Go to top of page

Part 3.1: Corporate Governance

The Department’s senior governance committees are integral to ensuring the Government’s priorities and intended outcomes are delivered in an efficient and effective way. In early 2019, the Department reviewed its governance arrangements. The Investment and Implementation Board was established and the Program Assurance Committee was reset to ensure both were fit for purpose and structured appropriately to achieve their mandate. The Audit and Risk Committee, supported by the Policy and Evidence Committee and the Security and Workforce Integrity Assurance Committee, worked collaboratively to provide advice and assurance to the Secretary and Executive Board on organisational performance, delivery of administered programs and strategic portfolio issues.

In response to the COVID-19 pandemic, the Department introduced temporary and robust governance and assurance arrangements, adapting to the significant change of pace and the shift to remote working. The Department’s existing senior governance committees reduced meeting frequency, addressing business through submission and review of papers.

The Department established an interim COVID-19 Working Group, co-chaired by two Deputy Secretaries, to ensure that efforts were directed to areas of highest priority. The COVID-19 Working Group oversaw formation and delivery of COVID-19 pandemic measures, including implementation and support across the Department, governance arrangements, key risks and issues, reporting and financials. The Department also introduced live assurance activities, assessing areas of risk based on the Australian National Audit Office’s best practice guidance on supporting rapid implementation of measures.

These time-limited initiatives were integral to the Department’s successful delivery of the COVID-19 pandemic health response package. They provided agile arrangements, responsive to the rapidly changing environment, which ensured risks were managed and the Department was focused on delivering priorities efficiently and effectively. The Department has leveraged the experience to make further improvements to business as usual governance arrangements, which recommenced in June 2020 following formal cessation of the COVID-19 Working Group.

In May 2020, the Chief Operating Officer’s Assurance Working Group presented the Department’s COVID-19 governance and assurance approach to the Chief Operating Officers Committee, and was subsequently presented to the Australian Taxation Office by its Executive as an example of best practice.

Senior governance committees

The senior governance committees provide advice and make recommendations to the Executive on:

  • organisational performance;
  • delivery of Administered Programs;
  • implementation of the Department’s highest risk change projects; and
  • strategic portfolio policy issues to improve performance of the health and aged care systems.

Figure 3.1.1: Senior governance committee structure

This figure is a hierarchy structure chart showing the Governance Committee structure within the Department. The Secretary overseas all committees, with the Executive Board and the Audit and Risk committee reporting directly to the Secretary. The Executive Board directly overseas the Program Assurance Committee, Investment and Implementation Board, Policy and Evidence Committee and the Security and Workforce Integrity Assurance Committee.

Table 3.1.1: Senior governance committees

Committee

Role

Executive Board

The Executive Board drives the leadership, culture and performance of the Department, and provides stewardship through:

  • effective decision-making and governance;
  • setting the strategic direction and ensuring achievement of high quality outcomes;
  • shaping organisational culture and developing capability; and
  • monitoring and addressing Departmental performance and risks.

Membership comprises the Secretary and all Deputy Secretaries.

Audit and Risk Committee

The Audit and Risk Committee provides independent advice and assurance to the Secretary on the appropriateness of the Department’s:

  • financial reporting;
  • performance reporting;
  • system of risk oversight and management; and
  • system of internal control.

The composition of the Committee changed over the 2019-20 financial year. At 30 June 2020, the Committee comprised an independent chair, an independent member, and a senior executive member chosen from within the Department.

Program Assurance Committee (PAC)

The PAC drives excellence in program delivery across all Departmental programs, which are mapped in the approved Outcome and Program structure reflected in the Portfolio Budget Statements. It considers both the ongoing delivery of programs and the implementation of new programs and measures.

PAC is an advisory body reporting to the Executive Board, and provides:

  • A strategic view – looking across the whole department, the portfolio and beyond – of the management arrangements, accountability measures and performance results for all programs, including the alignment of resources, capabilities and senior focus relative to risk, Government priorities and achievement of intended outcomes.
  • Guidance to assist business areas to continuously improve program design and delivery, without disturbing responsibilities and accountabilities, which rest with relevant senior responsible officers.
  • Assurance to the Secretary and Executive Board on the effectiveness of program management. This is undertaken through a risk-based approach to ensure the sub-programs with the highest risks considered by assessment provide an update to PAC.

Membership comprises senior executives selected for their expertise and/or current role in the Department.

The Committee moved to an interim governance model during March–May 2020 to account for impacts on the Department’s operations of responding to the COVID-19 pandemic.

Investment and Implementation Board

The Investment and Implementation Board provides oversight, advice and assurance to the Executive Board on:

  • effective management and ongoing viability of the Department’s high-risk change projects;
  • assessment of performance impacts and delivery related to the Department’s COVID-19 pandemic response;
  • strengthening and maturing project capability and independent project assurance; and
  • investments relating to the use of Departmental capital and non-capital budgets.

Membership comprises senior executives selected for their expertise and/or current role in the Department.

