duties include three fundamental duties:
Finance’s engagement with new accountable authorities is a measure of the broader support we provide to Commonwealth entities to build and strengthen governance and accountability by ensuring new accountable authorities are well supported and equipped to understand their duties in governing their entity. |
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Performance criterion The government and key parliamentary committees have confidence that public resources are used efficiently, effectively, economically and ethically. Criterion source Corporate Plan 2017-18, page 20 Performance criterion Better performance information is available to the Australian Parliament and the public. Criterion source Corporate Plan 2017–18, page 20 |
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Result against performance criterion Achieved As at 30 June 2018 there were no Australian National Audit Office (ANAO) reports identifying adverse findings on the PGPA Act and associated rules. The ANAO tabled two performance audit reports on the performance framework in 2017-18: Report No. 36 - Corporate Planning in the Australian Public Sector 2017-18 and Report No. 33 - Implementation of the Annual Performance Statement Requirements 2016-17. These, and the Joint Committee of Public Accounts and Audit's subsequent Report 469: Commonwealth Performance Framework, tabled on 6 June 2018, contained no adverse findings. Report 469 did, however, make recommendations that included:
Finance has provided a response to the recommendations. Finance’s analysis of 2017-18 corporate plans and 2016-17 annual performance statements identified an overall improvement in quality of performance reporting. The 2017-18 Corporate Plans - Lessons Learned paper was published in December 2017. The 2016-17 Annual Performance Statements - Lessons Learned paper was published in April 2018. |
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Analysis This performance criterion uses ANAO audit reports and Joint Committee of Public Accounts and Audit's (JCPAA) inquiry reports as a proxy measure of Finance’s performance in implementing and maintaining the Commonwealth performance framework. It is a measure of how effective the various products and services that Finance provides are in ensuring Commonwealth entities meet the reporting requirements of the PGPA Act, and improve the quality of performance reporting. As an example, an adverse ANAO finding might indicate that there is an issue with guidance or advice provided, providing Finance with the opportunity to identify the issue and take remedial action. In the case of this reporting period, there were no adverse findings. However, the recommendations of the JCPAA's Report 469 provide areas of focus for Finance to improve and enhance the guidance and services provided to Commonwealth entities. |
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Performance criterion Independent statutory review of the PGPA Act identifies the level of effectiveness of the Act and associated rules in supporting a robust resource management framework. Criterion source Corporate Plan 2017–18, page 20 Program 2.1, Portfolio Budget Statements 2017-18, page 36 |
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Result against performance criterion Substantially achieved An independent statutory review of the PGPA Act and Rule was undertaken as required by section 112 of the Act. The Minister for Finance appointed Mr David Thodey and Ms Elizabeth Alexander to conduct the review. Sixty-nine submissions were received and numerous consultations were held across the government and other sectors to inform the development of a draft report. This draft was released on 30 May 2018 for public comment, with a further 58 submissions received in response. As at 30 June 2018, the final report was still being developed. |
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Analysis In their draft report, the reviewers found that the PGPA Act and Rule have established a coherent, principles-based system of governance, accountability and performance reporting for the Commonwealth. The review makes recommendations to reinforce and improve a range of matters. Key themes include the role of leadership, performance and annual reporting, risk, audit committees and improving how the Commonwealth joins up in delivering on its goals. The independent review into the operation of the PGPA Act and Rule was completed on 19 September 2018 with the tabling of the final review report, including 52 recommendations, in the Parliament. The implementation of the recommendations will follow consideration of the report by the government and parliament. Finance supported the review by providing a dedicated secretariat. |
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Performance criterion Investments of managed funds create returns within the agreed level of risk. Criterion source Corporate Plan 2017–18, page 20 |
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Result against performance criterion Achieved The Future Fund Management Agency has advised that the benchmark rate of return for the Future Fund, the Medical Research Future Fund, the DisabilityCare Australia Fund, the Building Australia Fund and the Education Investment Fund were met for the year to 30 June 2018. Finance also provided advice on policy relating to the government’s investment funds and governance matters. |
