The Public Governance, Performance and Accountability Act 2013 (PGPA Act) obliges all Commonwealth officials to apply sound governance practices and procedures in their day-to-day work.
Governance is the set of responsibilities and practices, policies and procedures exercised by the Trustees to provide strategic direction and ensure that objectives are achieved, risks are managed and resources are used responsibly and with accountability. The key governance documents include:
a. RANRTF Corporate Plan. The Corporate Plan sets out the Fund’s purpose, as required by the PGPA Act, and describes the activities to be undertaken and intended results to be delivered. The plan has a four-year outlook, is updated at least annually and is published in the public domain.
b. RANRTF Annual Report, including Annual Performance Statements. The Fund’s annual report is a principal formal accountability mechanism between the Fund and the Minister, and is a requirement of the PGPA Act. The annual report provides an important historical record of what the Fund did during the period.
c. Accountable Authority Instructions (AAIs). The AAIs enable the Trustees, as the accountable authority to meet their general duties by setting out appropriate controls and directions for officials, especially in relation to the proper use and management of the public resources for which they are responsible (section 15 of the PGPA Act), and maintaining appropriate system of internal control including measures for ensuring that officials comply with the finance law (section 16 of the PGPA Act).
d. Risk Management Plan (RMP). The Fund adopts Commonwealth and Defence best practice for risk management and fraud control to meet obligations to members, the RAN and the Australian Government. The RMP outlines the Trustees’ approach and oversight of risk management of the Fund in alignment with the RANRTF Corporate Plan and provides:
i. transparency of risk management within the Fund,
ii. a structure to draw out accountabilities and responsibilities of risk within the Fund, and
iii. a collective framework that articulates accountabilities and responsibilities for risk shared with other entities.
Day-to-Day Operations of the Fund
The Principal Office staff manage the day-to-day operations of the Fund. In the first instance, applications for loans are checked by the Ship or Establishment representative of the Fund and forwarded to the Principal Office. The Principal Office staff then validate the application in accordance with the Business Rules, and return for correction if not in accordance with the requirements. Special Loans require additional supporting documentation and are processed by the Principal Office then referred to the Board of Trustees for consideration.
On an as required basis a sample audit is conducted to validate that the loans are being used for the intended purpose. Ad hoc audit activities are undertaken based on an assessment of the likelihood of misuse and the monitoring of loan applications by the Principal Office and the Trustees.
The Trustees and Principal Office staff conduct briefings to courses for Ship and Establishment representatives, Commanding Officers and Executive Officers to ensure that they are aware of their responsibilities in administering the activities of the Fund. In addition, the Trustees are available to answer queries and provide advice to Commanding Officers when dealing with unusual situations which may be assisted by the provision of a loan or grant.
During the reporting period, the Audit Committee continued its audit function as required by the PGPA Act. Under the Audit Committee Charter, the RANRTF Audit Committee comprises three (3) members (one Trustee and two independent members) appointed by the Board and meets not less than four times per annum. The Audit Committee’s main responsibilities include:
a. Providing confidence in the credibility and reliability of financial statements and other financial information released to other interested and relevant parties; and
b. Oversight of internal controls and risk assessment management to ensure the net assets of the Fund are protected, and the efficient and effective delivery of services to RAN personnel are maintained.
From 1 July 2019 it is intended to increase the membership of the Audit Committee to one Trustee and three independent members.