Audit and Risk Committee

The CEO of the NHFB has established the Independent Audit and Risk Committee (ARC) in compliance with section 45 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and section 17 of the PGPA Rule - Audit Committee for Commonwealth entities.

The role of the ARC is to provide independent advice and assurance to the CEO on the agency’s performance and financial reporting, risk oversight and management, and system of internal control (including the CEO NHFB and the Administrator on the operation, management and financial reporting of the Pool). The ARC is not responsible for the executive management of these functions.

Key areas of focus for the ARC in the past year included:

• Financial Reporting (Pool Financial Statements and departmental expenditure);
• Performance Reporting (organisation and financial);
• System of Risk Oversight and Management (Policies and Instructions); and
• System of Internal Control (internal and external audits and assurance activities).

The ARC comprises of up to four independent Members, including the Chair, and all appointments are made by the CEO. Members, taken collectively, will have a broad range of skills and experience relevant to the operations of the NHFB, including the functions of the Administrator. At least one member is to have accounting or related financial management experience, with an understanding of accounting and auditing standards in a public sector environment.

ARC members as 30 June 2019 were: Carol Holley (Chair, since March 2013), Ken Barker, Jeremy Chandler and Chris Brook.

The Audit and Risk Committee met six times in 2018–19:

• August 2018
• Twice in September 2018
• November 2018
• March 2019
• June 2019

Audit Committee Members

Carol Holley

Ms Holley is a Non-Executive Director of the Australian Nuclear Science and Technology Organisation, and a member of its Audit and Risk Committee. She is also the Independent Chair of numerous committees in NSW and a member of the Risk and Audit Committee of the NSW Mental Health Commission.

Ms Holley is a Chartered Accountant, and a Fellow of the Australian Institute of Company Directors.

Ken Barker

Mr Barker has more than 40 years experience in public sector management and finance, previously working for NSW Police, the former Public Works, Corrective Services, and NSW Health.

Mr Barker has a number of board and committee appointments. Mr Barker is a Fellow of the Institute of Public Accountants, and a graduate member of the Australian Institute of Company Directors.

Jeremy Chandler

Mr Chandler is the Director of Business WIDE Consulting Support Pty Ltd. He is also a Senior Adviser to Nous Group and an Associate with Executive Intelligence Group.

Mr Chandler is an Independent Audit Committee Member for the ACT Health Directorate–Canberra Health Services, the Australian National University and the Australian Communications and Media Authority.

Chris Brook

Professor Chris Brook currently sits as Chair of the Clinical Trials Project Reference Group (COAG/Commonwealth Department of Health); as Chair of the Australian Commission on Safety and Quality in Health Care Clinical Trials Governance Framework Steering Committee; and as a member of the Advisory Board of the National Blood Authority.

Audit and assurance reviews

In 2018–19, audit and assurance functions were provided by a combination of internal and external resources to provide assurance to the CEO and ARC that the NHFB’s risk management, governance and internal control processes are operating effectively.

Key 2018–19 audit and assurance activities covered:

• Commonwealth Contribution Model (CCM);
• Half year and annual reconciliations;
• Administrator’s Payments System;
• Risk Management Framework;
• Business Continuity; and
• Stakeholder Engagement.

Outcomes of all audit and assurance activities were reported through the RAGC, to the CEO and ARC.

In 2018–19 we will further streamline our audit and assurance plan, ensuring coverage of:

• Calculations (CCM and reconciliations);
• Payments (control framework, data migration and new Payments System);
• Reporting (privacy and website);
• Stakeholders (communication and engagement); and
• Organisation (Business continuity, security and fraud).

Australian National Audit Office

During 2018–19 the Australian National Audit Office conducted a Performance Audit titled ‘Australian Government funding of public hospital services – risk management, data monitoring and reporting arrangements.

The audit report contained three recommendations directed to the Commonwealth Department of Health and a number of enhancement suggestions for the NHFB and the IHPA. The NHFB has actioned suggested enhancements:

• Measuring and reporting on Risk Management Performance —The NHFB developed a Risk Performance Report which is presented to the Independent Audit and Risk Committee quarterly.
• MoU between the Independent Hospital Pricing Authority and the NHFB — A MoU has been developed between the two organisations.
• Review of risk management documentation including the NHFB Risk Register — The NHFB’s Risk Register has been reviewed along with the Risk Management Policy and Framework and Risk Management Instructions.
• Reporting of Public Hospital Funding — The NHFB meets regularly with all stakeholders to discuss reporting of public hospital funding.

External scrutiny

During 2018–19, there were no:

• Judicial, tribunal or Australian Information Commissioner reviews;
• Auditor-General, Parliamentary Committee, or Commonwealth Ombudsman inquiries; or
• External capability reviews.

Freedom of Information

The Freedom of Information Act 1982 (the FOI Act) gives members of the public a right to access copies of documents, other than exempt documents, that we hold however the NHFB can refuse access to some or part of those documents that have an exemption under the FOI Act.

We publish FOI information on our website at www.publichospitalfunding.gov.au/freedom-information

In 2018–19, one FOI request and one Internal Review Request was received by the NHFB.

Fraud control

Following an external review of our fraud control arrangements, we updated our Fraud Control Plan in February 2019 and presented it to our ARC in March 2019. Following these activities, an all staff fraud awareness training session was conducted.

Consistent with Section 10 of the PGPA Act and the Commonwealth Fraud Control Policy, the NHFB’s Fraud Control Plan puts in place a comprehensive program that covers prevention, detection, investigation and reporting.

In 2018–19 the NHFB did not detect any instances of fraud.

Certification of fraud control arrangements

I, Shannon White, certify that I am satisfied that for 2018–19, the NHFB has:

Prepared a fraud control plan and associated fraud risk assessments;

Appropriate fraud prevention, detection, investigation and reporting mechanisms that meet NHFBs needs; and

Taken all reasonable measures to appropriately deal with fraud relating to the NHFB.

Shannon White
Chief Executive Officer

1 October 2019