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Analysis Finance supports the government by maintaining a policy, regulatory and legislative framework that allows the Future Fund Board of Guardians to meet its responsibilities and achieve its investment targets within the agreed level of risk. Finance provides advice to the government on investment mandates and governance arrangements for the government’s various investment funds. This includes advice on amounts credited to the funds and payments debited from the funds, which comprise the:
The government announced, in the 2016-17 Mid-Year Economic and Fiscal Outlook that the Building Australia Fund and the Education Investment Fund will be closed. At 30 June 2018, legislation to effect closure had not been passed by parliament. Finance provided advice to the government on the establishment of the proposed Aboriginal and Torres Strait Islander Land and Sea Future Fund. At 30 June 2018, legislation had been introduced to the parliament. |
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Performance criterion Finance works with external stakeholders to develop, implement and maintain systems and policies to support a fair, efficient, and transparent procurement framework for the Australian Government and its suppliers. Criterion source Corporate Plan 2017–18, page 21 |
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Result against performance criterion Achieved Finance works proactively with Commonwealth entities and external stakeholders to improve procurement practices. |
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Analysis Finance develops, implements and maintains systems and policies to: manage sustainable public sector resourcing; deliver effective government services; and support a fair, efficient and transparent procurement framework for the Australian Government and its suppliers. Procurement is strategically important to all government agencies because it supports the efficient delivery of government policies, programs and services. Poor procurement processes can lead to sub-optimal outcomes, such as delays or additional costs to redress problems. In 2017-18, Finance’s management of the procurement framework included:
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Performance criterion Whole-of-Australian-Government procurement arrangements for non-ICT corporate services (e.g. travel bookings and major office equipment) generate savings for Commonwealth entities that access these arrangements. Criterion source Corporate Plan 2017–18, page 21 |
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Result against performance criterion Achieved Whole of Australian Government procurement arrangements continue to deliver savings through discounted pricing and administrative efficiencies through centralised procurement and contract management. |
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Analysis During 2017-18, Finance approached the market for:
Replacement contracts for both travel accommodation and stationery office supplies were put in place in 2017-18. Both deliver increased efficiency and ongoing savings through improved pricing, conditions and fee structures. |
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Performance criterion In accordance with government targets:
Criterion source Corporate Plan 2017–18, page 21 |
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Result against performance criterion Achieved The results from the 2016-17 Australian Government Property Data Collection were released in May 2018. The results showed that since 2014 the number of tenancies meeting the office occupational density target has doubled to 25 per cent. Over the same period, the Commonwealth’s overall footprint has reduced by nearly 10 per cent. The coordinated procurement arrangements for leasing and property services were established in September 2017 and the first entities transitioned on 1 January 2018. As at 30 June 2018, 13 entities had transitioned to the new arrangements. These arrangements will, where feasible, facilitate the ongoing absorption of entities into existing vacant space (Operation Tetris). The divestment program is ongoing. Since 2014 there have been over 115 sales returning in excess of $173 million. An additional 36 properties are being prepared for sale. |
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Analysis Finance is responsible for the:
Finance is demonstrating its contribution to the purpose of public sector resourcing and transformation through reforming and transforming the management and operations of Commonwealth property assets and interests through the National Property Efficiency Program and the National Property Divestment Program. The National Property Efficiency Program aims to capitalise on the Commonwealth 's position as a major purchaser of leases and facilities management services in the Australian property market through:
