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Part 3.5: Financial and Property Management

Financial accountability responsibilities

The Department’s financial accountability responsibilities are set out in the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and subordinate legislation, collectively known as finance law.

In support of the finance law, the Department’s Accountable Authority Instructions are issued in accordance with section 20A of the PGPA Act. The Department also issued Finance Business Rules that clearly set out the rules and processes required for the financial administration of the Department.

Finance law and the supporting instructions and rules provide a framework to ensure the efficient, effective, economical and ethical use of public resources. The Executive Board is responsible for monitoring and addressing departmental performance and risks. Advice on financial matters including administered, departmental and capital expenditure is provided through monthly reports from the Chief Finance Officer, and supported by the Administered Program Board and the Investment and Implementation Board. Further, the Department’s Audit and Risk Committee provides independent advice and assurance to the Accountable Authority (the Secretary).

Finance law also mandates the production of audited financial statements prepared in accordance with the Australian Accounting Standards. The complete set of financial statements for the Department is provided in Part 4: Financial Statements.

Managing our assets

The Department holds financial and non-financial assets. Financial assets include cash and receivables, which are subject to internal controls and reconciliations.

Non-financial assets are held for operational purposes and include computing software and hardware, building fit-out, furniture and fittings. Decisions about whole-of-life asset management are undertaken in the context of the Department’s broader strategic planning to ensure that investment in assets supports cost-effective achievement of the Department’s objectives.

Effective management of the Department’s capital budgets is achieved by:

  • including whole-of-life consideration in proposals for capital expenditures;
  • whole-of-Department prioritisation of capital projects and major purchases by the Department’s Investment and Implementation Board;
  • undertaking regular stocktakes of physical assets; and
  • annually reviewing assets for indications of impairment and changes in expected useful lives.

Procurement

Purchasing

The Department’s approach to procurement activity is driven by the core principles of the Commonwealth’s financial management framework. The framework encourages competition, value for money, transparency and accountability, as well as the efficient, effective, ethical and economical use of Commonwealth resources.

During 2018-19, the Department continued its focus on improving the procurement practices and knowledge of officers and delegates undertaking procurement activities. External reviews were undertaken to develop a roadmap for improving the central procurement advice function and assurance maturity. Additional assistance is being offered to business areas undertaking large or complex procurements and the corporate service offering has been defined to promote best practice and collaboration across business functions.

Initiatives to support small business

Small and Medium Enterprises (SME) make up the majority of all Australian businesses, contribute billions of dollars to the economy and provide employment for millions of Australians. In addition to the use of mandatory Whole of Australian Government panels, the Department supports small business participation in the Commonwealth Government procurement market. SME participation statistics are available on the Department of Finance’s website at: www.finance.gov.au/procurement/statistics-on-commonwealth-purchasing-contracts/

The Department’s measures to support SMEs include:

  • ongoing promotion and application of the Indigenous Procurement Policy, of which detailed information is included below;
  • Small Business Engagement Principles clearly communicated in simple language and in an accessible format as outlined in the Government’s Industry Innovation & Competitiveness Agenda;
  • incorporating the Supplier Pay on-time policy mandating 20 day payment terms for contracts under $1 million;
  • use of the Commonwealth Contracting Suite (CCS) to minimise the burden on businesses contracting with the Commonwealth Government; and
  • internal guidance and advice to support the Indigenous Procurement Policy, Small Business Engagement Principles and the CCS.

The Department recognises the importance of ensuring that small businesses are paid on time. The results of the most recent Survey of Australian Government Payments to Small Business are available on the Treasury’s website.1

Over the 2018-19 financial year, the Department has continued to enhance and mature its Vendor Invoice Management System to ensure timely payment to small businesses.

SME Assist

SME Assist is a dedicated service that the Therapeutic Goods Administration offers to help small to medium enterprises, researchers, start-ups and those unfamiliar with medicine and medical device regulation to understand their regulatory and legislative obligations.

The service provides support through email and phone help, interactive decision tools, guidance material, webinars, workshops and a subscription service.

Since launch of the service in June 2017 there have been:

  • 116,000 visitors to the SME Assist web pages;
  • 424 subscribers to SME Assist;
  • 32,500 uses of interactive decision tools;
  • 11 ‘Meeting Your Obligations’ workshops held across Australia;
  • 643 attendees at workshops; and
  • 1 educational webinar.

