The department’s operations in Australia and overseas are supported by a sound financial management framework, which includes robust internal controls, financial analysis and forecasting, and regular financial performance reporting.

In its report, Interim Phase of the Audit of Financial Statements of Major General Government Sector Agencies for the year ending 30 June 2018, the ANAO found that the department had effective internal controls to ensure good financial management and a sound financial reporting framework.

We continued strong management of financial resources to ensure effective implementation and alignment of government priorities in foreign affairs, trade and investment, development assistance and high-quality passport and consular services. This was essential in an increasingly tighter fiscal environment.

The department is committed to supporting the government’s smaller government agenda through implementation of efficiencies identified in the department’s Functional and Efficiency Review and contributions to the Whole-of-Government - Shared and Common Services Program. We finalised a number of internal reforms aimed at improving efficiency and finding better, smarter ways of working, and continued to implement further innovations. These included modernising and enhancing financial systems and processes, reviewing and improving any remaining internal red tape processes, and continued rationalisation of overseas operations to deliver contemporary work practices and new models of operation in support of the government’s agenda.

Financial management information system

The department delivered enhancements to its financial management information system to support innovation and the reduction of red tape in 2017–18. We will continue to work towards using improved finance technology to support these core objectives, including towards the delivery of shared service initiatives.

Asset management

Internal capital funding is allocated based on sound business cases developed by work units, which are assessed rigorously by the central finance area and approved by the executive. The executive reviews capital investment throughout the year. The long-term strategic planning of the department’s investment needs is supported through the implementation of the Capital Management Plan. We conduct informal reviews and impairment testing of asset classes annually to ensure asset values are fairly stated in the end of year financial statements.

Purchasing

The department’s purchasing was undertaken in accordance with the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Commonwealth Procurement Rules.

We rolled out an innovative online module designed to make procurement decisions easy and accessible to all staff. The module provided a high degree of confidence in consistent and accurate procurement decisions and associated processes.

Consultants

During 2017–18, 35 new consultancy contracts were entered into involving total actual expenditure of $2,415,926 (inclusive of GST). In addition, 23 ongoing consultancy contracts were active during the period, involving total actual expenditure of $2,963,470 (inclusive of GST).

The department engaged consultants when required for specialist expertise or independent research, review, assessment or creative solutions to assist decision-making. The decision to engage consultants was made in accordance with the PGPA Act and related rules, including the Commonwealth Procurement Rules and relevant departmental policies.

Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website: tenders.gov.au.

The value of consultancy expenditure reported in Note 1.1B Suppliers in the financial statements differs as it includes contracts below the AusTender reporting threshold, includes accrual accounting adjustments, foreign currencies converted on a different basis and is GST exclusive.

Australian National Audit Office access clauses

The department’s standard contract templates include provisions allowing the ANAO to access a contractor’s premises.

Exempt contracts

There was one contract in excess of $10,000 (inclusive of GST), with a value of $910,121 exempted from being published in AusTender on the basis that publication would disclose exempt matters under the FOI Act.

Procurement initiatives to support small business

The department supports small business participation in the Commonwealth Government procurement market. Small and medium enterprises (SME) and small enterprise participation statistics are available on the Department of Finance’s website: finance.gov.au/procurement/statistics-on-commonwealth-purchasingcontracts.

The department remained committed to ensuring that SMEs were able to engage in fair competition and demonstrated this through procurement practices, including use of the Commonwealth contracting suite of templates.

In 2018 the department held its second Aid Supplier Conference. The conference fosters shared understanding of working with the department to deliver an aid program that contributes to Australia’s national interest. It attracted widespread interest from a diverse aid supplier community.

The department recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website: treasury.gov.au.

Indigenous business engagement

In 2017–18 we took a holistic and strategic approach to promoting Indigenous Australians’ participation in international markets and access to departmental procurement.

The department is working to improve Indigenous Australians’ economic prosperity by creating opportunities for greater access to, and participation in, the global economy. We released Promoting the economic interests of Indigenous Australian businesses overseas: a charter in December 2017, providing information on how Indigenous businesses can engage with international markets. The charter is available on the department’s website (http://dfat.gov.au/about-us/publications/Pages/promoting-the-economic-interests-of-indigenous-australian-businesses-overseas-a-charter.aspx). We also created opportunities for Indigenous businesses to contribute to our aid program.

Our Indigenous supplier diversity strategy has consistently exceeded its contract quota since the inception of the Commonwealth’s Indigenous Procurement Policy. We expanded the application of the Indigenous Procurement Policy (website: https://www.pmc.gov.au/resource-centre/government/commonwealth-indigenous-procurement-policy) to a broader range of procurements than is mandated under this policy and encouraged our delivery partners to engage with Indigenous businesses. Since implementation of the Indigenous Procurement Policy, the department has worked with 70 Indigenous suppliers in over 300 contracts, worth over $30 million. Our efforts were recognised by Supply Nation (website: www.supplynation.org.au) as a finalist for the ‘Government Supplier of the Year’ awards in 2017 and 2018.

Indigenous procurement

Grants

Information on grants awarded by the department during 2017–18 is available at dfat.gov.au/about-us/business-opportunities/grant-pportunities/Pages/grants-programs.aspx.

(L. to R.) Mr Murray McLean, Chair, Australia Japan Foundation, Mr Robert (Noriyuki) Tsubonuma, CEO, Mitsubishi Australia, Ms Sophie Galaise, Managing Director, Melbourne Symphony Orchestra, Ms Jenny Bloomfield, DFAT Victoria State Director, Mr Andrew Mackenzie, CEO BHP, Mr Kazuyoshi Matsunaga, Consul General of Japan in Melbourne and Mr Noboru Katsu, Chairman and CEO, Mitsui Australia celebrate MSO’s performance of music from the Studio Ghibli films of Hayao Miyazaki, Australia now Japan April [DFAT]