Since 2014, Finance has been reducing Commonwealth property holdings and therefore ongoing maintenance costs, through the non-Defence National Property Divestment Program. Properties that are surplus to requirements are divested in accordance with the Commonwealth Property Disposal Policy, which requires consideration that public land serves the community and is divested to support government policy priorities. A commitment to genuine engagement with our external stakeholders, through both formal governance and informal arrangements, has provided an open channel of communication to support the delivery of these programs in particular. This close collaboration has helped to establish valuable linkages of benefit to both Finance and entities as we deliver these and other Commonwealth property-related initiatives. |
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Performance criterion Facilitate and monitor government business enterprise (GBE) delivery of the government’s key infrastructure priorities, including Western Sydney Airport, inland rail and naval shipbuilding. Criterion source Corporate Plan 2017–18, page 22 |
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Result against performance criterion Achieved Finance, in collaboration with the relevant shareholder departments, has implemented governance arrangements to facilitate the government’s key infrastructure and defence projects. These arrangements include updated governance documentation, statements of expectations and regular meetings between shareholder departments, the relevant GBE and other key stakeholders. Emerging issues and key risks for each of the projects are monitored and reported on at the regular governance meetings and escalated as required. Shareholder departments provide regular briefings to shareholder ministers and updates to the government on Western Sydney Airport, inland rail and naval shipbuilding. |
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Analysis Finance provides advice to the Australian Government relating to its GBEs and other commercial entities. A government business enterprise is a Commonwealth entity or Commonwealth company that is prescribed by the rules (section 8 of the PGPA Act). Section 5 of the Public Governance, Performance and Accountability Rule 2014 prescribes nine GBEs: two corporate Commonwealth entities; and seven Commonwealth companies. Three of these GBEs - WSA Co Limited, Australian Rail Track Corporation Limited and Australian Naval Infrastructure Pty Ltd - are delivering key infrastructure priorities such as Western Sydney Airport, inland rail and naval shipbuilding. Finance’s primary tasks in relation to GBEs are to:
Finance regards its effectiveness in facilitating and monitoring GBE delivery of the government’s key infrastructure priorities as a valuable contribution to the public sector resourcing and transformation element of Finance’s purpose. |
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Performance criterion Continue to encourage ongoing efficiency and financial sustainability in GBEs. Criterion source Corporate Plan 2017–18, page 22 |
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Result against performance criterion Achieved Finance continues to provide advice to Commonwealth GBEs with respect to corporate planning, financial and operational performance and other significant programs of work. Advice is provided on a regular basis to shareholder ministers on the compliance and performance of the GBEs, based on information provided in corporate plans, quarterly reports and annual reports as well as regular interactions with the GBEs. Corporate plans provided by most GBEs comply with the PGPA Act and the Commonwealth Government Business Enterprises – Governance and Oversight Guidelines (the GBE Guidelines). Shareholder departments work closely with all GBEs to effect amendments to their corporate plans to ensure final versions are compliant with the PGPA Act and GBE Guidelines. Finance aims to ensure that GBE governance frameworks are fit-for-purpose for delivering desired outcomes and that GBEs operate efficiently and are focussed on financial sustainability. A review of the GBE Guidelines was conducted and revised guidelines were published on Finance’s website in January 2018. Finance is continually looking to ensure best practice, both in the oversight of GBEs and in the consistency and quality of analysis and briefing. The first GBE Company Secretaries Forum was held on 14 June 2018. It is anticipated that the forum will be held annually and aims to bring company secretaries and shareholder departments together to facilitate shared learnings, experiences and discussions on best practice approaches. |
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Analysis This performance criterion uses a range of indicators to measure Finance's performance in encouraging Commonwealth GBE efficiency and financial sustainability, including:
These measures demonstrate Finance's activities to encourage the ongoing efficiency and financial stability of GBEs. |
Delivering effective services to, and for, government
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Performance criterion Meet client needs for services including:
Criterion source Corporate Plan 2017–18, page 23 |
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Result against performance criterion Achieved The Service Delivery Office (SDO) delivered on its agreed service levels for clients, and worked with existing and new clients to support them to fully transition to a cost-effective, quality shared service offering. |