Indigenous Procurement Policy

Indigenous businesses are vital to creating jobs for, and employing more Indigenous Australians. The Indigenous Procurement Policy aims to enable these Indigenous businesses to grow and create opportunities for Indigenous Australians.

The Department’s target of 74 contracts with Indigenous businesses was exceeded with 140 new contracts entered into with Indigenous business during 2018-19, worth a combined value of $24.8 million. This represents a reduction of 1.3 per cent of contract volume from 2017-18, but the overall value of these contracts increased 15.8 per cent from $21.4 million.

From 1 July 2019, to ensure Indigenous businesses win higher value contracts at a level closer to those of non-Indigenous businesses, a target based on the value of contracts awarded will be introduced. The target will be set at one per cent for financial year 2019-20 and will be increased by 0.25 per cent each year until it reaches three per cent in 2027-28.

The Department continued to promote awareness of opportunities to procure goods and services from Indigenous businesses. Together with the implementation of the Department’s Innovate Reconciliation Action Plan 2017–19, which incorporates Indigenous business development targets, these initiatives provided greater awareness and recognition of Indigenous suppliers and the benefits of their involvement in the Department’s procurements.

The Department is a member of Supply Nation, which supports and empowers Indigenous enterprises to achieve success and build business.

Consultants

The Department engages consultants to provide specialist expertise, independent research, reviews or assessments in relation to:

  • investigating or diagnosing a defined issue or problem;
  • carrying out defined reviews or evaluations; or
  • providing independent advice, information or creative solutions to assist the Department in decision-making.

The Department takes into account the skills and resources required for the task, the skills available internally and the cost-effectiveness of engaging external expertise. Decisions to engage consultants are made in accordance with the PGPA Act and related regulations, including the Commonwealth Procurement Rules and other internal policies.

During 2018-19, 557 new consultancy contracts were entered into involving total actual expenditure of $28.7 million. In addition, 280 ongoing consultancy contracts were active during the period, involving total actual expenditure of $18.1 million. The total actual expenditure on both new and ongoing contracts for 2018-19 was $46.9 million.

This Annual Report contains information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website at: www.tenders.gov.au/. In line with the Commonwealth Procurement Rules, Austender contains information on contract and consultancies valued at or above $10,000.

Exempt contracts and Australian National Audit Office access

Exempt contracts

In 2018-19, a total of 111 contracts were exempt from reporting on AusTender on the basis that publishing contract details would disclose exempt matters under the Freedom of Information Act 1982. This represents a decrease from 2017-18 where 136 contracts were exempt from reporting.

Australian National Audit Office access clauses

In 2018-19, there were no departmental contracts exempt from the standard contract clauses which grant the Auditor-General access to contractor premises.

Grants

The Department supports a range of Government policy decisions through provision of grant funding across 18 programs and all six Outcomes. In 2018-19, the Department administered over 10,000 grant activities. The most significant grant activity was in Outcome 6 in relation to ageing and aged care, involving over 8,600 grant activities, most of which fell under the Commonwealth Home Support Program. The Department’s grants administration practices are based on the mandatory requirements and principles of grants administration in the Commonwealth Grant Rules and Guidelines (CGRG). The CGRG establish the overarching Commonwealth grants policy framework and articulate expectations of non-corporate Commonwealth entities in relation to grants administration.

The Department’s grants administration is also undertaken in partnership with the Community Grants Hub within the Department of Social Services and the Business Grants Hub within the Department of Industry, Innovation and Science, and the National Health and Medical Research Council, and involves five distinct but interrelated stages:

  • design;
  • select;
  • establish;
  • manage; and
  • evaluate.

In line with the requirements of the CGRG, the Department adopted a risk-based approach to grants administration. Key to the Department’s risk-based approach is risk assessment and management at the design and select stages of the grants administration lifecycle. This approach helps the Department achieve value for money, meet outcomes, reduce administrative burden for funded organisations and apply the principle of proportionality.