This committee moved to an interim governance model during March–May 2020 to account for impacts on the Department’s operations of responding to the COVID-19 pandemic.

Policy and Evidence Committee

The Policy and Evidence Committee provides advice to the Department’s Executive Board on strategic portfolio policy issues, including consideration of policy issues contributing to improved performance of the health and aged care systems, and emerging priorities. Areas discussed include care models to meet the needs of the elderly and frail, and the impact of population changes on the health system. This Committee also champions the Department’s data, evidence and evaluation functions to contribute to evidence-based policy development and implementation.

Membership comprises senior executives selected for their expertise and/or current role in the Department.

Security and Workforce Integrity Assurance Committee

The Security and Workforce Integrity Assurance Committee supports the Secretary and Executive in the provision of a cohesive and coordinated approach to security and workforce integrity risk. The Committee supports the Executive to:

  • set priorities to deliver the Government’s Protective Security and Policy Framework Reforms;
  • monitor the effectiveness of controls (policy and process) associated with the Department’s Professional Integrity and Security Framework; and
  • provide assurance against security and integrity initiatives for the Department’s corporate operating environment.

Membership comprises Senior Executives and Executive Level officers managing key functions relevant to security and workforce integrity.

Audit and Risk Committee Membership

The composition of the Audit and Risk Committee changed in 2019-20. At 30 June 2020, the Committee comprised an independent chair, an independent member, and a senior executive member chosen from within the Department. The Committee met five times in 2019-20.

The Audit and Risk Committee Charter is available at: www.health.gov.au/audit-risk-committee-charter

The Financial Statements Sub-Committee is chaired by the independent member, Nick Baker.

During 2019-20, the Audit and Risk Committee comprised the following membership:

Jenny Morison – Independent External Chair

Jenny Morison is a Fellow of the Chartered Accountants of Australia and New Zealand, with over 37 years of broad experience in accounting and commerce, including audit, taxation, management consulting, corporate advisory and consulting to government. Jenny has held numerous board positions, and has extensive experience as an independent member and chair of audit committees in the Australian Government. Her experience encompasses both large departments and smaller entities.

Since 1996, Jenny has run her own business, providing strategic financial management, governance and risk advice within the government sector. Jenny has a Bachelor of Economics and is a Fellow of the Institute of Managers and Leaders.

Jenny attended all Committee meetings during 2019-20.

Remuneration: $70,000 (ex GST) per annum.

Dr Lisa Studdert – Deputy Chair

During 2019-20, Dr Lisa Studdert was the Deputy Secretary for the Population Health, Sport, Cancer and Health Workforce Group.

Lisa joined the Department in June 2013 as a First Assistant Secretary in the Therapeutic Goods Administration, and went on to lead the Population Health and Sport Division. Lisa worked in the office of Minister Greg Hunt, and before that, as Chief of Staff to former Health Minister, Sussan Ley.

In 2011, Lisa was a member of the senior leadership team at the Australian National Preventive Health Agency, and has a background working in population and preventive health policy and programs in Australia and internationally.

Lisa is a PhD graduate of Cornell University.

Lisa attended all Committee meetings during 2019-20.

Remuneration: Nil. Lisa was a member of the Department’s Senior Executive Service (SES) during 2019-20.

Steve Peddle – Independent Committee Member (August 2015 – August 2019)

Steve Peddle commenced as an independent Committee member in August 2015. Steve has more than 20 years of senior management experience as a Chief Information Officer, Chief Technology Officer and General Manager, covering information and communication technology service delivery and senior general management.

Steve has experience in private, government and defence industries in the areas of computer design and engineering, applications development, strategic planning, outsourcing contract management, housing management services, digital broadcast video services, network security, and operations service delivery. Steve is the Chief Information Officer for the Australian Maritime Safety Authority.

Steve attended the August 2019 Committee meeting.

Remuneration: Nil. Steve is employed by a Commonwealth Statutory Authority.

Nick Baker – Independent Committee Member

Nick Baker is a Fellow of Certified Practicing Accountant Australia, a member of the Australian Computer Society, and was a senior Partner at KPMG Australia (1995–2015) prior to his retirement.

Nick’s career has spanned 40 years and encompassed a broad range of areas, including public sector accounting, financial management, information technology and general management consulting. Nick has particular expertise in public sector financial management reform, policy/program design, information technology, security and control.

Nick has held a number of Board Chair positions in not-for-profit organisations and has audit committee experience in the public sector with entities such as the Australian Competition and Consumer Commission, Department of Human Services (now Services Australia), Department of Social Services (Chair) and the National Disability Insurance Scheme Quality and Safeguards Commission (Chair).

Nick holds dual tertiary level qualifications in Professional Accounting and Computing, and a Certificate IV in Commonwealth Fraud Control (Investigations).

Nick attended all committee meetings during 2019-20.

Remuneration: $34,500 (ex GST) per annum.

