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Corporate governance

This Section discusses the support services and governance structures of the department, which provide a framework to ensure accountability and overall effectiveness.

Corporate services

The Corporate Services and ICT divisions provide high-quality and efficient services to the Department of Finance, enabling us to achieve our objectives.

The Corporate Services division provides strategic advice to the Secretary and Executive Board on corporate governance and departmental administration and provides services to the department and our ministers, including parliamentary coordination and liaison, human resource services, financial advice and support, in-house legal services, facilities management and security, communications and public affairs strategy, and advice and knowledge management.

The ICT division delivers information services, IT and business services to the department and other government agencies. The division supports the Chief Information Officer and Chief Information Security Officer functions of IT security, architecture, service and program delivery, as well as online, technical and government network services.

Governance in Finance

Finance’s governance framework promotes the principles of good governance through engagement with staff on matters of risk management, transparency of Executive Board and committee operations and embedding integrated business planning at all levels. This framework supports the Secretary in discharging her duties under the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Public Service Act 1999.

Figure 3 shows Finance’s governance structure at 30 June 2018.

The Executive Board

The Executive Board provides strategic leadership of the department to ensure program delivery consistent with government policy objectives to an appropriate level of performance. The Board provides leadership and strategic oversight, monitors performance and maintains accountability as the highest advisory and decision-making body in Finance, discharging the Secretary’s duties under the PGPA Act.

In addition to its usual decision-making role, the Board structures its business to ensure that it undertakes key strategic discussions, considers emerging risks, and receives regular updates from the chairs of the subcommittees.

The Secretary of the Department of Finance chairs the Executive Board, supported by the four deputy secretaries of the department as permanent members. In addition, membership of the board is now offered for a period of nine months on a rotating basis to a first assistant secretary and assistant secretary from across the department.

These arrangements reflect the Executive’s commitment to developing leadership capability,
including robust decision-making that incorporates a wide range of perspectives.

Executive Board subcommittees

During the reporting period, the Executive Board had four subcommittees, each chaired by a deputy secretary:

  • Capability and Culture Subcommittee
  • Policy Subcommittee
  • Resources Subcommittee
  • Risk Subcommittee.

In addition, the Leadership and Remuneration Subcommittee of the Executive Board, which is responsible for overseeing and providing advice on people management matters, is chaired by the Secretary and comprises deputy secretary membership.

Figure 3: Finance’s governance structure, at 30 June 2018

Audit Committee

The Audit Committee provides independent advice and assurance to the Secretary on the appropriateness of the department’s accountability and control framework—particularly those aspects concerning performance and financial reporting and systems relating to risk and control. It also provides assurance on the adequacy of the Australian Government’s consolidated financial statements production and risk planning process in Finance.

In 2017–18, the Audit Committee had four external members (including the independent chair) and two departmental members. It met five times during the year and representatives from the Australian National Audit Office, the chair of the Risk Subcommittee, the head of Internal Audit, the Chief Financial Officer and the department’s internal audit service provider attended as observers.

The Audit Committee has two subcommittees, chaired by external members, to support it in performing its functions:

  • The Financial Statements Audit Subcommittee maintains an ongoing review of the process for preparing the department’s annual financial statements.
  • The Performance Framework Subcommittee assists the Audit Committee in meeting its responsibilities under the PGPA Act in relation to performance reporting.

The Audit Committee works closely with the Risk Subcommittee in relation to oversight of the department’s risk management framework, with the Audit Committee chair attending the meetings of that subcommittee.

Table 1 shows Audit Committee membership during 2017–18, and the number of meetings attended by each member during the year.

Table 1: Audit Committee membership, 2017–18

Integrated business planning framework

Finance’s integrated business planning framework ensures alignment across domains of enterprise decision-making, including:

  • strategic review and prioritisation
  • enterprise risk framework
  • corporate planning
  • divisional business planning
  • budgeting
  • investment and resource planning.

Strategic reviews

In 2017–18, Finance introduced a biannual strategic review of all divisions, providing the Executive Board with a comprehensive picture of departmental priorities, risks and pressures, enabling us to align funding with priorities and focus on how we achieve efficiencies and work effectively across boundaries. It is an essential element of the department’s integrated business planning framework.

The strategic review process engages the broader leadership cohort of the department, with the Senior Executive Service in each division able to provide and receive a comprehensive perspective on the department’s risks, priorities and opportunities for improvement and innovation.

The strategic reviews have provided the department with greater visibility of enterprise risks and enabled us to set budgets more effectively and identify areas to build capability and mobilise staff to priority areas. The reviews also facilitate improved measurement of progress in delivering business improvements and efficiency initiatives and innovations.

Planning and performance reporting framework

The premise of the planning and performance reporting framework is that, where there is a shared understanding of the department's purposes and priorities - and resources and activities are properly organised and aligned - we will achieve high standards of performance.

The operating model allows Finance to adjust its activities and resourcing to align with government priorities as expressed in the department's corporate plan and measured through the annual performance statements. Figure 4 illustrates Finance's approach to planning and reporting.

Figure 4: Finance’s planning and performance reporting cycle

Managing risk in Finance

The Secretary and Executive Board have oversight of the department’s risk management framework through the Risk Subcommittee. The framework supports the Secretary to meet her duty under the PGPA Act and complies with the Commonwealth Risk Management Policy.

The framework sets out our risk management policy and guides the identification, management and reporting of risks where they may impact on business at the strategic and operational level. Our ability to manage opportunities and risks directly impacts on how we achieve our purpose.

We are continuing to support a positive risk culture throughout the department and embed systematic risk management into business operations. We are doing this by supporting staff to take a more open and proactive approach to managing risk that considers both opportunities and threats. By increasing risk capability at all levels of the organisation, we empower staff to have the knowledge, judgement and confidence to make more informed risk-based decisions. This also ensures that our people are accountable, understand risk and are supported by their managers in accordance with the department’s risk appetite.

In 2017–18, the department reviewed the framework and updated the risk appetite statement and key strategic and operational risks. This review not only ensured the framework continues to reflect our dynamic operating environment, but also strengthened the alignment of the framework with our purpose and strategic focus for transformation in the year ahead.

Business continuity management

Business continuity management is integral to the department’s risk management arrangements. It entails careful planning to enable the continuation or timely resumption of critical functions and eventual restoration to normal operations following a business interruption.

In the event of a business interruption, a central control team is convened by the Deputy Secretary of Business Enabling Services. The team serves as the central point of communications and coordination for the department’s response and recovery.

Business continuity plans are reviewed and tested annually to ensure they meet business requirements.