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Analysis Operating the SDO is a key activity that Finance undertakes to achieve the 'delivering effective services to, and for, government' element of Finance's purpose. The SDO, one of six shared services hubs, is rapidly modernising its service offering to deliver faster and better outcomes for the government agencies it services. The SDO has realised a 10 per cent reduction in operating costs in one year, with savings handed back to client agencies, so that they can focus on delivering better front line services to citizens and businesses. This success has been delivered through a combination of initiatives including: a client-centric approach focused on stronger engagement and transparency; the introduction of enhanced management practices; the use of innovative technologies; and a commitment to service quality through improved governance arrangements. Investment in digital technologies has been fundamental to the SDO’s achievements throughout 2017-18. Transitioning to a private cloud hosting service has delivered highly accessible services, including the introduction of apps that are mobile-enabled for use by clients. The SDO has also introduced five automations that are eliminating errors and reducing costs in high-volume and repetitive processes. Investments based on robust evidence have improved quality and efficiency. The SDO’s client agencies now have access to dynamic reporting that provides real-time access to strategic and performance data. Client agencies have also been able to reduce effort in their organisations through the SDO’s introduction of technologies like digital invoice management. |
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Performance criterion Comcover is financially sustainable. Criterion source Corporate Plan 2017–18, page 24 |
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Result against performance criterion Achieved Comcover is self-funded and continues to deliver cost-effective services that encourage agencies to effectively manage risk. It is sustained though the collection of annual fund member contributions. |
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Analysis Comcover was established as a self-managed fund in July 1998 to implement the government’s self-insurance policy. The operations of Comcover are funded from the Comcover Special Account, which collects premiums from members and uses this revenue to fund all claims that fall under the statement of cover. It is mandatory for all Commonwealth entities that are subject to the PGPA Act and classified in the general government sector to be Comcover members. Outstanding claims are actuarially assessed each quarter and annual risk-based premiums are set based on actuarial advice regarding the expected cost of claims to be incurred in the policy year plus administration expenses. By providing a clear price signal, these risk-based premiums encourage agencies to effectively manage risk. As at 30 June 2018, Comcover had an outstanding claims liability of $381.9 million, which was more than covered by the $480.5 million balance in the Comcover Special Account. It is anticipated that Comcover will be able to meet its liabilities as and when they fall due, with the cash balance adequate to cover at least three to four years of normal claims experience. Information on the financial performance and position of the scheme can be found in the department’s financial statements under Note C1: General insurance activities and Note F3: Special accounts (see Part 5 of this report). |
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Performance criterion Comcover assists Commonwealth entities to ensure the appropriate treatment of insurable risks and provides a consistent, whole-of-Australian-Government approach to the management of claims against the Commonwealth. Criterion source Corporate Plan 2017–18, page 24 |
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Result against performance criterion Achieved The risk management benchmarking program results showed that the overall risk maturity of Comcover fund members increased by 3.6 per cent in 2017-18 across each of the nine elements of the Commonwealth Risk Management Policy. The greatest increase, of 4.2 per cent, was observed for element one - 'Establishing a risk management policy', with the lowest increase (2.8 per cent) observed for element eight - 'Maintaining risk management capability'. |
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Analysis Comcover supports entities to obtain the knowledge, skills and expertise they need to successfully implement and integrate risk management within their organisations. Throughout 2017-18, Comcover provided a range of services to entities including:
These services contribute directly to improving the risk maturity of entities. |
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Performance criterion Services meet the needs of parliamentarians, their employees and others as required by the Australian Government. Criterion source Corporate Plan 2017–18, page 24 |
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Result against performance criterion Achieved Service standards that were met, or exceeded, for the period ending 30 June 2018 include:
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Analysis Another measure of Finance’s performance against the 'delivering effective services to, and for, government' element of its purpose is measuring whether the services delivered by Finance under the Members of Parliament (Staff) Act 1984 meet the needs of parliamentarians, their employees and others as required by the Australian Government. Finance regards the delivery of timely and efficient business support to current and former parliamentarians and their employees as essential to their work in the public interest which subsequently benefits the broader Australian community. Parliamentarians are eligible to claim public resources under the Parliamentary Business Resources framework. Through this framework Finance oversees the provision of non-travel related expenses and services to parliamentarians and their respective employees under the Members of Parliament (Staff) Act 1984. COMCAR provides high quality, secure and confidential car-with-driver services to a range of clients, including the Governor-General, the Prime Minister, senators and members of the House of Representatives, the federal judiciary and heads of Commonwealth agencies. COMCAR also provides ground transportation services for official guest of government visits and at major events. In order to determine its performance in delivering these services, Finance has identified four high-level service standards related to essential services delivered by Finance as shown under the result for this performance criterion. |
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Performance criterion The timeliness, efficiency, clarity and transparency of the administration of parliamentary work expenses is improved. Criterion source Corporate Plan 2017–18, page 24 |
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Result against performance criterion Achieved The Parliamentary Expenses Management System (PEMS) project has commenced and is on track to deliver milestones in accordance with the PEMS second-pass business case for an integrated ICT solution to manage and report parliamentarians’ work expenses. Expenditure of $38.1 million was approved for PEMS through the 2017-18 Mid-Year Economic and Fiscal Outlook process. |
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Analysis In addition to delivering services to parliamentarians and their employees, Finance contributes to the delivering effective services to, and for government element of its purpose for parliamentarians through improving the timeliness, efficiency, clarity and transparency of administration of parliamentary work expenses. Finance, in collaboration with the Department of the Prime Minister and Cabinet, the Remuneration Tribunal and the Independent Parliamentary Expenses Authority is implementing the recommendations of the review into an independent parliamentary entitlements system. A major reform from the review is the implementation of a new parliamentary work expenses framework, which commenced on 1 January 2018, and a supporting Parliamentary Expenses Management System (PEMS). The Parliamentary Expenses Management System is a secure, simple digital portal that, once fully implemented, will enable parliamentarians and their staff to manage their work expenses and lodge and track claims using a computer or mobile device with an internet connection. The PEMS solution will address duplication and inefficiencies in existing legacy systems and transform administrative processes and practices through a complete digital technology refresh. The PEMS project, including full reporting functionality, is due for completion in June 2020. The staged and supported transition away from the current paper-based system is in line with the government’s broader digital transformation agenda. |
Overarching analysis of performance against Finance's purpose
As a central agency of the Australian Government, Finance plays a key role in assisting the government to shape and deliver its priorities to ensure public expenditure programs are sustainable and reflect best value to government and the Australian community.
In 2017-18 Finance undertook a diverse range of activities to achieve its purpose such as:
- the coordination, preparation and provision of advice to the Minister for Finance and the Expenditure Review Committee of Cabinet on the delivery of the Budget and related fiscal updates, including appropriations legislation and the government’s financial statements, which contributed to promoting the government’s fiscal target and policy objectives
- provision of analysis, policy advice and costing information
- the daily disbursement through the Central Cash Management System so that entities can deliver on the policy objectives of the government within necessary timeframes
- working with partners across government (e.g. the Digital Transformation Agency, the Department of the Prime Minister and Cabinet and the Department of Education and Training) to invest the government’s $500 million Public Service Modernisation Fund and help establish a smarter, more productive and more sustainable government sector
- implementing and supporting the enhanced Commonwealth performance framework as a means to improve planning and accountability to provide meaningful information to the Parliament and the public (Subparagraph 5(c)(ii) of the PGPA Act)
- delivering services to Commonwealth entities through a shared services hub to help those entities better their delivery of core services
- providing a range of services to parliamentarians, their respective employees and others to assist them in undertaking their duties.
