The Treasury’s corporate governance practices uphold sound administrative and financial management and compliance with statutory and other external requirements. They are designed to ensure efficient, effective and ethical use of the Treasury’s resources.
As part of its ongoing focus on effective governance, the Treasury periodically reviews its:
- accountability mechanisms;
- leadership, culture and communications;
- governance and committee structures;
- engagement with stakeholders to assess effectiveness;
- risk management framework, compliance and assurance systems; and
- strategic planning, performance monitoring and evaluation.
Strategic and organisational reviews
Capability Review and Capability Action Plan
In mid-2013, the Australian Public Service Commission sponsored a Capability Review of the Treasury, led by Dr Michael Vertigan. Such reviews adopt a high-level perspective of capability across all operations of the agency, capturing the organisation’s potential to achieve outcomes, the effectiveness with which outcomes are achieved and the quality of outputs and results. The Review taskforce interviewed a large number of people within Treasury and across a number of our key stakeholder groups.
The Capability Review identified four broad areas providing opportunities for improvement. These were: finding better ways to manage and monitor Treasury’s priorities and performance; thinking differently about prioritising our resources in order to work smarter, not harder; improving our collaboration and engagement with others; and getting better at leading and managing change while adapting and innovating our way of working.
In order to address these challenges the Treasury has implemented a Capability Action Plan. This consists of four work streams which correspond to the four focus areas for improvement. In 2014 to date, the delivery of key outcomes included the following: development of a new Resource and Prioritisation Model (RPM) approach; launching both an Innovation Framework and a Stakeholder Engagement Framework; and establishing the Australian Treasury Advisory Council (ATAC) to provide governance advice similar to that provided by a private sector governance board.
Senior management committees and their role
The Executive Board is the Treasury’s primary decision-making body. The Treasury’s Executive Board comprises the Secretary, the Executive Directors and the General Manager of Corporate Strategy and Services Group. The Executive Board is responsible for high-level policy issues relating to the Treasury’s strategic leadership and management, including:
- organisational development — shaping the Treasury’s future;
- policy development and coordination — involving major and/or new economic policy issues, generally with implications that involve more than one group;
- corporate governance — ensuring the efficient, effective and ethical use of resources; and
- planning and allocation of resources — meeting current and future work priorities.
The Executive Board members as at 30 June 2014 were:
- Dr Martin Parkinson, Secretary;
- Dr David Gruen, Executive Director, Macroeconomic Group — Domestic;
- Mr Barry Sterland, Executive Director, Macroeconomic Group — International;
- Ms Jan Harris, Executive Director, Markets Group;
- Mr Nigel Ray, Executive Director, Fiscal Group;
- Mr Rob Heferen, Executive Director, Revenue Group;
- Ms Amanda Cattermole, Acting Executive Director, Policy Coordination and Governance; and
- Mr Peter Alexander, Acting General Manager, Corporate Strategy and Services Group.
The Executive Board is supported by the Corporate Strategy and Services Group.
Australian Treasury Advisory Council
In March 2014, the Australian Treasury Advisory Council was formed to drive further organisational change. This group of respected leaders comprises a governance and advisory board for the Secretary of the Treasury to help replicate the discipline provided by a private sector governance board. The inaugural members of the Council are:
- Ms Elizabeth Bryan — Chair of Caltex;
- Ms Tracey Horton — former Dean of University of Western Australia Business School and currently Non-Executive Director, Skilled Group and President of the WA Chamber of Commerce and Industry;
- Ms Belinda Hutchinson — Chancellor of Sydney University;
- Ms Akiko Jackson — management consultant in the financial services industry;
- Mr Gabriel Makhlouf — New Zealand Treasury Secretary;
- Mr Kevin McCann — Chair of Macquarie Group; and
- Dr Michael Vertigan — who has had a long and illustrious career in the public sector and academia.