Information on grants awarded by the Department during the period 1 July 2018 to 30 June 2019 is available on the Australian Government’s grant information system see, GrantConnect at: www.grants.gov.au. For grants awarded up to 31 December 2017, information is available on the Department’s website at: www.health.gov.au.

Advertising and market research

In 2018-19, the Department is required to report on all payments over $13,800 (GST inclusive) to advertising agencies, market research organisations, polling organisations, direct mail organisations and media advertising organisations.

This section details these payments, along with the names of advertising campaigns conducted by the Department during 2018-19.

Advertising campaigns

During 2018-19, the Department conducted the below advertising campaigns which were certified by the Secretary in line with the Guidelines on Information and Advertising Campaigns by Australian Government Departments and Agencies (March 2010):

  • Childhood Immunisation Education;
  • Head to Health;
  • Health Star Rating;
  • Maternal Vaccination;
  • Pharmaceutical Benefits Scheme;
  • Private Health Insurance; and
  • Promotion of the human papillomavirus (HPV) vaccine for adolescents.

Further information on these advertising campaigns is available at www.health.gov.au, and in the reports on Australian Government advertising prepared by the Department of Finance and published at: www.finance.gov.au/advertising/

Table 3.5.1: Advertising, market research, direct mail and media advertising payments for 2018-19

Organisation

Service provided

Paid (GST incl)

Advertising agencies (creative advertising agencies which have developed advertising campaigns)

AJF Partnership

Medicine communications (Pharmaceuticals Benefits Scheme)

$961,839

Carbon Media Pty Ltd

Childhood Immunisation Education campaign creative services

$200,464

Carbon Media Pty Ltd

Promotion of the human papillomavirus (HPV) vaccine for adolescents campaign creative services

$30,580

Carbon Media Pty Ltd

Maternal Vaccination Campaign creative services

$21,604

Leo Burnett

Communication for health related information

$287,331

Spinach

Creative services for Health Star Rating Campaign (Private Health Insurance)

$166,473

Market research

Bastion Insights Pty Ltd

Concept testing research Private Health Insurance

$218,900

Bastion Insights Pty Ltd

Research services for communication for the 45 and 65 year old Life Checks

$207,240

Bastion Insights Pty Ltd

Immunisation Attitudinal Monitoring Research

$87,670

Bastion Insights Pty Ltd

Research services to support the establishment of the Aged Care Safety & Quality Commission

$46,420

Bastion Insights Pty Ltd

Concept Testing research services to inform the Head to Health Campaign

$27,445

Engine (Formerly ORC)

Evaluation research for the National Tobacco Campaign

$166,900

Hall & Partners Pty Ltd

Evaluation of the Health Star Rating Campaign

$73,366

Hall & Partners Pty Ltd

Evaluation research for the Immunisation - Get the Facts Campaign

$130,675

Hall & Partners Pty Ltd

Evaluation research for the Private Health Insurance Campaign

$123,517

Hall & Partners Pty Ltd

Evaluation research for Pharmaceutical Benefits Scheme Campaign

$83,976

Snapcracker Research & Strategy Pty Ltd

Concept Testing research for Phase 3 of the Childhood Immunisation Education Campaign

$155,100

Snapcracker Research & Strategy Pty Ltd

Qualitative research around school based Vaccination

$110,000

Snapcracker Research & Strategy Pty Ltd

Maternal vaccination concept testing research

$33,000

Snapcracker Research & Strategy Pty Ltd

Concept testing research for human papillomavirus (HPV) vaccine communications

$33,000

Symego Pty Ltd Trading As Qualie

Research services for the National Bowel Cancer Screening Program (Market testing of Colonoscopy Brochure)

$31,364

Taylor Nelson Sofres Australia Pty Ltd, Trading as Kantar Public

Market research to inform the development of the Pharmaceutical Benefits Scheme Campaign

$264,000

Taylor Nelson Sofres Australia Pty Ltd, Trading as Kantar Public

Provide advice and undertake consumer testing of language for home care pricing

$65,450

Whereto Research Based Consulting

Market research to inform development of a consumer resource for pregnant women

$163,900

Instinct and Reason Pty Ltd

Community attitude of gene technology survey 2018-19

$55,000

Direct mail organisations (includes organisations which handle the sorting and mailing out of information material to the public)