Finance’s progress against its purpose in 2017–18 was achieved in the context of a challenging operating environment. Our role in assisting the government to make informed decisions on its fiscal and policy objectives occurs amid a variety of factors, many of which are outside Finance’s control. In 2017–18, Finance’s performance in achieving its purpose was affected by emerging priorities and environmental pressures, such as needing to have regard to:
- the government’s fiscal strategy and the discipline of a structured budget process
- innovations in business models and technology that will disrupt every sector of the economy, including the public sector
- the substantial contribution of government business enterprises and other Commonwealth entities to the Australian economy
- the parliament and community’s expectations regarding the management of expenses for parliamentarians and their staff.
In 2017–18, Finance’s organisational capacity was enhanced by the department’s continuing transformation into a more flexible, adaptable and responsive organisation—one able to effectively strengthen the capability of the Australian Public Service (APS), as well as Finance’s own employees, to deliver sound policy advice and public administration.
As part of this transformation Finance sought to continue to develop and enhance the enablers required to achieve its purpose—resources, staff, capabilities, leadership, systems and business processes:
- Finance committed to move relevant departmental corporate functions to the shared services hub as a new and innovative way of working, recognising the benefits of operating at scale in the management of corporate functions.
- Finance increased workforce mobility and agility by promoting flexible work practices supported by relevant technology and collaborative workspaces.
- Finance continued to invest in our data capability model—ensuring we have the right hardware, software, people, culture and data in place to allow data analytics to happen more efficiently and effectively, and to support better advice to the government. Finance is leveraging this capability through the Government Business Analytical Unit to provide analytics that deliver benefits at a whole-of-government level.
In this way, Finance sought to promote a modern responsive public service that could operate as effectively and efficiently as possible to deliver government services.
An example of how Finance’s internal transformation is contributing to achieving Finance’s purpose is the Graduate Certificate in Public Policy and Finance, which Finance initiated in 2016 to build capability in public finances and public policy and generate an improved understanding of the fiscal environment and the Australian Government budget framework. The graduate certificate was co-designed by the Department of Finance, the Department of the Prime Minister and Cabinet, the Department of the Treasury, the Department of Education and Training and the Institute for Governance and Policy Analysis at the University of Canberra. Each year, technical experts share their practical experiences with course participants, explaining how the APS operates and making clear the relationship between theory and practice. So far, 60 APS employees have graduated from this program—a strong reflection of the department’s commitment to strengthening public sector workforce capability in this area.
Finance is also continuing to strengthen its commercial, financial and risk analysis on GBEs and the commercial projects that it delivers. It is doing this by engaging commercially minded tertiary education providers to design and deliver training and development programs focusing on financial analysis, governance and risk. These programs, the first of which is expected to be rolled out by the end of 2018, will also be made available to other shareholder departments, further improving the skill sets of officers working with GBEs and promoting Finance’s stewardship agenda. Further, Finance is trialling the services of a commercial private sector expert to provide support and mentor staff working in these areas.
The performance reported in these annual performance statements demonstrates that Finance made substantial contributions towards its purpose. As detailed in the results against the criteria above, Finance demonstrated high levels of performance across all 25 of the performance criteria published in Finance’s Corporate Plan 2017–18, with 23 of the 25 performance criteria assessed as achieved and two assessed as substantially achieved.
Some of the performance highlights for the year included:
- disbursing cash through the Central Budget Management System to meet the cash needs of every Commonwealth entity on each day in 2017–18. This crucial activity enables Commonwealth entities to operate and deliver services, ensuring the ongoing operations of government
- delivering savings through the National Property Efficiency Program and National Property Divestment Program. Since 2014, 115 sales under these programs have contributed in excess of $173 million. Over the same period, the Commonwealth’s overall property footprint has reduced by nearly 10 per cent
- the Service Delivery Office achieving a 10 per cent reduction in operating costs for the government agencies it services, delivering savings to those agencies so they can focus on delivering better frontline services to citizens and businesses.
In 2017–18, despite a changing and dynamic environment, Finance performed strongly across all of the performance criteria specified in Finance’s Corporate Plan 2017–18 to deliver a broad range of substantial contributions to Finance’s purpose.
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