David Hallinan – Committee Member (January 2018 – March 2020)

David worked in the Department for over 10 years in Primary Care, Medicare Benefits, Population Health, and Portfolio Review functions. In 2011, David moved to the Department of Finance, working in policy advisory roles across a wide range of portfolios before returning to the Department in 2016 to take on the role of First Assistant Secretary, Health Workforce Division. In 2019, he commenced as acting Deputy Secretary, Ageing and Aged Care Group.

David attended the August 2019 and December 2019 committee meetings.

Remuneration: Nil. David was a member of the Department’s SES during 2019-20.

Organisational planning

The Department’s corporate governance agenda is guided by the Corporate Plan. In 2019-20, the Department continued to strengthen oversight of program performance through implementing changes to align with the enhanced Commonwealth Performance Framework. Planning and risk processes are undertaken on an annual basis and are closely aligned to ensure each area’s priorities are delivered consistently with our vision and objectives.

Our purpose

With our partners, support the Government to lead and shape Australia’s health and aged care system and sporting outcomes through evidence-based policy, well-targeted programs, and best practice regulation.

Corporate Plan

The Corporate Plan is the primary strategic planning document for the Department and is a core element of the Department’s performance and accountability framework.

It sets out the Department’s priorities and key activities for the next four years, including examples of how our performance will be measured in delivering a modern, sustainable health system for all Australians. The Corporate Plan also includes discussion on the Department’s operating environment, capability improvement agenda, approach to managing risk, and information on our partners and their cooperation in helping us achieve our purpose and Outcomes.

The Corporate Plan has been prepared to meet requirements of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule).

Risk management

The Department’s Risk Management Framework supports the Secretary to meet the duties under section 16 of the PGPA Act, and complies with the Commonwealth Risk Management Policy. The Department continued to strengthen and encourage a positive risk culture during 2019-20.

The Risk Management Framework includes an assessment methodology, assessment criteria, grading scheme and a matrix to report risk maturity at the Divisional level. This assessment is conducted annually as part of the Department’s business planning processes.

In 2019, the Department maintained its ‘Integrated’ level of maturity against the annual Comcover Risk Management Benchmarking Survey. The survey is undertaken biannually, and is next due in 2021.

Fraud minimisation and control

The Department has zero tolerance for fraud and is committed to preventing fraud against the Department, its programs and operations.

The Department’s Fraud Control Framework (the Framework) aligns with the Commonwealth Fraud Control Framework. It includes a fraud control plan informed by assessments of fraud risk, and complies with section 10 of the PGPA Rule (fraud systems).

The Framework meets business needs and establishes mechanisms for the prevention, detection, monitoring, evaluation and reporting of fraud matters for the Department.

Criminal investigations were conducted in accordance with the Australian Government Investigation Standards.

In 2019-20, all matters from Provider Benefits Integrity heard in the courts for finalisation were successful prosecutions. In total, five Provider Benefits Integrity matters were finalised before the courts, where serious non-compliance by health professionals was found against Commonwealth health programs. These matters were all in relation to the Medicare Benefits Scheme. Sentences ranged from good behaviour bonds through to terms of imprisonment of up to four years. Three cases involved practice managers, one case a psychologist, and one case a medical practitioner.

One further matter of dishonestly causing a loss, involving a Departmental contractor, was finalised during the period. This also resulted in a conviction.

Assurance and audit activities

The Department undertook audit and assurance activities to promote and support effective corporate governance.

Internal audits completed during 2019-20 supported compliance, and provided assurance in relation to the Department’s key delivery objectives and the effectiveness of its control frameworks.

During 2019-20, the Department completed four audits from the 2018-19 Internal Audit Work Program, and 12 audits from the 2019-20 Internal Audit Work Program. One audit from the 2019-20 program was nearing completion as at 30 June 2020 and will be finalised in 2020-21. In response to the COVID-19 pandemic, a comprehensive program of real time assurance advice and guidance was provided across the Department. While still maintaining business as usual audit activity, significant additional efforts were directed toward a series of risk snapshots and deep dives covering key streams of the Department’s COVID-19 pandemic response. This live assurance program assessed risks based on Australian National Audit Office (ANAO) best practice guidance to support rapidly implemented measures. Checklists and self-assessments were applied to identify control gaps and mitigate potential risks. This work was supported through further analysis by the Department’s internal audit providers to ensure corrective actions were applied during implementation, in line with effective and efficient delivery.

Compliance reporting

The Department recorded no significant breaches of finance law during 2019-20.

The Department maintains a risk-based approach to compliance, with a combination of self-reporting and focused review. The Audit and Risk Committee review and endorse application of, and adjustments to, this methodology, with instances of non-compliance reported to the Committee. The Department minimises non-compliance through training and publication of legislation and rules, delegation schedules and Accountable Authority Instructions, which are available to staff to inform decision-making.

Certification of departmental fraud control arrangements

I, Dr Brendan Murphy, certify that the Department has:

  • prepared fraud risk assessments and fraud control plans;
  • in place appropriate fraud prevention, detection, investigation, and reporting mechanisms that meet the specific needs of the Department; and
  • taken all reasonable measures to appropriately deal with fraud relating to the Department.

Dr Brendan Murphy

November 2020