National Mail and Marketing Pty Ltd

National Immunisation Program expansion generic letter and resources

$41,307

National Mail and Marketing Pty Ltd

Cervical screening resources to GPs

$48,811

National Mail and Marketing Pty Ltd

Health Care Homes resource mailout

$50,761

National Mail and Marketing Pty Ltd

Gardasil9 HPV vaccine mailout

$21,602

National Mail and Marketing Pty Ltd

2018 Influenza resources

$71,260

National Mail and Marketing Pty Ltd

Compliance personalised letter

$16,428

National Mail and Marketing Pty Ltd

Maternal pertussis for pregnant women

$96,866

National Mail and Marketing Pty Ltd

Head to Health letter and resources

$52,078

National Mail and Marketing Pty Ltd

National Immunisation Program Schedule changes

$83,562

National Mail and Marketing Pty Ltd

Home Care Reform letters 2017-18

$191,594

Sonic Healthcare

National Bowel Cancer Screening Program - Home Test Kit mail out

$479,952

Media advertising organisations (the master advertising agencies which place Government advertising in the media – this covers both campaign and non-campaign advertising)

Mediabrands Australia Pty Ltd

Media buy National Immunisation Program childhood schedule changes

$49,488

Mediabrands Australia Pty Ltd

Media buy Childhood Immunisation Education Phase 3

$2,190,743

Mediabrands Australia Pty Ltd

Media buy Aboriginal and Torres Strait Islander Childhood Immunisation Campaign

$48,738

Mediabrands Australia Pty Ltd

Media buy Head to Health Campaign

$418,567

Mediabrands Australia Pty Ltd

Media buy for Health Star Rating Phase 5

$3,258,295

Mediabrands Australia Pty Ltd

Media buy Maternal Vaccination Campaign

$207,515

Mediabrands Australia Pty Ltd

Pharmaceuticals Benefits Scheme

$3,650,707

Mediabrands Australia Pty Ltd

Media buy Private Health Insurance Campaign

$1,898,202

Mediabrands Australia Pty Ltd

Media buy for the HPV Campaign

$289,970

Mediabrands Australia Pty Ltd

Media buy seasonal influenza 2019

$49,498

Mediabrands Australia Pty Ltd

Media buy Meningococcal adolescents

$48,151

Mediabrands Australia Pty Ltd

Media buy Fruit and Vegetable Communication

$208,948

Mediabrands Australia Pty Ltd

Media buy Australian General Practice Training

$29,494

Mediabrands Australia Pty Ltd

Media buy Life Checks

$238,028

Mediabrands Australia Pty Ltd

Adverse Events – Therapeutic Goods Administration

$198,271

Mediabrands Australia Pty Ltd

Newspaper advertisement for nominations to Gene Technology Committees

$22,022

Property management and environmental impact

Ecologically sustainable development principles

The principles of ecologically sustainable development (ESD) outlined in section 3A of the Environment Protection and Biodiversity Conservation Act 1999 are that:

  • decision-making processes should effectively integrate both long term and short term economic, environmental, social and equity considerations;
  • if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation;
  • the present generation should ensure that the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations;
  • the conservation of biological diversity and ecological integrity should be a fundamental consideration in decision-making; and
  • improved valuation, pricing and incentive mechanisms should be promoted.
Our contribution

In 2018-19, the Department continued its commitment to ESD through a methodical approach to planning, implementing and monitoring the Department’s environmental performance through programs and policies that are in accordance with current legislation, whole-of-government requirements and environmental best practice. The Department also administers legislation as outlined below that is relevant to, and meets the principles of, ESD.

Gene Technology Act 2000

Through the Gene Technology Regulator (the Regulator), the Department protects the health and safety of people and the environment by identifying risks posed by gene technology and manages those risks through regulating activities with genetically modified organisms (GMOs). These activities range from contained work in certified laboratories to release of GMOs into the environment. The Regulator imposes licence conditions to protect the environment, and uses extensive powers to monitor and enforce those conditions.

Industrial Chemicals (Notification and Assessment) Act 1989

The National Industrial Chemicals Notification and Assessment Scheme (NICNAS) aids in the protection of the Australian people and the environment by assessing the risks from the introduction and use of industrial chemicals and promoting their safe use. NICNAS operates within an agreed framework for chemical management that is consistent with the National Strategy for ESD and is aligned with the United Nations Conference on Environment and Development Agenda 21 (Rio Declaration) chapter on the environmentally sound management of toxic chemicals.