The Audit Committee assists the Executive Board by independently reviewing and considering the department’s operations, its risk management framework and the integrity of its financial accounts. The audit committee reviews audit issues by:
- supporting and enhancing the control framework;
- providing assurance on published financial information;
- monitoring, reviewing and reporting on compliance; and
- assisting the Secretary to comply with all legislative and other obligations.
The Treasury’s Audit Committee follows the recommended best practice guidelines issued by the Australian National Audit Office (ANAO) and reviews internal and external audits relating to the Treasury. The ANAO also attends the Treasury’s Audit Committee meetings as an observer, as do the Treasury’s internal auditors. The audit committee comprises an independent external Chair, an external member and four internal members.
The Treasury pursues a comprehensive, coordinated and systematic approach to risk management.
- The Treasury’s risk management framework aims to:
- establish robust, pragmatic risk management practices that support business needs and provide the methodology and tools to enable effective management of risk across the Treasury;
- develop a consistent Treasury-wide understanding of risk management;
- foster an environment where all staff assume responsibility for managing risk with managers formally considering risks as part of the decision making process;
- ensure that significant risks facing the Treasury have been identified, understood, documented and are being actively managed;
- ensure that risks are assessed in a balanced way, with upside risks (opportunities) considered alongside downside risks; and
- make sure that risk registers remain useful and practical tools for analysing risk.
- The Treasury’s risk management framework is reviewed annually. The key changes made in the 2013-14 review were strengthening linkages between the consideration of risk and key departmental objectives. This was in order to inform decisions about proactively realigning the Treasury workforce, work practices, policies and culture to best manage risks related to key priorities.
- The Fraud Control Plan complies with Australian Government Fraud Control Guidelines.
- The Chief Executive Instructions put into effect the Financial Management and Accountability Act 1997 requirements, setting out responsibilities and procedures which provide an overarching framework for transparent and accountable financial management. They also contain topics relating specifically to risk management and internal accountability.
- The Internal Audit Plan identifies services and functions for auditing and is approved by the Audit Committee and the Executive Board.
- Risk management and insurable risks are aligned through Comcover and Comcare.
The Treasury uses a range of strategies to identify and manage risks
associated with the delivery of Information Technology services. New IT-enabled business solutions are assessed against key IT principles to manage IT investments strategically. The framework for delivering IT services includes:
- an IT Disaster Recovery Plan which sets out the strategies and processes to restore services if the Treasury’s central computing infrastructure is partially or completely lost;
- a Business Continuity Plan for the Treasury’s business, which provides a process for identifying priority IT systems to restore, along with alternative methods and processes so the Treasury can continue to function while the environment is restored;
- an IT Security Policy which addresses the requirements to protect information holdings and secure operation of the Treasury’s IT resources;
- an Internet and Email Acceptable Use Policy which sets out responsibilities for appropriate use of the internet, email facilities and services;
- a Social Media Policy that helps enable external and internal engagement while ensuring protocols are in place for appropriate use of social media, and to protect Treasury’s reputation;
- IT Change Control Guidelines (an internal management tool) which assists with quality assurance control over proposed changes to the technical environment and facilities; and
- Project Standards, internal standards based on the structured project management methodology, PRINCE2, which ensure correct project governance is applied to IT-enabled business projects.
Training programmes and staff notices raise staff awareness of risk management policies and procedures. All policies and procedures are available to staff on the intranet.
Fraud prevention and control
The Treasury Fraud Control Plan accords with the Commonwealth Fraud Control Guidelines and the Australian National Audit Office’s Better Practice Guide on Fraud Control in Australian Government Entities.
The Treasury Fraud Risk Assessment forms the basis of the Fraud Control Plan, which has been developed with appropriate controls, prevention, detection and investigation, and reporting standards.
The Treasury has undertaken all reasonable measures to minimise the incidence of fraud and to investigate and recover the proceeds of fraud against the department. The Treasury reports fraud information data annually to the Australian Institute of Criminology.