Environmental impact of our operations

The Energy Efficient in Government Operations (EEGO) Policy contains minimum energy performance standards for Australian Government office buildings as a strategy for achieving energy targets. This ensures that entities progressively improve their performance through the procurement and ongoing management of energy efficient office buildings and environmentally sound equipment and appliances.

The Department, as part of its strategic accommodation planning, undertakes to meet the requirements of the Green Lease Schedule. That is, for tenancies of greater than 2,000m2 with a lease term greater than two years, accommodation will meet the ‘A’ grade standard of the Building Owners and Managers Association International guidelines and meet a minimum National Australian Built Environment Rating System rating of 4.5 stars.

Energy consumption

Figure 3.5.1: The Department’s electricity and natural gas consumption​​

Figure 3.5.1 is a bar graph showing the Department’s electricity and gas consumption in gigajoules for 2016-17 to 2018-19. The graph is broken down into the categories of electricity (office), electricity (non-office) and natural gas (non-office) usage.

The Department is required to meet the target of no more than 7,500 megajoules (MJ) per person, per annum, for office tenant light and power under the EEGO Policy. In 2018-19, the Department met this target, using 3,667 per person, per annum. This represents a reduction of 390MJ per person from the previous reporting period. This reduction is, in part, attributable to improvements in the Department’s occupational density.

This achievement reflects the Department’s efforts in its leased property portfolio to reduce energy consumption through technology such as:

  • T5 fluorescent and movement activated sensor lighting;
  • double glazed windows;
  • energy efficient heating;
  • ventilation; and
  • air-conditioning systems.

There is no target for energy consumption for non-office space, which includes sites used for laboratories, workshop and storage facilities. This includes the Symonston facility, housing the HPRG, which also accounts for the Department’s use of natural gas.

While there is no energy target for non-office space, the Department monitors the energy consumption in these facilities as part of its commitment to reducing the impact on the environment from its activities.

The Department also encourages staff participation in Earth Hour 2019 by switching off non-essential building lights, terminals, monitors and office equipment at all of its properties around Australia.

Waste management

Figure 3.5.2: Average monthly waste produced by the Department2

​​

Figure 3.5.2 is a bar graph showing the Department’s average monthly waste produced in tonnes for 2015-16 to 2018-19, as well as the percentage of total waste recycled. The graph is broken down into the categories of general waste, commingled recycling, paper and cardboard recycling and organic recycling.

The Department is committed to protecting the environment through the implementation of efficient and effective waste management programs.

In the majority of the Department’s offices, waste management initiatives include segregated waste streams to improve management of general waste, commingled recycling, organic recycling, and paper and cardboard recycling. The Department aims to increase the amount of waste recycled as a proportion of total waste.

The increase in general waste shown in the graph above reflects changes to the reporting methods of the Department’s waste management service provider. Waste from commercial premises co-located with two of the Department’s office buildings is now included because the service provider reports at the site level, not by individual customer.

The increasing uptake of digital record keeping by the Department has reduced office paper consumption, which in turn has led to a reduction in paper recycling.

Additional materials recycling efforts include the recycling of printer and toner cartridges, batteries and mobile phones to ensure these items are diverted from landfill and used in sustainable programs.

The Department’s largest office building, the Sirius Building in Woden ACT, also uses recycled grey water for flushing toilet cisterns, which along with the use of waterless urinals in the building significantly reduces reliance on mains water in the operation of the building.

Vehicle fleet management

Figure 3.5.3: Fleet fuel consumption and CO2 emissions

Figure 3.5.3 is a bar graph showing the Department’s fuel consumption and CO2 emissions for 2015-16 to 2018-19. The graph is broken down into the categories of diesel oil and petroleum.

​​In 2018-19, the Department operated 38 vehicles, which travelled a total of 727,711 km and expended 472,381MJ. This resulted in an energy consumption of approximately 1.54MJ/km.

Footnotes

  1. Available at: www.treasury.gov.au
  2. 2017-18 organic recycling data is not available.\